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Novell Businesses

Novell Under Pressure From Investors 214

Posted by CowboyNeal from the hard-times dept.
UltimaGuy writes "The pressure is growing on Novell Inc's management to make major strategic changes after a regulatory filing revealed a Novell shareholder has joined Credit Suisse First Boston in calling for change at the identity management and Linux vendor. The steps proposed by the investment firm include cutting costs by targeting Novell's two corporate jets, its 'overstaffed' R&D department, legacy products, and its 400 NetWare engineers, as well as selling non-core businesses to enable funds to be redeployed."
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Novell Under Pressure From Investors More

Novell Under Pressure From Investors

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  • Sun Could Possibly Buy Novell? (Score:5, Interesting)

    by jg21 ( 677801 ) on Friday September 16, 2005 @06:55AM (#13574778)
    Maybe there's truth in the notion then that Sun might buy Novell. If it doesn't buy Red Hat [sys-con.com] first, as Mark Hinkle here seems to think it might.

    • Re:Sun Could Possibly Buy Novell? (Score:4, Insightful)

      by MoralHazard ( 447833 ) on Friday September 16, 2005 @07:04AM (#13574826)
      How does that relate to the issue of shareholders pressuring Novell to shape up? I didn't see anything in the article talking about a buyout happening anytime soon. Can you explain where you make that connection?

      I mean, sure, it's possible in the future that they might get bought, but Novell is talking about a 2+ year plan to reshape themselves... Not exactly sounding like "sale", there.

      What kind of time frame are you talking about, anyway?

      • Re:Sun Could Possibly Buy Novell? (Score:4, Informative)

        by jg21 ( 677801 ) on Friday September 16, 2005 @07:09AM (#13574848)
        It dates back to a Marrill Lynch report last year that The Reg [theregister.co.uk] reported on, calling for Sun Microsystems to acquire either Red Hat or Novell in order to get themselves taken seriously in the Linux server market. The impetus would be coming from Sun, then, not necessarily from Novell itself. Does that make a bit more sense?
      • Being taken over is nearly always good for stockholders in the takeover target, as the acquiring company usually pays significantly more than the the market value of the stock. So it's possible that one of the options they're exploring is putting the company up for sale.

        Takeovers are bad for nearly everyone else, of course. Sun buying Novell would be particularly bad, as Sun is less Linux-friendly and the OS market isn't exactly very competitive. But the stokcholders aren't concerned about that.

  • Overstaffed R&D (Score:4, Insightful)

    by aapold ( 753705 ) on Friday September 16, 2005 @06:57AM (#13574786) Homepage Journal
    I guess it just doesn't pay to do your own research these days.

    • Re:Overstaffed R&D (Score:5, Insightful)

      by Anonymous Coward on Friday September 16, 2005 @07:00AM (#13574806)
      That depends on whether you're looking at it from the perspective of a greedy money grabbing investor (share-holder value and all that), or someone who enjoys doing a job well.

      • I hope Trolltech [linuxdevices.com] keeps this in mind and backs off on both considering an IPO and hiring MS staff to the board.

        Once you go public, the company is burdened with a need to focus on short term advantages at the cost of long term development. Quarterly or monthly balances take precedence over longer term plans unfortunately, even if the longer term plans would net more profit.

        • Once you go public, the company is burdened with a need to focus on short term advantages at the cost of long term development. Quarterly or monthly balances take precedence over longer term plans unfortunately, even if the longer term plans would net more profit.

          I agree. What happens is that you get stuck between two groups of people: customers and shareholders. Things that shareholders think are in their best interest aren't always in their best interest.

          A good sized R&D budget is absolutely critica

    • Re:Overstaffed R&D (Score:2, Insightful)

      by madman101 ( 571954 )
      Not when one of your basic products is given away free. Novell isn't like IBM where the goal is moving hardware.

      • Comment removed (Score:5, Insightful)

        by account_deleted ( 4530225 ) on Friday September 16, 2005 @07:32AM (#13574967)
        Comment removed based on user account deletion

        • Re:Overstaffed R&D (Score:4, Insightful)

          by Brunellus ( 875635 ) on Friday September 16, 2005 @08:48AM (#13575454) Homepage

          R&D is something you can't skim on, and HP found that out hopefully.

          Wishful thinking. R&D pays off long after the investors have sold off their shares; so the investors really don't give a fig about R&D that doesn't bear immediate, marketable fruit.

