Novell had more than cycles. It had astounding growth. The eighties were a time when several companies sprang from nothing to billions of dollars in annual sales. Other such companies were Microsoft and Compac Computer. In all these companies not only did sales grow, employees grew as well. Here are some stories about how Novell did it's growing.
Eliason's connection with Novell began in the fall of 1984, when he was a vice president, based in Salt Lake City, of First Security Bank. Eliason recalled, "The branch manager in Orem said, `Why don't you go visit Novell; I think they're turning around.' So I went down and called on Ray Noorda and found out he was working for a line of credit, and Zion's Bank currently had the line, and they subsequently went back and met with Bill Gillan, the controller, and we extended a line of credit, and Zion's did, and Novell preferred what First Security offered, and we got the business.
"Some months after that, I was aware that Ray was looking for a CFO to replace Bill Gillan. I had taken Ray out to dinner at the Underground Restaurant in Provo, when he was first looking for the CFO, and volunteered my services and gave him my resume. That's when they hired Dick Eales as CFO."
Eales had been the CFO of The Penn Central Corporation's Energy Group from about 1979 to 1984. His involvement with Novell began in January 1984, when he worked as a financial consultant to Safeguard and Novell. In November 1984, he became Novell's CFO, although he continued to spend as much as half of his time working as a consultant to Safeguard and its affiliates.
According to Eliason, the replacement of Eales as CFO was made possible by Safeguard's sale of its Novell holdings. "Ray wanted a CFO, but at that time, Safeguard owned 52 percent of the company. And Safeguard wanted to put their own guy in, and so they hired Dick Eales, who was based in Philadelphia. He commuted from Philadelphia to Orem for about a year. After the public offering in January 1985, Safeguard no longer owned 52 percent, so Ray figured he could do what he wanted."
Noorda hired Eliason the same way he had hired Jack Davis at General Automation years before: at an early morning meeting. Eliason recalled, "About July 5, 1985, Ray called me at 7:00 in the morning and said, `Why don't you stop by before you go up to Salt Lake City?' And so I did, and that's when he offered me the job to take Dick Eales's place. It was August 5th when I joined the company, and it was planned that Dick Eales would leave at the end of December. He did, and I became CFO.
"I remember Dick Eales' telling me as we had this five months of overlap, `Ray likes to do things quick and dirty' -- that was his terminology. Which meant that he won't give you any help and he likes to do things as quickly with as few resources as possible and kind of wing it, and that turned out to be exactly true."
Eliason was one of several new managers hired in 1985.
Another key person brought on in April 1985 was Richard King. King's is classic story of once-in-a-lifetime opportunity narrowly missed, like the person who loses a winning lottery ticket, or Gary Kildahl allowing Microsoft to get IBM's contract to license DOS.
It seems that King had the opportunity to become a member of Superset. In 1981, he received a BS degree in computer science from BYU. He used to hang out with Major, Powell, Neibauer, and Hurst when they were still undergraduates at the Y. King was invited to join Superset when they incorporated and were doing contract work for Novell Data Systems, but King declined because he had landed a regular job -- with a salary in the low 20s and benefits -- in BYU's computer science department. King was married and had a couple of kids, so he decided he was better off playing it safe.
At the time it seemed like the right thing to do. Who could have guessed that so many multimillionaires would leap from the loins of the failing company?
In 1985, King's old Superset buddies finally convinced him that Novell was going places and he ought to come along for the ride. He was hired in April as manager of Software Development. (A year later, he was promoted to vice president of Software Development, and his department had grown to 22 employees.)
The rapid growth in both income and installed base caused equally rapid changes in the company's personnel. One of the major changes was raw growth: more employees and managers were hired. The number of employees doubled, from about 97 at the end of 1984 to about 236 by the end of 1985 (some 200 were based in Orem).
Besides Richard King (hired April 1985) and Ron Eliason (hired August 1985), David Bradford was hired as company's secretary and staff legal counsel. Bradford was recruited from the Bay area, where he had been running a retail computer store. He joined the company in October 1985, reporting to Ron Eliason.
The personal computer industry was new enough that there were not enough industry experts to go around. Finding a resume that said, "Five years experience in the personal computer industry." was like finding a needle in a haystack, so the industry was open to good people from all walks of life. In the Provo Orem area, people from all walks of life were now getting hired into Novell, and it's sister high-tech growth company, WordPerfect, but this was not enough.
