Novell changes CEOs but says strategy is right

New Novell chief Ron Hovsepian plans to focus on improved execution of existing plans

Hovsepian: no change of plan

Novell’s board has decided to change chief executives again with Jack Messman making way for current president Ron Hovsepian. However, the firm insists it remains on the right track and has no major changes of direction planned.

Messman, a long-time director of the company, rejoined Novell full-time with the acquisition of Cambridge Technology Partners in 2001 and became Novell chief executive with the completion of that deal. He replaced Eric Schmidt, now of Google.

In his five years in charge at Novell, Messman was responsible for strategic moves into consulting services and open-source software, most notably through the acquisition of Suse in 2003.

He also approved the decision to create a single product called Open Enterprise Server (OES) from NetWare – the program that made Novell the most powerful force in networking software in the 1980s – and Suse Linux Enterprise Server.

A Novell statement said that a switch in leadership was intended to “accelerate the execution of our growth strategy and build value for shareholders”.

In a conference call the firm also stated that there are no accounting or other improprieties.

Analysts have recently been critical of Messman and Novell stock dropped sharply at the beginning of this month, perhaps accelerating his departure.

Novell also said its chief financial officer, Joseph Tibbetts, would leave the firm and announced a new non-executive chairman, Thomas Plaskett.

Hovsepian joined Novell in 2003 after 17 years at IBM and has long been regarded as the CEO-in-waiting at the firm.

However, in a conference call, Hovsepian said his plans for the company did not involve any significant new directions.

Hovsepian said he wants to improve the way maintenance is handled, for example through a web-based centre where customers can more easily renew agreements. “There’ll be more of a self-service approach,” he added. Also, Hovsepian said he will pursue increased simplicity through a reduced number of pricing systems.

Although buying companies will still be a part of Novell’s plans, the underlying strategy is sound, Hovsepian added, suggesting that customers are moving from edge servers to enterprise servers running Linux. A release of OES due in July will also add virtualisation and migration tools to encourage switches from Unix or older server versions of Windows. Desktop Linux interest is also encouraging, he said.

Other sectors where Novell participates, such as identity management and resource management, also continue to grow, Hovsepian said.

The changes could act as a prelude to a sale of Novell to another firm. Oracle chief executive Larry Ellison recently said that his firm could make a move into owning a Linux distribution and had considered buying Novell.

In a Financial Times interview two months ago, Ellison said, “I’d like to have a complete stack. We’re missing an operating system. You could argue that it makes a lot of sense for us to look at distributing and supporting Linux.”

A year earlier, in an April 2004 interview with VNUnet, Messman himself appeared to give some credibility to the idea, saying: “With software vendors [a takeover of Novell] is possible but we're one of the largest. Maybe Larry Ellison would come after us, but [Oracle is] more an application software than infrastructure software company.”