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 INC.
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 Ray 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.
In 1983, Ray Noorda took over leadership of Novell and engaged the SuperSet group to work on networking products. The team was originally assigned to create a CP/M disk sharing system to help network the CP/M hardware that Novell was selling at the time. Under Ray Noorda's leadership, the group developed a successful file sharing system for the newly introduced IBM-compatible PC.
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-platform network operating system (NOS), Novell NetWare.
It is distributed by TriTech Distribution Limited in Hong Kong.[4]
Novell INC based its network protocol on Xerox Network Systems (XNS), and created its own standards from IDP and SPP, which it named Internetwork Packet Exchange and Sequenced Packet Exchange (SPX). File and print services ran on the Netware Core Protocol (NCP) over IPX, as did Routing Information Protocol (RIP) and Service Advertising Protocol (SAP).
NetWare uses Novell DOS (formerly DR-DOS) as a boot loader. Novell DOS is similar to MS-DOS and IBM PC 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, author of HTML For Dummies, 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.