People conduits were set up. One people conduit was from the minicomputer industry to Novell. As minicomputer companies began to feel the heat of competition from mainframes above them and PC-based LANs below them, their growth suffered, and they would reorganize, or, a term that became popular in the nineties, "downsize". Many of these people moved from the declining minicomputer companies into the growing PC and LAN companies.
The other tool Ray used to grow Novell personnel was acquisitions -- he would buy a company to get it's good people. This was a strong tool for getting people, but like any strong tool, it could be misused. The hazard of acquiring people through acquisition was that they would bring their culture from the acquired company into Novell relatively in tact, even if that culture had been a losing one in the marketplace.
It was from acquisitions that the eclipsing of the Utah-centric management of Novell occurred. Most of the companies acquired had their top management in Northern California. As Novell grew by acquisition, it became like many high companies -- an organization with top management in Silicon Valley, and much productivity taking place in other "hinterland" areas in the US or overseas. In the case of Novell, Utah became the main hinterland. The problem with this was having these different cultures understand each other, and cooperate successfully. More on this later.
About the same time King arrived at Novell, Superset's role as guardian of the Netware code began to change. As the product line was expanded in 1985 to include electronic mail, gateways, and other features peripheral to Netware, the company hired outside firms or set up separate in-house engineering units to develop these add-ons. Eventually, as Superset focused its attention on developing new versions of Netware (such as System Fault Tolerant Netware 286, which began development in November 1984), "sorcerer's apprentices" were brought in to take over responsibility for certain parts of the code from the Superset wizards.
"There was a substantial change in the ownership [of Netware]," said Dale Neibauer. "Most of the utilities that ran on the workstations were pulled out of Superset. Until that time, we were doing almost all of it. We gave away all of those things like archive servers, communications servers, all of that stuff basically moved out when Richard King came.
"And so we concentrated on a much smaller set of codes. When a piece of code gets to the point where we need to get rid of it or want to get rid of it, or Novell wants to lighten our burden and focus us on something else, then typically they will nominate a sorcerer's apprentice who will come and work under us for as long as it takes for them to become comfortable with the code. And that's still what happens."
Early sorcerer's apprentices were Howard Davis and Kevin Kingdon, both of whom picked up "chunks" of the Netware operating system. NetBIOS code and all of the LAN card drivers were also "handed off" in the 1985 period.
Different parts of the code were given away at different times from 1985 onward. Early in 1987, development began on "Portable Netware," a version of Netware that could be "ported" to a host of different operating systems, such as UNIX. (Introduced in February 1989, Portable Netware could run on various minicomputer systems, effectively "marrying" the PC LAN world and the minicomputer world.) In 1987, Superset turned over for the first time the keys to the Netware kingdom to the Portable Netware development team. In a 1990 interview, Neibauer recalled:
There was a really big convocation of wizards, and a big gift when Portable Netware was set up. When Portable Netware was set up, for the first time Novell set up an entire SWAT team of programmers to come in and learn how the entire operating system worked. And at that point, Drew and Kyle and I gave away the understanding for the entire operating system of Netware itself. And that team took that understanding and then went out and made Portable Netware so it would work like the existing Netware.
Then that was the cloning of the whole understanding of architecture, the philosophy, the code of the operating system, when that project spun off. Then Novell took some of the people out of that, then cross-fertilized back into the engineering group and took over Netware 286. So that Superset no longer deals with Netware 286 at all.
It's now to the point where it's a stable, mature product handled by other engineers. And a lot of new development is handled by Novell engineers who are not Superset.
Right now, what goes on inside Superset is mostly new operating systems work. Netware 386 is a prime example of that project over the last couple of years. And also new communications technology, beyond TCP/IP.
For a long time, Netware had been our toy. We got to call all the technical shots. And that had to quit happening. It just doesn't work over the long haul when the company gets big. The guys who are making the products cannot also be the guys who are doing all the specifying on the product, because either one is a full-time job.
As Novell grew, Superset also began to lose touch with the business aspects of Novell. Some of them, like Neibauer, missed that small company feeling. "We were no longer writing the sales materials and making some calls on customers and getting the weekly reports on what shipments had been made and having our finger in all of the hardware and everything else like we had done for years," he said. "That was a lot of fun. You know what's going on instantly in all areas of the company. And so when you lose touch with some of those things, it's kind of sad."