The company began in 1979 in Orem, Utah as Novell Data Systems Inc. (NDSI), a hardware manufacturer producing CP/M-based systems. Former Eyring Research Institute (ERI) employee Dennis Fairclough was the member of the original team that started Novell Data Systems. It was co-founded by George Canova, Darin Field, and Jack Davis. Victor V. Vurpillat brought the deal to Pete Musser, chairman of the board of Safeguard Scientifics, Inc., who provided the seed funding.
The company initially did not do well. The microcomputer produced by the company was comparatively weak against performance by competitors.
In order to compete on systems sales Novell Data Systems planned a program to link more than one microcomputer to operate together. The former ERI employees Drew Major, Dale Neibaur and Kyle Powell, known as the SuperSet Software group, were hired to this task.
At ERI, Fairclough, Major, Neibaur and Powell had worked on government contracts for the Intelligent Systems Technology Project, and thereby gained an important insight into the ARPANET and related technologies, ideas which would become crucial to the foundation of Novell.
The Safeguard board then ordered Musser to shut Novell down. Musser contacted two Safeguard investors and investment bankers, Barry Rubenstein and Fred Dolin, who guaranteed to raise the necessary funds to continue the business as a software company as Novell Data Systems' networking program could work on computers from other companies.
Davis left Novell Data Systems in November 1981, followed by Canova in March 1982.
Rubinstein and Dolin, along with Jack Messman, interviewed and hired Raymond Noorda. The required funding was obtained through a rights offering to Safeguard shareholders, managed by the Cleveland brokerage house, Prescott, Ball and Turben, and guaranteed by Rubenstein and Dolin.
Major, Neibaur and Powell continued to support Novell through their SuperSet Software Group.
In January 1983, the company's name was shortened to Novell, Inc., and Raymond Noorda became the head of the firm. Later that same year, the company introduced its most significant product, the multi-platformnetwork operating system (NOS), Novell NetWare.
It is distributed by TriTech Distribution Limited in Hong Kong. 
NetWare uses Novell DOS (formerly DR-DOS) as a boot loader. Novell DOS is similar to MS-DOS and IBMPC DOS, but no extra license for DOS is required; this came from the acquisition of Digital Research in 1991. Novell had already acquired Kanwal Rekhi's company Excelan, which manufactured smart ethernet cards and commercialized the internet protocol TCP/IP, solidifying Novell's presence in these niche areas.
It was around this time also that Ed Tittel of HTMLFor Dummies notoriety became involved with Novell. Tittel took up various positions within the newly acquired Excelan, becoming national marketing manager for Novell, before being named as Novell's director of technical marketing.
Novell did extremely well throughout the 1980s. It aggressively expanded its market share by selling the expensive ethernet cards at cost. By 1990, Novell had an almost monopolistic position in NOS for any business requiring a network.
With this market leadership, Novell began to acquire and build services on top of its NetWare operating platform. These services extended NetWare's capabilities with such products as NetWare for SAA, Novell multi-protocol router, GroupWise and BorderManager.
However, Novell was also diversifying, moving away from its smaller users to target large corporations, although the company later attempted to refocus with NetWare for Small Business. It reduced investment in research and was slow to improve the product administration tools, although it was helped by the fact its products typically needed little "tweaking" — they just ran.
As Novell faced new competition, Noorda was replaced by Robert Frankenberg in 1994, and was followed by several CEOs who served short terms. One of Novell's major innovations at the time was Novell Directory Services (NDS), now known as eDirectory. Introduced with NetWare v4.0. eDirectory replaced the old Bindery server and user management technology employed by NetWare 3.x and earlier.
In 1996, the company began a move into internet-enabled products, replacing reliance on the proprietary IPX protocol in favor of a native TCP/IP stack. The move was accelerated when Eric Schmidt became CEO in 1997 and then Christopher Stone was brought in. The result was NetWare v5.0, released in October 1998, which leveraged and built upon eDirectory and introduced new functions, such as Novell Cluster Services (NCS, a replacement for SFT-III) and Novell Storage Services (NSS), a replacement for the Traditional/FAT filesystem used by earlier versions of NetWare. While NetWare v5.0 introduced native TCP/IP support into the NOS, IPX was still supported, allowing for smooth transitions between environments and avoiding the "forklift upgrades" frequently required by competing environments. Similarly, the Traditional/FAT file system remained a supported option.
Novell's decline and loss of market share accelerated under Eric Schmidt's leadership, with Novell experiencing industry-wide decline in sales and purchases of NetWare and a drop in share price of $40.00/share to $7.00/share.
The inclusion of networking as a core system component in all mainstream PC operating systems after 1995 led to a steep decline in Novell's market share. Unlike Windows 3.1 and its successors, Windows 95, Linux and OS/2 all included network functionality which greatly reduced demand for third-party products in this segment.
