Novell is a strange company.
Founded in 1983, it dominated the Local Area Networking market for most of the 1980s with NetWare, which was stable and fast and let everyone do what they wanted.
Then the 1990s came, and it got a little strange. Novell released NetWare 4, and NetWare Directory Services which was this weird thing where your network was all over and things are stored in a directory. No one knew what a directory was and everyone stayed with NetWare 3 which they all understood and could get their heads around. It also didn't help that Netware 4.0, 4.01, and 4.02 were all kind of scary, and Novell didn't get NDS right until 4.10.
Meanwhile, Microsoft. You all know the story there. An amazing marketing juggernaut, mediocre technology and monopolistic practices. Actually, to be fair, they have good products, they can just market them in ways no other company has the means to.
Anyway, founder and longtime CEO Ray Noorda left in 1994, and Bob Frankenberg took over. Bob's two major accomplishments were purchasing WordPerfect Corporation and UNIX from AT&T. His goal was to become a Microsoft killer. By 1996, Frankenberg had left, Novell sold WordPerfect to Corel and Unix and UnixWare to SCO, and was lumbering like it had just hit an iceberg.
Novell got a new CEO in 1997, Dr. Eric Schmidt from Sun, who has given the company an amazing shot in the arm and has repositioned Novell as an Internet infrastructure company. NDS (now called Novell Directory Services is stable, fast, scalable, and can do things Active Directory couldn't even understand, and it runs on Solaris, NT, and Linux as well as NetWare. Novell makes the leading caching appliance on the market now (licenced to hardware vendors), and is still a force in the groupware/messaging market with GroupWise and still shipping lots of NetWare which now speaks IP and has a web server, Oracle and IBM's WebSphere built in too. And ZENworks is the best desktop management package out there because of the power of the directory behind it.
So, the bottom fell out of the NASDAQ in 2000, and Novell's stock and profits went with it. Lots of layoffs, and then in March 2001, the surprising announcement that they were merging with Cambridge Technology Partners, doubling the number of employees they have, and taking CTP's CEO Jack Messman as Novell's president and CEO. The combined company will emphasize consulting while still developing their software.
The biggest question, though is whether Novell can survive the tide of Microsoft, and everyone's assumption that they must already be dead, and well, everyone is moving to Windows NT, right? They've got the best technology out there, in my opinion, and new products like DirXML and NIMS are just the most amazing things ever, but their marketing has always stunk, and they seem to have lost tremendous mindshare and are still thought of as a 1980s company in a 21st century world.
In November, 2001, the company announced relatively flat earnings and the cutting of over 1500 jobs. This seems mostly due to the general state of the economy and the usual job cutting that occurs during a merger. Novell recently released NetWare 6 which has gotten good reviews and may help stem the market share hemorraging, but this remains to be seen. eDirectory continues to be the best directory service in the industry and getting better while the competitors just stagnate behind them, but they will need to get people thinking of them as still viable to regain their past glory.