          • This is being argued in a few of my classes as the primary weakness of capitalism. Is there anyone anywhere addressing this in a manner that could bear fruit? R&D has become just D, and the D needs to "bear immediate, marketable fruit." Hence, Toyota's 10 years developing hybrid cars vs. GM's...what? I'm not trolling, I really would like to see suggestions. The US won't ever (I don't think) adopt japan's state directed industry model ("government intervention = market inefficency"). Nor does the e

        • Re:Overstaffed R&D (Score:4, Informative)

          by stevesliva ( 648202 ) on Friday September 16, 2005 @09:00AM (#13575528) Journal
          You're pretty far off base on the claim that IBM doesn't make money on anything physical. Sure, it may not be anything close to "most" of IBM's revenue, but IBM's hardware revenue for a single quarter is larger than Novell's market cap. Even after the sale of the PC division, it still had $5.5 billion in hardware revenue for the 2nd quarter with higher margins than the $12 billion in services revenue. link. [ibm.com]

        • Re:Overstaffed R&D (Score:3, Insightful)

          by sgtrock ( 191182 )
          Um, not to be too pedantic or anything, but IBM still makes a fleetload of money on selling mainframe hardware.

          (Yes, I know, they now make far more on support, services, and software licenses. They /still/ have a profitable hardware division, though.)

          fleetload == many many boatloads. :)

      • Re:Overstaffed R&D (Score:2, Insightful)

        by Trigun ( 685027 )
        No, and Novell's goal isn't to go out of business either. They made a few choice acquisitions, then went into an R&D cycle, and are now going into their sales cycle. Unfortunately the stock traders wanted it to happen faster.

        Novell is doing great things for linux. Their integrators are second to none, and soon you'll see tools from both Novell and Red Hat that shape the linux server and desktop market. Novell's Hula project (thanks to whoever posted that link in the Groupware roundup), Red Hat's dir
        • >then went into an R&D cycle

          What R&D cycle?
          It's assembling a distro from GPL code, for Christ.
          How many R&D staff did SuSE have before they sold out? Probably like 100 or so. How many non-Linux developers Novell has now? Probably several thousand.

          >Unfortunately the stock traders wanted it to happen faster.

          Pleeeese - they had a great OS (SLES8) for multiple CPU archs to begin with, and what did they do?
          They chose to SIT (not "shit") on it and wait for almost a year until SLES9 was out so tha
    • I guess it just doesn't pay to do your own research these days.
      Then obviously we need stronger IP laws! (ducks)

  • While I can possibly see... (Score:5, Insightful)

    by cnelzie ( 451984 ) on Friday September 16, 2005 @06:57AM (#13574788) Homepage
    ...cutting costs by eliminating Corporate Jet Expenses, a technology company shouldn't be cutting its R&D Department because some MBA Holding Investment Firm thinks it is overstaffed.

        Granted, if the firm discovered that 80% of the R&D staff isn't actually doing anything outside of playing QuakeIII or something, then yeah, they should be cut, a little...

    • Re:While I can possibly see... (Score:5, Insightful)

      by jmcmunn ( 307798 ) on Friday September 16, 2005 @07:03AM (#13574821)

      I completely agree. They are never going to release an innovative product for the future if they fire the engineers and cut R&D. Corporate jets, however, are simply not necessary in a world where anyone can be across the country on a commercial airline at the drop of a hat. They could even (gasp) fly coach to save money like the rest of us.
      • Not to to sound like I'm defending the idea of having two corporate jets, but keep in mind that the real value/purpose of a corporate jet is not to fly around your own executives - it's for your big clients! Do you really expect to get multi-million dollar contracts if you flying the client over coach?
        • No you dont, but its a hell of a lot cheaper to hire a Boeing Business Jet or an Airbus Executive Jet or even something smaller as and when you need it, rather than paying for the fulltime upkeep of two aircraft, which cost money even when they are sat in a hanger somewhere doing nothing. Unless you fly that aircraft every day on paying routes, its simply bad business to maintain a fleet of any size.
          • Actually, some companies DO make money on their corporate jets, by renting them to other companies for executive flights.

            I don't know if Novell's jets are fully paid-for (however, Novell says it has "zero debt" so they may be) but if so, their upkeep may cost considerably less than a half-dozen executive tickets every month, at a couple grand apiece. You don't hire your own mechanic for that, you know -- you use the company (or one of several at a big airport) that does maintenance for private craft at your
      • maybe you missed it, but mechanics are striking and major airlines are going bankrupt left and right. i'd rather have a corporate jet or two that I pay mechanics well to make sure I dont fall out of the sky.

        quite frankly, if I were novel, id give said investor the finger for trying to decimate R&D.
      • You don't even need to got to that extreme.

        You can own a partial interest in a jet, get much of the benefit of having your own jet while paying significantly less for it.