Analysts commented that the primary reason for Novell's demise was linked to its channel strategy and mismanagement of channel partners under Eric Schmidt's leadership. Under Ray Noorda's leadership, Novell provided upgrades to resellers and customers in the same packaging as a newly purchased copy of NetWare, but at one third the cost, which created a "gray market" that allowed NetWare resellers to sell upgrades as newly purchased NetWare versions at full price periodically which Novell intentionally did not track. Ray Noorda commented to several analysts he devised this strategy to allow front line resellers to "punch through" the distributors like Tech Data and Ingram and acquire NetWare versions at a discounted rate where Novell "looked the other way" then allowed them to sell these versions as newly purchased NetWare versions in order to pay the Novell Field Support Technicians Salaries who for the most part were employees who worked for the front line resellers as Novell CNE (Certified NetWare Engineers).
Noorda commented that this strategy was one he learned as an executive at General Electric when competing against imported home appliances, allow the resellers to "make more money off your product than someone else's". Eric Schmidt embarked on a disastrous strategy to remove the upgrades as whole box products without understanding Novell's channel dynamics, then directed Novell's general counsel to initiate litigation against a large number of Novell resellers who were routinely selling upgrades as newly purchased NetWare versions. Although this move bolstered Novell's revenue numbers for several quarters, Novell's channels subsequently collapsed with the majority of Novell's resellers dropping NetWare for fear of litigation.
By 1999, Novell had lost its dominant market position, and was continually being out-marketed by Microsoft as Novell's resellers dropped NetWare for fear of litigation, allowing Microsoft to gain access to corporate data centers by bypassing technical staff and selling directly to corporate executives. Most resellers then re-certified their Novell CNE employees as Microsoft MSCE technicians, the field support technicians who were Novell's primary contact in the field with direct customers, and were encouraged to make NetWare look second place with Windows 2000 features such as Group Policy. Microsoft's GUI was also more popular and looked more modern than the character-based Novell interfaces. With falling revenue, the company focused on net services and platform interoperability. Products such as eDirectory and GroupWise were made multi-platform.
In October 2000, Novell released a new product, dubbed DirXML, which was designed to synchronize data, often user information, between disparate directory and database systems. This product leveraged the speed and functionality of eDirectory to store information, and would later become the Novell Identity Manager and form the foundation of a core product set within Novell.
In July 2001, Novell acquired the consulting company, Cambridge Technology Partners, founded in Cambridge, MA by John J. Donovan, to expand offerings into services. Novell felt that the ability to offer solutions (a combination of software and services) was key to satisfying customer demand. The merger was apparently against the firm's software development culture, and the finance personnel at the firm also recommended against it. The CEO of CTP, Jack Messman, engineered the merger using his position as a board member of Novell since its inception and soon became CEO of Novell as well. He then hired back Chris Stone as vice chairman and CEO to set the course for Novell's strategy into open source and enterprise Linux. With the acquisition of CTP, Novell moved its headquarters to Massachusetts.
In July 2002, Novell acquired SilverStream Software, a leader in web services-oriented application, but a laggard in the marketplace. The business area called Novell exteNd contains XML and Web Service tools based on Java EE.
In November 2003, Novell acquired SuSE, a developer of a leading Linux distribution, which led to a major shift of power in Linux distributions. IBM also invested $50 million to show support of the SuSE acquisition. Within the openSUSE project, Novell continues to contribute to SUSE Linux. openSUSE can be downloaded freely and is also available as boxed retail product.
In mid-2003, Novell released "Novell Enterprise Linux Services" (NNLS), which ported some of the services traditionally associated with NetWare to SUSE LINUX Enterprise Server (SLES) version 8.
In November 2004, Novell released the Linux-based enterprise desktop Novell Linux Desktop v9. This product was based on Ximian Desktop and SUSE Linux Professional 9.1. This was Novell's first attempt to get into the enterprise desktop market.
From 2003 through 2005 Novell released many products across its portfolio, with the intention of arresting falling market share and to move away from dependencies on other Novell products, but the launches were not as successful as Novell had hoped. In late 2004, Chris Stone left the company after an apparent control issue with then Chairman Jack Messman. In an effort to cut costs, Novell announced a round of layoffs in late 2005. While revenue from its Linux business continued to grow, the growth was not fast enough to offset the decrease in revenue of NetWare. While the company's revenue was not falling rapidly, it wasn't growing, either. Lack of clear direction or effective management meant that Novell took longer than expected to complete its restructuring.
In June 2006, chief executive Jack Messman and chief finance officer Joseph Tibbetts were fired, with Ronald Hovsepian, Novell's president and chief operating officer, appointed chief executive, and Dana Russell, vice-president of finance and corporate controller, appointed interim CFO.
