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EN PASSANT: The Internet optimist

EN PASSANT: The Internet optimist

Eric Schmidt is trying to remember what he did last week. Straight off a plane from Tokyo, he's sitting stiffly on the edge of a couch at his hotel in Salt Lake City, Utah. Despite the laborious flight, Schmidt is impeccably groomed. His navy-blue pinstriped suit looks as if it's just been pressed, and as always he wears the beginnings of a smile that is inflected with just a touch of menace.

Glancing at the rote furnishings of the hotel, Schmidt reminds himself out loud that if today is Monday, he must be in Salt Lake. So last Monday, he recalls, he was in Asia. Tuesday and Wednesday he was doing Europe. Thursday, Friday and Saturday were spent to-and-froing across the US. And Sunday, was a day in the office preparing for the week-long convention in Salt Lake that attracts 7000 Novell customers, partners and press.

So goes the life of a globetrotting CEO of the world's number two software house.

Shaking that ‘number two' ticket has been Schmidt's dogged quest since joining Novell four years ago. He took the reins and relentlessly rode it back into the software race, realising the operating system race had already been won by Microsoft and turning his attention instead to the world of e-business. He sought to replace LANs with a single network:, the Net. Under his leadership, the company has completed a corporate turnaround following a disastrous and very costly strategy to challenge Microsoft in business productivity applications. Beating Microsoft is unarguably "the cigar" and even Schmidt's shift to the role of chairman is a quiet strategy to achieve this by keeping his eye on the big picture. "I like to talk about evangelism and strategy, but you'll still have me to kick around," Schmidt says of his decision to hand over to Jack Messman, CEO of recently acquired consulting firm Cambridge Technologies. "Don't worry, I won't be as obnoxious as chairman Bill [Gates]," he adds.

To this day, people are a little puzzled about Schmidt's instatement in the role, for a variety of reasons. He came from Sun Microsystems with no heavy-duty management experience and was suddenly responsible for the whole ball of wax - from corporate downsizing to the vision thing.

At the time, reactions ranged from surprise to bafflement. "He's an interesting choice," ventured one industry watcher at the time. "Brainy, good contacts, high industry profile. But he could have found a cushier job, say, as PR spokesman for Saddam Hussein."

"He's a great guy, don't get me wrong," chips in Dan Warmenhoven, CEO of Network Appliance and Schmidt's fellow collegiate. "But he's a technology buff. I don't know that he's the guy they need to be running the show." Even his old boss, Sun Microsystems CEO Scott McNealy, remains bemused. "I never understood why he left the best job on the planet,'' McNealy says, referring to Schmidt's _14-year stint as Sun's chief technology officer. Wall Street on the other hand, applauded Schmidt's appointment, driving up Novell shares 22 per cent within a few days.

Why Schmidt thought Novell was worth risking health and reputation remains a mystery. After all, this was a company mismanaged into a near death spiral by its long-time boss Ray Noorda. Living in his bizzaro world, Noorda fiddled around with ill-considered forays into spreadsheets and word processing software while Microsoft was improving its NT network software. Bob Frankenberg, Noorda's amiable successor, sold off Novell's ill-considered acquisitions, but he too failed to staunch the red ink or the erosion in the company's share of the network operating system market. This was a company plagued by poor planning and undependable product cycles, just hanging on to 57 per cent of the corporate network market. Worst of all, the company was a virtual no-show on the biggest network of them all, the Internet.

But lo and behold, Schmidt successfully chiselled the rust off the system. New products got completed on time with their features. The old way of doing things got chucked and researchers who created new technologies were charged with shepherding their projects through the development process until they reached market. Most of all Schmidt altered the way Novell thought, making it more Internet-centric and less a Microsoft competitor. This techno-visionary seemed to be just what the doctor ordered.

So passionate is Schmidt about the Novell brand that I can't decide whether he's a true believer or a very convincing actor. But one thing is for sure, when it comes to technical gibber there is no fooling this guy. He has engulfed himself in the nuts and bolts of technology for the past 20 years, including stints at Xerox PARC, Bell Labs, before landing at Sun where his most-recognised accomplishment was pushing Java to a winning position. He holds a PhD in computer science and a master's degree in electrical engineering from the University of California at Berkeley, in addition to a bachelor's degree in electrical engineering from Princeton. This veteran knowledge has earned Novell a great deal of loyalty in techie circles. "The reason I like Novell is because Schmidt has [the qualifications], he knows what he's talking about," says the CIO of Novell _customer, Arnotts.

However, Schmidt's devotion to vision (whatever it may be at the time) has often been interpreted as blindness. The market was never quite comfortable with a personality that shrugs off poor share prices and revenue downturns with a patient que será será attitude. "The man is stubborn and proud," says one technology analyst. "Mostly, Schmidt is an Internet optimist, one who is clearly excited by the promise of an always-on, readily available broadband network. But it's time for him to deliver the goods."

Schmidt was shaken from his implacable perch last year as Novell's stocks plummeted, revenues bottomed out and the company laid off 18 per cent of its workforce. He wore the beating bravely, choosing not to hide the expected shortfall, and giving it the public nick-name "the kitchen-sink quarter". Still, the extent of Novell's problems surprised him and Schmidt admitted later that had he known the extent of the damage he would not have taken it on. But, the fact remains he did.

The market is undecided as to whether "one net" is a light or a train at the end of the tunnel and at the end of the day, it may take five years before the full extent of Schmidt's legacy is realised. If he fails, he will simply join the queue of Novell shoulda-coulda-woulda's. But if he succeeds, he will be nothing short of a corporate hero.


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