Novell users unfazed by Messman's ouster

Novell's decision to replace CEO Jack Messman with Ron Hovsepian may have been sudden, but it didn't shock many Novell customers and observers, who were unequivocal in praising Hovsepian's ascension. Until Thursday, Hovsepian had served as Novell's president and chief operating officer.

"I'm not really surprised. Ron is a much more dynamic individual than Jack," said Brent Biernat, assistant vice president for network services at COCC, a provider of technology services to banks. COCC has been a Novell customer for a decade, and three years ago, it moved more than 60 servers to SUSE Enterprise Linux.

Biernat said he has met Hovsepian, a longtime IBM executive who joined Novell in 2003, five times. "He had no qualms about getting on the corporate jet and flying out to meet us customers. He was very, very engaged. Jack sometimes seemed pained to have a conversation. No offense to Jack, but I'm surprised he made it as long as he did."

Messman, 66, took over the Waltham-based business software vendor from current Google CEO Eric Schmidt in 2001 after the consulting firm he ran, Cambridge Technology Partners, was bought by Novell. The remnants of that acquisition, Novell's Celerant Consulting unit, was sold off last month.

Messman, who has been a Novell director since 1985, oversaw Novell's painful move away from a reliance on its once-dominant NetWare operating system to an embrace of open-source and Linux technologies.

The beginning of that turnaround strategy, however, was largely credited to Vice Chairman Chris Stone, Messman's second-in-command who was widely considered to be his heir apparent before he left Novell in November 2004.

Stone, who is now CEO of data consolidation vendor StreamServe called the board's action "long overdue."

"I think quite honestly that justice prevails," he said. "I hope Hovsepian can turn it around fast. For the sake of the employees, it has to happen. They deserve something to happen quickly, however radical it might be. I'm pretty excited about it."

So was Wall Street: Novell's shares, which were near a 52-week low, were up 9 percent in trading for the day.

While financially solid, Novell has only been able to eke out small profits recently by cost-cutting -- sales have continued to decline. Novell has not been able to significantly increase its share of the Linux server market dominated by Red Hat and has only had partial success stemming the tide of NetWare defections.

"Novell has good technology but next to no go-to-market strategy," said Michael Goulde, an analyst at Forrester Research Inc. in Cambridge, Mass. "I think that Ron Hovsepian's a good person to possibly put that in place."

Analysts said that unlike Schmidt's earlier departure, Messman's will result in minimal disruption. Hovsepian, 45, was promoted to president and COO in November and has "essentially been running things" at Novell since that time, according to Gordon Haff, an analyst at Illuminata.

"[Hovsepian] has a stronger operational background," said Stacey Quandt, an analyst at Boston-based Aberdeen Group. That ought to bode well for users unhappy with Novell's recent inability to execute, she said.

"They get you excited by telling you what the vaporware is," said Rudy Ebisch, systems technical support director at printer and copier vendor Canon USA. Canon uses NetWare, SUSE Linux and other Novell products. "Tell me what you're doing, not what you are going to do. If they deliver, it will be great. We're not going anywhere."

"Novell is not Microsoft; they don't have the capital resources to support so many products," Biernat said. "They are going to have make some hard decisions that will likely make some customers unhappy."

"They should probably consider dropping their e-mail and collaboration suite [GroupWise]. It's not competitive anymore," said one CTO at a large nonprofit health care provider, which uses SUSE Enterprise Linux as well as Novell's identity management products. "But I'd like to see them move more aggressively into supporting the open-source application stack, such as a database or an application server. And they should take advantage of their experience and depth of customer support. Red Hat has never impressed us with their support." The executive requested anonymity.

"It's within them [Novell] to fix it," said Haff. "This is not about having big ideas and new directions. They have put together a strategy. It seems like a reasonable strategy, and now it's about making it work."

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