        This is something that is cheap enough for individuals, nevermind corporations.
    • True. I just hope people realize when companies are pressured to do things by 'shareholders' its usually by only a few that hold $$$ worth of shares. And usually they are part of the company's management.
    • The investors obviously looked at the "success" of HP's gutting their R&D Dept. and decided that Novell should emulate HP.

      Methinks it's time for more companies to consider going back to being privately held (as Corel did), so as not to be at the mercy of investors who can't see beyond today's bottom line.

  • I hope they don't... (Score:3, Funny)

    by astrashe ( 7452 ) on Friday September 16, 2005 @06:59AM (#13574802) Journal
    I hope they don't keep the planes and fire the R&D people. But that's sort of what I expect they'll do.

  • Why does it have to happen...... (Score:5, Insightful)

    by amodm ( 876842 ) on Friday September 16, 2005 @06:59AM (#13574803)
    that investment firms and R&D don't go together well......

    I know that not everyone in R&D is a brilliant scientist, but in the long run, its the R&D that helps the industry move forward

    On a side note however, anything worthwhile coming out of Novell's R&D these days ?
    • I think the current trend is let little companies do R&D and survive or not. If they do well buy them out.

      Of course what ends up happening after they buy out is like picking a flower, it tends to kill what once made it bloom in the first place.
    • If you look at all the proposals in that article, none of them are really for Novell's benefit. A $500M share repurchase program would push the share prices up, while depleting Novell's cash. Divesting their divisions would largely hurt the company's integration between their products. But again, it would raise money for the company, and bolster the stock prices.

      The entire "proposal" seems to me is an attempt bump the stock price up so they can sell off. I seriously doubt they have the best interests

  • "its 'overstaffed' R&D department?" (Score:5, Insightful)

    by starseeker ( 141897 ) * on Friday September 16, 2005 @07:00AM (#13574810) Homepage
    I don't know about Novell, so perhaps they do have too many people, but I must say I'm rather alarmed the article mentions R&D being overstaffed and no other department. Most companies don't go all out hiring R&D folks to begin with - that's one of the things that makes Google so unusual - so they don't tend to be overstocked in R&D in the first place. I wonder if this fits in with the recent trend in corporate America to view R&D as a luxury and money sinkhole. Since the benefits don't show up next quarter, chop them off to look better in short term costs. Never mind five or ten years down the road when you need new products to stay competitive and don't have any.

    Does ANYBODY in the US think long term anymore and still have influence in corporate or government circles? Maybe they're all thinking that if everybody else is also dumping R&D, everyone will still be competitive, and it will only be the consumer that gets stuck with static technology and gradually decreasing quality. (Price wars with no quality differential do that, since consumers tend to be bad in the short term at distinguishing good products from bad.)

    • Re:"its 'overstaffed' R&D department?" (Score:5, Insightful)

      by erroneus ( 253617 ) on Friday September 16, 2005 @07:14AM (#13574870) Homepage
      Current trends seem to indicate that R&D is best "procured" rather than done in-house. This can be accomplished in a variety of ways, but mostly, they just buy the small companies and individuals that make cool new stuff and call it their own. Kinda sucks how parasitic the corporate worlds have become.
      • It's more pernicious than that, even, when looked at directly:

        Company A slashes its research budget. Stock price rises in response.

        Two researchers bootstrap a new research effort and eventually win venture capital. No longer in control of the enterprise due to the need for greater capital for their effort, it begins to bear fruit.

        Company A comes back in, and "buys" the startup from the venture capitalists with their inflated stock.

        As you can see, in this admittedly terse example, the financiers win in every sense of the word here. The researchers are forced into a fight-or-starve mode, and they do not get much overall benefit from their research. "On the books", however, it's a win-win scenario: for the original company, and the intermediary financiers (the VCs).

        • Re: (Score:3, Insightful)

          by account_deleted ( 4530225 )
          Comment removed based on user account deletion
        • And looking at the prices some companies are paying to acquire other companies, many of which then go entirely to waste (even if they weren't bought for the express purpose of killing them), it occurs to me that over the long term, it is probably more cost-effective to have your own in-house R&D.

          But that benefits neither today's shareholders nor tomorrow's speculators. -- What happened to benefiting your customers for today, tomorrow, and the future, so as to have a steady and predictable income??

          As I m
      • Kinda sucks how parasitic the corporate worlds have become.

        I work in R&D (actually, in D) at a Huge Corporation that prides itself on having a large internal research effort and ridicules competitors who in-license most of their stuff.

        But, really -- beyond bragging rights, who cares? It's not obvious to me why giving money to inventive people after they make something is so much more shameful than giving it to them while they make something.

