The Four Hundred

The NetWare operating system, like the CPF operating system for the System/38, the granddaddy of the iSeries, is one of the granddaddies of the IT industry. Despite the onslaught of Windows and Lotus Notes/Domino in the 1990s, NetWare and its related GroupWise groupware are still very popular at OS/400 shops. As Novell bought open-source software maker Ximian this week, to leap into the Linux market with both feet, it also said that it would put NetWare in maintenance mode.

This is going to have a dramatic effect on OS/400 shops in the long run, for reasons I will explain below. But don't panic. Novell is not going to stop supporting or selling NetWare.

Most small and midsized businesses in the 1980s and early 1990s--and indeed, some very large companies, too--had their first print and file servers and homegrown applications running on NetWare. Some of these firms were the same companies that bought System/38s, System/36s, and AS/400s to run their ERP software. The two were sometimes linked together, and sometimes stood alone. A larger portion of these companies never had a central computer system before--NetWare was their first machine, and it ran their first applications. Without NetWare, there would have been no Compaq server business in the 1980s, and there would not have been a target-rich environment for Microsoft to go after with Windows NT and its follow-ons in the late 1990s and early 2000s.

But neither Microsoft Windows nor the advent of open-source Linux has driven NetWare from the data centers and departments of the world, so much as they have made it impossible for NetWare, like other operating system providers, to make money on operating systems. When NetWare 6 was announced a few years ago, there were 4.5 million NetWare servers worldwide and 81 million users banging away on those servers. This is arguably the largest installed server base, in terms of users. At the time, Windows probably had somewhere around 6 million servers installed worldwide, but far fewer users sitting at them. Compare this with the IBM zSeries mainframe and iSeries midrange bases. By my estimates, there are about 10,000 IBM mainframes with 20 million users, and about 450,000 AS/400 and iSeries machines with 25 million users worldwide. NetWare continues to be an important part of IT infrastructure, even if it is performing specialized work and is not terribly sexy.

The problem for Novell is that the NetWare base has been shrinking every year, and it will continue to shrink. Several generations of very smart CEOs at the company have tried to hold back the tide, but Windows and Linux have momentum that NetWare never will have again. Linux is growing, Windows is growing, Unix is stable, and Novell has a bunch of services applications that used to be only on NetWare, which it has ported to other environments so it can be a middleware vendor.

Novell bought Ximian to spearhead its aggressive moves into Linux and away from trying to make NetWare a be-all, end-all. The financial terms of the deal were not disclosed, but Ximian has deep Linux knowledge and is worth many times whatever sales it has, because Novell needs its depth to quickly become a Linux player. (In the 1990s, Novell bought Unix from AT&T for much the same reason as why Unix was taking off, but the company lost patience after a few years and eventually sold Unix to Santa Cruz Operation, the forebear of The SCO Group, which has filed a Unix-Linux intellectual property suit against IBM.

Ximian, based in Boston, has about 70 programmers and managers, who will be absorbed into the company as Novell Ximian Services. Miguel de Icaza, who has been the chief technology officer at Ximian and led the Gnome project, will remain at Novell, and so will Nat Friedman, a cofounder of the company who is managing the Mono project. The Ximian team will be given a new mandate, too: porting Novell's GroupWise middleware, which is third behind Microsoft's Exchange Server and IBM's Notes/Domino in market share for groupware. The combination of the Ximian Desktop application suite and GroupWise on Linux desktops as a single, unified application (which will happen down the road) will be a compelling alternative to Microsoft's offerings on Windows desktops. The Ximian team will also allow Novell to weave Linux services into NetWare, should the company go forward with these plans.

While Novell's executives have been hinting in the press that they are considering mothballing NetWare, they have not done anything officially yet. They are undoubtedly sending up trial balloons to see which way the wind is blowing in the NetWare and GroupWise customer bases. With OS/400 shops being dominant among the NetWare and GroupWise faithful, their input will be key to what Novell does with these two products in the future. Now is the time to tell Novell what you are thinking, and if you feel like it, if you are an OS/400-NetWare shop, feel free to contact me, too, at tpm@itjungle.com, and tell me what you think.

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