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Chapter Nine
The End of the Revolution, 1989–94

The Organizational Phase Change and After

The departure of Craig and Judith marked the beginning of the end of Novell’s revolutionary period. After they left Novell would make money, but not history. But that was not clear at the time, and Ray was not about to give up “shaking the world” just because Craig and Judith were gone.

The Layoffs of Summer ’89

One of the amazing things about this free market system we live with in America is that people do make a difference. Novell without Craig and Judith continued to grow, but in a different way than it would have with them. The Novell of Ray, Craig, and Judith had concentrated on defining what a LAN was and educating customers as to its benefits. The Novell that followed concentrated on embellishing what a NetWare LAN was and on making money by concentrating on Ray’s three S’s: service, software, support.

But before that transition could happen, the remaining influences of “Craig-and-Judithism” had to be exorcised. This was the company goal for 1989.

The crisis surrounding their exit had been distracting and had depressed earnings growth. This gave Ray the excuse he needed to assume the role of “company doctor” and announce layoffs in June and July of 89. Those layoffs, plus the departure of the Publications Group, left Ray firmly in control and with a new generation of senior managers who were ready to pursue Novell’s new goals.

Taking on Microsoft

As the late ’80s turned into the early ’90s, Ray acted as if he’d decided that the minicomputer companies were beat—Novell had done its job against them and a new battlefield was needed.

Novell was not the only PC-oriented company that was rising over the collapse of the minis. Microsoft was another. Not only was Microsoft prospering mightily, Bill Gates had personally vexed Ray on at least half a dozen occasions while Novell and Microsoft were both carving out identities and market share in the ’80s.

Microsoft became Ray’s next target, and he chose to take it head on. He was going to out-Microsoft Microsoft.

This was an ambition truly worthy of the billion-dollar company Novell had become, and Ray’s acquisitions and attempted acquisitions of the early ’90s reflected it: Lotus, for a spreadsheet to compete with Excel (though this acquisition was not completed); WordPerfect, for a word processor to compete with MS-Word, plus a groupware package, Groupwise, to replace what Notes would have brought from the Lotus merger; Digital Research, for a workstation operating system to compete with Windows; and UNIX from Bell Labs, for a server OS system and development tools. Venerable NetWare would remain the LAN system.

The spirit was willing, but Ray without visionary Craig and presenter Judith was weak. All the companies Ray acquired had been leaders in their market at one time, but that was a couple years to a decade ago—none had adapted well to the Windows environment that was fast becoming standard. They were now in second or third place, putting out “me too” products that followed Microsoft’s lead. To out-Microsoft Microsoft, all these new acquisitions were going to have to perform heroically, stretching to reclaim past glory. Getting them to march to that drummer was the job for visionaries.

But while the senior managers Ray had brought into Novell in the late ’80s were highly qualified and steeped in industry experience, it was minicomputer industry management experience, not personal computer industry history-making experience. They had seen the PC industry swallow their previous companies, but hadn’t understood why. Ray tried, but he found that they were not personal computer visionaries, and he could not call on them to do what Craig and Judith had done.

What this new generation of senior managers did understand well was company politics. People are the same no matter what industry they are in, and these people had risen in the minicomputer industry because they were good with people.

Ray’s management style was not particularly visionary. He was the deal maker, and a deal maker functions best when he keeps his hand close to his chest. It was Craig and Judith who had compensated for that and kept the Novell rank-and-file looking outward—out at the market they served, out at the technology that was growing around their industry, and out at how they were building an industry.

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