      • This system also means that a talented researcher can go start a company, develop an innovative product(s) and then sell the company. The entrepreneur should make far more money this way than working as a researcher their whole life. Capitalism works!
      • Kinda sucks how parasitic the corporate worlds have become.

        So instead of being paid salaries, the brilliant researchers get chunks of startups that get bought out. Yeah, it sucks to be a researcher!

        Big companies have always been parasites, but being the "host organisms" isn't so bad. Lather, rinse, repeat.

    • Because slashdot hates corps doing R&D (Score:4, Insightful)

      by ScentCone ( 795499 ) on Friday September 16, 2005 @07:31AM (#13574965)
      Or at least, article summaries that completely miss the point [slashdot.org] about true R&D costs get a lot of screen time. When large companies engage in expensive R&D, they cover those costs by (gasp!) charging people for their products. True for new AMD chips, true for super-duper antibiotics, and true (however indirectly, and not obvious to a lot of people) for Google, too.

      Does ANYBODY in the US think long term anymore and still have influence in corporate or government circles?

      I think the better question is, do many companies still have the balls to explain to their customers why fancy new products cost what they cost? And, does the nitwitted consuming end of the culture, so saturated with the pernicious concept that every company charging them for a product or service is "evil," still have the intellectual honesty to look at the larger picture? Calling it like it is has become so unfashionable that we're just sinking in a swamp of mediocrity (or trying to, it seems) rather than teaching basic economics in grade school, where what's left of critical thinking might still be salvaged. By the time people become consumers and investors, they're so disconnected from causal relationships that they can't connect the dots between investment, innovation, time, risk, and cool new technologies.
      • The Chinese have developed some really slick solutions to this problem:

        A. Reverse engineer products developed at great expense by Western companies and then undersell them at a fraction of the price because you don't have any R&D expense and your labor is cheaper. Reverse engineering costs something but nothing compared to what original R&D costs.

        B. Place conditions on Western business who want access to your markets that they transfer manufacturering and R&D to China and employ Chinese workers

    • Re:"its 'overstaffed' R&D department?" (Score:5, Informative)

      by fungai ( 133594 ) on Friday September 16, 2005 @08:21AM (#13575255)
      Cutting costs to satisfy short term profit/cash flow to the detrement of long term profits is a management strategy called harvesting [marketingpower.com]. It's usually a sign of a company in serious decline. Now you know where HP's heading.
    • Does ANYBODY in the US think long term anymore...

      To be perfectly fiar, it's not 'poeple in the US'; it's investment banking firms in the US.

      "Best Idiot Making I"
    • Never mind five or ten years down the road when you need new products to stay competitive and don't have any.

      then, you just buy your "bloated" competitor, sell their preoducts, and lay off their R&D, and open a call-center in Pune. When the execs are fat on inflated stock options, and sales start to decline again, buy another competitor. Repeat until you're a monopoly.
    • R&D and Marketing are usually the first one to go when companies are in trouble... Ironically, these two are the most important in most organizations yet cutting them is more common than cutting SGA or management pay/perks...

  • Public company must do the best for shareholders.. (Score:3, Informative)

    by Pecisk ( 688001 ) on Friday September 16, 2005 @07:01AM (#13574811)
    ...news at eleven. I actually RTFA and yeah, there are some issues about management, but is more like communication problem between shareholders and management, and I guess it will be soon cleared out.

    I repeat, it is NOT about finansial problems in Novell, they have some loss, but they are doing quite fine in large perspective.

  • Cut through the BS (Score:5, Interesting)

    by bigtallmofo ( 695287 ) on Friday September 16, 2005 @07:01AM (#13574815)
    targeting Novell's two corporate jets, its "overstaffed" R&D department

    I wonder by cutting its overstaffed R&D department if they really just mean move them all to China? [infoworld.com]

    I guess the execs will need those corporate jets to fly back and forth to China in style so they can visit their lower-paid works occasionally.

  • The slashdot angle (Score:5, Interesting)

    by bfree ( 113420 ) on Friday September 16, 2005 @07:03AM (#13574820)
    From the article (emphasis mine):

    The investment firm (Blum) has also called on Novell to increase its investment in Linux and open source software through partnerships and acquisitions to move "further up the stack".

    Blum's proposal is broadly similar to CSFB analyst Jason Maynard's suggestion that Novell should focus on software services rather than consulting, increase its emphasis on open source software, and repurchase company stock

    So at least the pressue isn't on for them to dump Suse/Linux which was my initial fear on reading the slashdot post. In fact if anything they aree being encouraged to place more focus on it showing even these (presumably) hardened business types can finally see the long term value in FOSS.

