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Novell taps technology guru to revive sagging software business

March 18, 1997

SALT LAKE CITY (AP) _ Novell Inc., seeking to revive its shrinking software empire, on Tuesday named Sun Microsystems’ technology guru Eric Schmidt as its chairman and chief executive.

Investors embraced the company’s choice of one of the high-tech industry’s stars and Internet experts. Novell’s stock jumped more than 10 percent, or about 88 cents to $9.44 per share, on the Nasdaq Stock Market.

Schmidt, a prime mover behind Sun’s popular Java programming language, fills the vacancy created last August when Robert Frankenberg quit amid criticism he wasn’t fixing the company fast enough. Schmidt takes charge April 7.

Novell still is the leading seller of operating systems used to control personal computer networks. But growth of PC networks has slowed, and Microsoft Corp. is targeting Novell’s business with its Windows NT operating system, which can perform many functions of Novell’s flagship Netware.

Microsoft’s sales of network operating systems for corporate ``intranets″ doubled last year while Novell’s rose only 10 percent, according to International Data Corp., a market research firm.

Schmidt, a 13-year veteran of Sun Microsystems Inc., was a driving force behind the company’s Java programming language for creating software on the Internet. Java makes it easier to make programs that run on any type of computer or operating system and has been licensed to every major computer and software company.

``When the opportunity came up to lead one of the most exciting companies in the networking space, my immediate reaction was `This is an opportunity of a lifetime,‴ Schmidt said.

While buoyed by the hire, shareholders demanded fast action.

``Bottom line, I think they made a good pick, all-around, given the situation,″ said Joe Antol, a New Jersey shareholder leading the Novell Investors Coalition, whose members say they own a combined 500,000 shares and have demanded in Internet chat forums that the company’s board be ousted.

``But Novell had a lot of problems,″ he added. ``(Schmidt) says it’s the opportunity of a lifetime? That’s an understatement.″

Therese Murphy, an equity analyst with Smith Barney in San Francisco, praised Schmidt as a good communicator with extensive industry experience.

Murphy said Schmidt has ``terrific technical, market and sales experience. In every respect, this makes a lot of sense.″

In other Novell moves, Joe Marengi was promoted from vice president of worldwide sales to acting president, after acting as chief executive officer for the past six months.