Editing Novell (section)

====Decline of marketshare====
[[File:Eric Schmidt at the 37th G8 Summit in Deauville 037.jpg|thumb|left|upright=0.7|Eric Schmidt, CEO of Novell from 1997 to 2001]]
The inclusion of [[computer network|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 predecessors, [[Windows NT]], [[Windows 95]], [[Linux]], and [[OS/2]] all included network functionality which greatly reduced demand for third-party products in this segment.  For instance, one mid-1996 survey of a thousand corporate users, conducted by [[Forrester Research]], showed that 90 percent of them owned NetWare but only 20 percent said they had upgraded to the latest NetWare version and less than half of the users thought they would still be using NetWare three years hence.<ref name="WSJ_Frankenberg_1996"/> By March 1996, the company's stock price had fallen from a high of $33 a share in 1993 to a new low of under $12.<ref name="BW_Knell_1996"/> Revenue declined from 1995 on.<ref name="BW_Schmidt_1997"/>  By 1997, Windows NT was winning 42 percent of new network operating system installations versus 33 percent for NetWare, and it was on the verge of overtaking NetWare even when upgrade sales were included.<ref name="BW_Schmidt_1997"/> Overall, NetWare's market share had fallen to 26 percent and had been passed by Windows NT's 36 percent.<ref name="NW_Alive_2000"/>  Unix also had a significant share, and the free software Linux operating system had started to appear and make inroads as well.<ref name="NW_Alive_2000"/><ref name="Proven_2013"/>

With revenues in decline, Schmidt took actions to control costs, and some 18 percent of Novell employees were laid off during the first few months of his tenure.<ref name="BW_Schmidt_1997"/>  In addition he was forced to halt NetWare shipments to resellers because unsold inventory levels were so high.<ref name="BW_Schmidt_1997"/>  By the end of summer 1997, Schmidt was saying, "I took the job on the presumption that we would not have to do this. If I'd known what shape the company was in, I might not have taken it."<ref name="BW_Schmidt_1997"/>  While there was some speculation that Novell might relocate much of the company to its San Jose facility,<ref name="DN_Provo_1998"/> Novell instead recommitted to Provo, building a new headquarters tower that opened in 2000.<ref name="BYU_Provo_2000"/>

But Novell's decline and loss of market share accelerated under Schmidt's leadership, with Novell experiencing an across-the-board decline in sales and purchases of NetWare and a drop in share price from {{US$|40.00|link=yes}}/share to {{US$|7.00}}/share. Analysts commented that the primary reason for Novell's demise was linked to its channel strategy and mismanagement of channel partners under Schmidt.<ref name="Shankland_Stock"/><ref name="Prince_1999_Stock"/><ref name="CNN_2000"/>

Schmidt embarked on a channel strategy to undo Noorda's "look the other way" approach and thereby remove the upgrades as whole box products, 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.<ref name="Novell_1997_Resellers"/><ref name="Novell_1995_Aqua"/><ref name="Deseret_1998_Novell"/><ref name="CRN_Ingram"/>

[[Image:Private (?) F28 takes off into dusk (5046240881) (2).jpg|thumb|right|From 1998 to 2001, Novell owned this [[Fokker F28 Fellowship]] jet<ref>{{cite web | url=https://www.airliners.net/photo/Fokker-F-28-1000-Fellowship/507908/L | title=Aviation Photo #0507908: Fokker F-28-1000 Fellowship - Untitled }}</ref> which it operated as a corporate shuttle aircraft, here seen taking off from San Jose bound for Provo]]

By 1999, Novell had lost its dominant market position, and was continually being out-marketed by Microsoft as resellers dropped NetWare, 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— the field support technicians who were Novell's primary contact in the field with direct customers—as Microsoft [[MCSE]] technicians, and were encouraged{{by whom|date=January 2017}} to position NetWare as inferior to [[Windows 2000]] features such as Group Policy and Microsoft's [[GUI]], which was considered to be 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.

By 2000, some large NetWare enterprise customers, such as [[Chase Manhattan Bank]], [[United Parcel Service]], and the [[University of Southern California]] were in the process of migrating most or all of their NetWare systems to alternatives.<ref name="NW_Alive_2000"/>  Revenue warnings during the second quarter of 2000 resulted in a 40 percent drop in the company's stock price.<ref name="NW_Alive_2000"/>  In October 2000, Novell released a new product, dubbed "DirXML", which was designed to synchronize data—typically 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]], forming the foundation of a core product set within Novell.

During Schmidt's tenure during the late 1990s, Novell developed and delivered a series of Internet-centric products that were well-reviewed.<ref name="NW_Alive_2000"/>  But these new products did not sell as well as the company had hoped,<ref name="CNET_Schmidt_2001"/> in part due to Novell channel issues with training, lead generation, and support.<ref name="NW_Alive_2000"/> Indeed, there were reports of [[channel stuffing]] taking place.<ref name="Reg_Peaked_2013"/>  So despite its efforts in these other spaces, Novell was increasingly becoming irrelevant within the industry.<ref name="Reg_Peaked_2013"/>  Of Schmidt's efforts with Novell, [[News.com]] wrote, "He had traversed a rocky road as chief executive at Novell, briefly laying a smooth path for a renaissance at the aging network software provider before succumbing to strategy issues that have plagued it for years."<ref name="CNET_Schmidt_2001"/>