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How to Save Your Neck in a Four Easy Steps

Posted by: Sarah Lacy on November 1, 2005

Say what you will about Novell CEO Jack Messman— and believe me, many people are these days— he’s no dummy. Maybe it’s for the good of Novell or maybe just to save his own neck, but since early September when Blum Capital and Credit Suisse First Boston went public with their gripes that the former railroad exec was fumbling Novell’s golden opportunity to be the Red Hat challenger, he has been making big conciliatory moves fast.

First there was a whole new Messman at Novell’s annual BrainShare conference. Analysts said he was more open and cooperative than they’d ever seen him. I did a story on Novell for BusinessWeek, and the often-prickly Messman gave me a lot of time, opened up, and answered some tough questions. Then, there was a $200 million share repurchase and an open letter to Blum’s shareholders saying that he was planning on cutting costs and divesting its non-core consulting business, just as they suggested. Making good on that, big layoffs should be coming any day now to the tune of 20%—-much bigger than anyone had expected before our October story. We’ll soon see if our insiders were right.

In the mean time, Novell has made another consolation. It promoted Ron Hovsepian former executive vice president of worldwide sales to COO and president today. This is Hovsepian's second promotion this year and a very symbolic move. For one thing, Wall Street loves him. Detractors see him as the only member of Novell’s management team who has an aggressive, go-for-the-jugular style that can go toe-to-toe with the hard charging Red Hat. He’s largely credited for a massive overhaul of Novell’s North American sales force from a lazy one contented to make the rounds picking up maintenance checks to one that’s increasingly beating the bushes looking for new customers. Says one insider, Hovsepian is 100% focused on what will make money, and little else survives under his “withering glare.” It’s a discipline the bloated Novell has needed, and if the layoffs are as big as some expect, he’s probably a big force behind it.

But what makes the promotion all the more impressive is that Hovsepian is hardly a yes-man for Messman. While both praised one another when I interviewed them a few weeks ago, several insiders said the two frequently clash.

If Hovsepian continues to get credit for what goes right at Novell, it will be interesting to see how long the arrangement lasts. It’s reminiscent of Messman’s confrontational relationship with former Novell vice chairman Chris Stone who was forced out in 2004. Stone was often credited as the author of Novell’s Linux strategy, and insiders say that irked Messman. When I interviewed him, I asked a lot of tough questions. And the only thing to get a rise out of him was the idea that Stone authored the Linux strategy. “Chris was a great personal PR guy,” he said.

Far from ancient history, Messman’s detractors have cited Stone’s departure again and again as a sign that Messman won’t share the top spot. Perhaps this is a symbolic move to prove otherwise.

Reader Comments

C Lyle

November 3, 2005 11:09 AM

Novell needs to get its act together before it pulls SUSE into the same pit its NetWare and GroupWise products fell into long ago. When the market is obviously moving elsewhere (say, like, Open Source) they keep running in circles around their old products. Maybe praying for rain or a miracle to resurrect the moribund products. Maybe Blum, CSLB, and the others will trim the fat and let SUSE go back to a growing line.

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Bloomberg Businessweek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, and Douglas MacMillan, dig behind the headlines to analyze what’s really happening throughout the world of technology. Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.



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