In August 2006, Novell released the SUSE Linux Enterprise 10 (SLE 10) series. SUSE Linux Enterprise Server was the first enterprise class Linux server to offer virtualization based on the Xen hypervisor. SUSE Linux Enterprise Desktop (popularly known as SLED) featured a new user-friendly GUI and XGL-based 3D display capabilities. The release of SLE 10 was marketed with the phrase "Your Linux is Ready", meant to convey that Novell's Linux offerings were ready for the enterprise. In late September 2006 Novell announced a real time version of SLES called SUSE Linux Enterprise Real Time (SLERT) based on technology from Concurrent Computer Corporation.
In 2004, Novell sued Microsoft, asserting it had engaged in antitrust violations with regard to Novell's WordPerfect business in 1994 through 1996. Novell's lawsuit was subsequently dismissed by the United States District Court in July 2012 after it concluded that the claims were without merit.
Despite this, on November 2, 2006, the two companies announced a joint patent agreement to cover their respective products. They also promised to work more closely, to improve compatibility of software, setting up a joint research facility. Executives of both companies expressed the hope that such cooperation will lead to better compatibility between Microsoft Office and OpenOffice.org and better virtualization techniques.
Microsoft CEO Steve Ballmer said of the deal, "This set of agreements will really help bridge the divide between open-source and proprietary source software."
The deal involved upfront payment of $348 million from Microsoft to Novell for patent cooperation and SLES subscription. Additionally, Microsoft agreed to spend around $46 million yearly, over the next 5 years, for marketing and selling a combined SLES/Windows Server offering and related virtualization solutions, while Novell paid at least $40 million yearly to Microsoft, in the same period.
Initial reaction from members of the FOSS community over the patent protection was mostly critical, with expressions of concern that Novell had "sold out" and of doubt that the GNU GPL would allow distribution of code, including the Linux kernel, under this exclusive agreement.
In a letter to the FOSS development community on November 9, 2006, Bradley M. Kuhn, CTO of the Software Freedom Law Center (SFLC), described the agreement as "worse than useless". In a separate development, the chairman of the SFLC, Eben Moglen, reported that Novell had offered cooperation with the SFLC to permit a confidential audit to determine the compliance of the agreement with the GPL (version 2).Richard Stallman, founder of the Free Software Foundation, said in November 2006 that changes coming with version 3 of the GPL would preclude such deals. When the final revision of the third version of the GPL license was decided, the deal between Microsoft and Novell was grandfathered in. A new clause will let companies like Novell distribute GPLv3 software even if they have made such patent partnerships in the past, as long as the partnership deal was made before March 28, 2007 (GPLv3 Section 11 paragraph 7).
On November 12, 2006, the Samba team expressed strong disapproval of the announcement and asked Novell to reconsider. The team includes an employee of Novell, Jeremy Allison, who confirmed in a comment on Slashdot that the statement was agreed on by all members of the team, and later quit his job at Novell in protest.
In early February 2007, Reuters reported that the Free Software Foundation had announced that it was reviewing Novell's right to sell Linux versions, and may even ban Novell from selling Linux, because of an agreement. However, Eben Moglen later said that he was quoted out of context. He was explaining that GPL version 3 would be designed to block similar deals in the future. Currently,[when?] Novell is not violating the GPL version 2 but the GPLv3 prevents such deals being made in the future. Microsoft has released two public covenants not to sue for the infringement of its patents when using Moonlight. The two covenants require the implementation to not be released in GPLv3.
In December 2009, Novell announced its intention to lead the market it identified as intelligent workload management (IWM). The company's products will enable customers to manage diverse workloads in a heterogeneous data center.
Novell had long been rumored to be a target for acquisition by a variety of other companies. On March 2, 2010, Elliott Associates, L.P., an institutional investor with approximately 8.5% stock ownership of Novell, offered to acquire the company for $5.75 per share in cash, or $1 billion. On March 20, 2010, the company declined the offer and stated that the proposal was inadequate and that it undervalued the company's franchise and growth prospects.
Novell announced in November 2010 that it had agreed to be acquired by Attachmate for $2.2 billion. Attachmate plans to operate Novell as two units, one being SUSE. As part of the deal, 882 patents owned by Novell are planned to be sold to CPTN Holdings LLC, a consortium of companies led by Microsoft and including Apple, EMC, and Oracle. According to Novell's SEC filing, the patents "relate primarily to enterprise-level computer systems management software, enterprise-level file management and collaboration software in addition to patents relevant to our identity and security management business, although it is possible that certain of such issued patents and patent applications read on a range of different software products". Additionally, the future owner anticipates no change to the relationship between the SUSE business and the openSUSE project as a result of this transaction.
On April 27, 2011, Novell announced that the merger with Attachmate had been completed, with Attachmate paying $6.10 per share in cash to acquire Novell. Immediately prior, Novell completed the sale of "certain identified issued patents and patent applications" to CPTN Holdings LLC for $450 million in cash. Novell became a wholly owned subsidiary of The Attachmate Group, the parent company of Attachmate Corporation.
