Will Novell Win $3 Billion Judgment Against Microsoft?
A jury in Utah is deliberating whether Microsoft practiced anti-competitive behavior to destroy Novell’s WordPerfect office suite business in the 1990s. If the jury finds in Novell’s favor, the judge could award triple damages as high as $3 billion, according to the Salt Lake City Tribune. But The VAR Guy suspects Microsoft is going to win this case. Here’s why.
Admittedly, Microsoft had some anti-competitive behaviors in the 1990s. Microsoft’s license agreements at the time made it virtually impossible for PC makers to change Windows desktop settings or bundle alternative operating systems. But Novell’s lawsuit against Microsoft focuses on the application market, claiming that Microsoft made anti-competitive changes to Windows 95 that destroyed Novell’s WordPerfect business.
Are We There Yet?
True, Microsoft made changes to Windows 95 that likely caused challenges for Novell’s WordPerfect developers. But throughout the Novell vs. WordPerfect trial, Microsoft apparently has demonstrated — multiple times — that the WordPerfect business was in serious decline even before Novell acquired WordPerfect in 1994.
One piece of smoking gun evidence may involve Quattro Pro, a spreadsheet that Novell had acquired from Borland. According to Microsoft’s attorneys, quoted by the Salt Lake City Tribune: “Quattro Pro was nowhere near ready for inclusion in a suite of products, along with WordPerfect, until months after the launch of Windows 95.”
Rewind to 1995. At the time, The VAR Guy spent considerable time speaking with Novell insiders. And multiple times, Novell insiders told The VAR Guy that Novell started developing its desktop software suite too late for Windows 95. The result: WordPerfect and PerfectOffice went down in flames while Microsoft Office 95 for Windows 95 became the industry standard. Novell acquired WordPerfect for $1.4 billion in 1994 and sold the business to Corel for $145 million in 1996. Ouch.
Microsoft certainly wasn’t Novell’s friend in the 1990s. Perhaps Microsoft made some anti-competitive moves vs. Novell — frankly, The VAR Guy isn’t sure. But ultimately, Novell’s worst enemy in the 1990s was, um, Novell itself. Multiple acquisitions led to products that bombed (DR-DOS, AppWare, UnixWare, WordPerfect PerfectOffice, etc.). At the same time, Microsoft’s Windows NT Server destroyed Novell’s NetWare cash cow. Game over.
Ironically, Microsoft and Novell — now owned by Attachmate — have partnered on numerous fronts since the 1990s. A Microsoft-Novell partnership involving Windows Server and Linux was recently extended to Attachmate’s SUSE business, which was organized into its own group after Attachmate purchased Novell.
Admittedly, The VAR Guy isn’t a legal expert. The Novell vs. Microsoft court case is situated in Utah, where Novell originally built its business. Perhaps the jury could be a home team crowd for Novell. But The VAR Guy suspects Microsoft will wind up beating Novell, yet again, because WordPerfect was under duress before Novell even entered the picture.