March 31, 1997

Net Value
Novell CEO must build a team from within
By Jamie Lewis

  It hasn't always been the case, but being a fan of the Atlanta Braves has been easy lately--that disastrous loss in last year's World Series notwithstanding.

About eight years ago, when the team stank, Ted Turner hired Bobby Cox as general manager. The two decided to resist quick fixes in the free agency market and instead built from within, which required enduring some cellar-dwelling teams.

Management stuck it out, though, and today enjoys the rewards. But success was not guaranteed when Cox and Turner announced their "build from within plan," preparing fans for the tough times to come.

A glimmer of hope. Today, Novell finds itself in a similar position. It has hired a new CEO. For the first time in a long time, there's a real glimmer of hope that Novell can turn things around. Like all technology companies, Novell will always have technology challenges.

What Novell has lacked is a single vision, one conceived by someone capable of leading the company in the realization of that vision, enforcing consistency when necessary. In Eric Schmidt, Novell hired a technologist capable of that kind of leadership, and one who has the authority to integrate the battling business units that fragmented Novell's strategy. Schmidt's standing in the Internet community and history with the Java development team are assets that can help him reinvent the company.

But the mistakes of the last five years cannot be fixed in 90 days. In this market, you're only as good as your last quarter, and Novell's past mistakes will continue to manifest themselves as current problems. Schmidt will have to endure those tough periods while continuing to keep the company focused on its long-term goals.

He will also have to make some tough decisions, chief among those the future of NetWare itself. Coming from a company steeped in traditional operating system design, Schmidt will inherit a decidedly unconventional server operating system that was designed almost a decade ago to squeeze file and print performance out of ancient Intel hardware architectures.

Can that operating system serve as the foundation for another 10 years of success? A lot of people don't think so, hence the success of Windows NT Server. Novell must decide NetWare's architectural fate soon, and get busy about building a foundation for its future.

Novell must also reconcile its cross-platform plans for NDS with its increasing emphasis on NetWare as a platform for Java applications. If Novell is serious about the cross-platform business, it must make more than just NDS available across multiple operating systems. It must enable a consistent set of distributed services (including security, an object broker and transactions) and a matching application development framework across platforms. Many other issues remain, but these core strategic decisions will have a ripple effect, driving many of Novell's plans.

Novell has many advantages, but it also has squandered many opportunities. Rebuilding a team takes time, some luck and a lot of tenacity. And some teams can't be rebuilt.

However, Novell has no chance without strong leadership, and so has made the first step toward turning things around by hiring Schmidt.

Jamie Lewis is president of The Burton Group, a research company specializing in emerging network computing technologies. He can be reached at

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