The U.S. Department of Justice announced that in order to proceed with the first phase of their acquisition of certain patents and patent applications from Novell Inc., CPTN Holdings LLC and its owners altered their original agreements to address the department's antitrust concerns. The department said that, as originally proposed, the deal would jeopardize the ability of open source software, such as Linux, to continue to innovate and compete in the development and distribution of server, desktop, and mobile operating systems, middleware, and virtualization products. With regard to licensing the patents:
All of the Novell patents will be acquired subject to the GNU General Public License, Version 2, a widely adopted open-source license, and the Open Invention Network (OIN) License, a significant license for the Linux System
CPTN does not have the right to limit which of the patents, if any, are available under the OIN license; and
Neither CPTN nor its owners will make any statement or take any action with the purpose of influencing or encouraging either Novell or Attachmate to modify which of the patents are available under the OIN license
Concurrent with the closing of the acquisition, some of Novell's products and brands were transferred to another of Attachmate Group business units, NetIQ, and the SUSE Linux brand was spun off as its own business unit. The fourth business unit, Attachmate, was not directly affected by the acquisition.
On April 2011, Attachmate announced layoffs for the Novell workforce, including hundreds of employees from their ProvoUtah Valley center, raising questions about the future of some open source projects such as Mono.
Novell is organized into product development, sales, and services divisions with the following executive management team:
Kathleen Owens – President and General Manager
Dave Wilkes — Vice President, Engineering
Eric Varness — Vice President, Product Management and Marketing
Norman Rohde - Vice President, Sales for Europe, the Middle East, and Africa
Jon Hale — Vice President, North America Sales
Boris Ivancic — Vice President and General Manager, Asia Pacific
Ron Milton — Vice President, Global Services & Customer Value Realization
Sergio Toshio Mituiwa — Vice President and General Manager, Latin America
Katherine Tate — Vice President, Global Sales Operations
Novell products are organized into three categories:
Collaboration – The focus of this product group helps people connect with each other and work together. These products helps boost a customer's employee productivity, as individuals and teams. These collaboration offerings include:
Email, calendaring, contact management and task management
Team workspaces with doc management, workflows, and social streams
Endpoint Management – The focus of this product group is to give customer's employees what they need to do their work, regardless of physical location. This group of products allows an IT staff can give the proper working environment to each person, and keep it updated remotely using a unified management console, device agent and database. The goal of these application, configuration, and endpoint security management products, make sure everyone's devices are:
File & Networking Services – These products provide core file, print, and networking services. They offer a platform for networking in a mixed Windows/Linux/Mac environment. This group of products helps:
Control and automate file storage
Simplify network management
Enable users to install printers easily
Automate disaster recovery of key business systems
In addition to products, Novell also provides support, training, consulting and other services to its customers.
Novell has a wide array of web-based and phone-based support options for its customers. The Novell support website has repeatedly been named one of the "Ten Best Web Support Sites" by the Association of Support Professionals (ASP) and has been inducted into the ASP Hall of Fame. Novell received an Outstanding Website Award in the WebAward Competition for their Cool Solutions website with a searchable database of advice, tools and problem fixes submitted by users from all over the world.
Novell also hosts support forums covering all of their current and legacy products still within the support lifecycle including Open Enterprise Server, GroupWise, ZENworks and NetWare. Novell offers users both HTTP and NNTP access to the support forums and a search option. While Novell encourages the use of these forums, it does not officially monitor these forums. The forums are maintained by Knowledge Partners that have a demonstrated competency with the various products and volunteer their time to try and help the wider community.
Novell maintains a number of wikis with up-to-date information on a number of its products. For instance, as new NetWare service packs are released the NetWare wiki is updated with tips and known issues with the service packs. In some cases, the service packs themselves will have their own wiki with information added from feedback provided in the support forums.
^See quote from Eben Moglen, the Foundation's general counsel: "The community of people wants to do anything they can to interfere with this deal and all deals like it. They have every reason to be deeply concerned that this is the beginning of a significant patent aggression by Microsoft". Archived March 16, 2013 at the Wayback Machine
^"FORM 8-K — Novell Inc.". U.S. Securities and Exchange Commission. November 21, 2010. Retrieved November 27, 2010. Also on November 21, 2010, Novell entered into a Patent Purchase Agreement (the "Patent Purchase Agreement") with CPTN Holdings LLC, a Delaware limited liability company and consortium of technology companies organized by Microsoft Corporation ("CPTN"). The Patent Purchase Agreement provides that, upon the terms and subject to the conditions set forth in the Patent Purchase Agreement, Novell will sell to CPTN all of Novell's right, title and interest in 882 patents (the "Assigned Patents") for $450 million in cash (the "Patent Sale").