Unix System Laboratories

AT&T announced the creation of the UNIX Software Operation (USO) – a separate and distinct AT&T business unit responsible for the development, marketing, and licensing of UNIX System V software – in January 1989. This was done, as a subsequent press release stated, "in order to separate AT&T's UNIX System source code business from its computer systems business," the latter a reference to AT&T Computer Systems. USO included the AT&T Data Systems Group organizations responsible for UNIX product planning and management, licensing, and marketing. Peter J. Weinberger was named chief scientist of USO while also retaining his job in the computing science research center at Bell Labs; no other Bell Labs assets were transferred to USO. The head of USO was Larry Dooling, who had been a vice-president in sales and marketing in the AT&T Data Systems Group.

Unlike the original Unix work, which had been done in the Bell Labs facility in Murray Hill, USO and the commercialization work was done a few miles away in Summit, New Jersey. This AT&T Bell Labs location was known as SF for Summit Facility.

UNIX System Laboratories, Inc., came into being as a separate subsidiary of AT&T in November 1989 and was assigned all U.S.-based AT&T Unix and USO assets.

However USO continued to operate as USO until June 1990, when the reincorporation of AT&T's European and Asian Unix business operations as wholly owned subsidiaries of USL was completed. At that point the UNIX Software Operation was publicly rebranded as UNIX System Laboratories.

Again, a point of emphasis was to separate the Unix-based business from AT&T's hardware-based business. The subsidiaries were known as UNIX System Laboratories Europe, Ltd., sited near Ealing Broadway in London, and UNIX System Laboratories Pacific, Ltd., located in Shiba, Tokyo.

Dooling was named the initial president of USL, continuing from his position at USO.

These organizational changes were taking place in the context of the open systems movement and the ongoing Unix wars. In consequence, the pro-AT&T side Unix International (as opposed to the anti-AT&T side Open Software Foundation) declared that "In the last 18 months AT&T has made good on its commitment to treat UNIX System as the industry asset it is and to open the UNIX System V development process to the entire industry."

Another unit within USL, called the Open Solutions Software business unit and headed by Joel A. Appelbaum, was responsible for other system software that in some way worked in conjunction with Unix.

The Tuxedo transaction processing middleware had also been transferred from elsewhere in AT&T to USL. It had originated as the Loop Maintenance Operations System (LMOS) followed by the Unix Transaction System (UNITS) and was used for projects internally within AT&T. It was then renamed by USL and, as Release 4.0 of what was now called Tuxedo, in 1989 was offered for the first time as a commercial product.

USL also developed and marketed the OSI Communications Platform, which was an implementation of the OSI protocols for Unix-based networking.

On December 21, 1992, it was announced that Novell would acquire Unix System Laboratories, and all of its Unix assets, including all copyrights, trademarks, and licensing contracts, for some $335 million in stock. The news led to large headlines of the "NOVELL BUYS UNIX" variety.

The measure was intended to help Novell compete against Microsoft, which was on the verge of including networking as a built-in feature of Windows in conjunction with the Windows NT server. It was also an outgrowth of Novell chief Ray Noorda's theories about coopetition in a technology industry.

The move seemed like a long shot to analysts, with a commentary piece in Computerworld outlining the obstacles to success and stating, "Saying this deal has the technical potential to counter Windows NT is very different from predicting that it will do so."

There was negative reaction to the acquisition from USL shareholders, USL employees, and members of Unix International. Noorda had to emphasize that Novell had no plans to move USL operations from New Jersey to Utah, where Novell was based. And Noorda and Pieper had to travel to Japan to reassure USL shareholders and investors there.