  • Overstaffed R&D? (Score:4, Interesting)

    by erroneus ( 253617 ) on Friday September 16, 2005 @07:08AM (#13574840) Homepage
    Novell is still in a changing state in finding itself again. Microsoft's taking over the server market has left Novell perpetually staggering. While Novell still has a server stake and their stake is being re-situated on a Linux base, they need to apply all they can on R&D in order to get themselves wedged into the desktop market. For shops that are already Novell, adopting a strong and maintainable desktop environment based on Linux would be less difficult that convincing an all-Microsoft shop. They have a foot in the door but they need to apply a lot more R&D to make another step.

    These damned short-sighted share-holders, while on the short term build captial and value in a company, seem to be the long-term downfall of creativity and improvement. (Not to mention the driving influence in removing ethics from business practices to the point of criminal acts.)
    • When I was at the latest Novell seminar, they brought up the point that they already have over 90% of the non-x86 server market. They acquired SuSE with the intent of expanding their share in the x86 market (which as you say, they've lost most of what once they had to Windows).

      They also mentioned that they have a billion in cash on hand, and no debt. So Novell isn't hurting, tho it sounds like certain shareholders want to change that. :/

  • F/OSS, meet Wall Street (Score:4, Insightful)

    by Anonymous Coward on Friday September 16, 2005 @07:09AM (#13574845)
    I can't imagine two more disparate mindsets. There is no way Wall Street's greed and F/OSS's idealism can be simultaneously realized. If the managers at Novell had any spine, they'd tell Wall Street to take a hike, and instead worry about running the business. You can have a healthy profitable business without being obsessed with the cancer of promising ever-increasing returns to investers. If Novell wants to survive, they should go private, focus on making their customers happy, accept reasonable pay for their work, and not feel inadequate for lack of achieving world domination. Or they could do what every other Wall Street whore does, promise the impossible, sacrifice quality an people's lives in the process, build a lot of sand castles, and ultimately add nothing of permanant value to the world.

  • 400 NetWare engineers?? (Score:5, Insightful)

    by Spy Handler ( 822350 ) on Friday September 16, 2005 @07:09AM (#13574846) Homepage Journal
    I don't suppose that means 400 CNEs.... they must be talking about 400 software engineers working on Netware.

    Since they're proposing to cut 400 guys, that must mean that the actual Netware development team is some number larger than 400. Why so many guys are still working on a dead-end product with no future is beyond me.

    • Re:400 NetWare engineers?? (Score:5, Interesting)

      by bonius_rex ( 170357 ) * on Friday September 16, 2005 @07:45AM (#13575044)
      Why so many guys are still working on a dead-end product with no future is beyond me.

      I think Novell is in a hard spot wrt Netware. I admin about 50 Netware servers. *I* know that I can do everything I need on Open Enterprise Server. There is no technical reason to carry on with Netware, but convincing my higher-ups that Linux is no longer "just some hippie hobby thing" takes time.

      I'm afraid that if Novell were to discontinue support for Netware today, my management might decide it would be just as easy to migrate to Windows as to OES.

      Novell has to keep Netware support rolling along, while at the same time convincing PHBs (like mine) that Linux is perfectly acceptable for large scale mission critical deployments. Dropping a significant number of Netware engineers could cause Novell to lose customers if they are not very careful.

      • Novell has to keep Netware support rolling along, while at the same time convincing PHBs (like mine) that Linux is perfectly acceptable for large scale mission critical deployments.

        I always thought of Netware as a product, rather than an OS.

        If the next version of Netware looked exactly the same, could still run the NLM's you have, but the kernel was replaced with Linux, and there was no perceptible difference, would anybody care? (OK, I haven't run Netware since Linux became stable so I don't know if there
        • Well, if you are running two physcial servers, then the next version of Netware does look exactly the same, can run NLMs, and somewhat be replaced by Linux. Open Enterprise Server, which is the upgrade path from Netware, is your typical incremental services changes, except that those services can run either on a Linux (SuSE) or Netware kernel. Linux and Netware servers can co-exist in the same cluster (2 way clusters being included in the base price of Netware since 5.0, and still with OES), including shari
      • This makes me think that Novel should rollout an upgrade to Netware that is simply a rebranding of OES.... if they took enough time to port over the look and feel and made sure it 'behaved' the same way as the previous Netware but was actually an OES would anyone care...??

        For 'higher-ups' it would be a lot more comfortable ie: the new name wouldn't scare them off. "Oh it's an upgrade? Great, that's way better than switching to some unproven platform! Buy it."

        Novel could create documentation that looks just

    • Dead End? (Score:5, Informative)

      by alistair ( 31390 ) <(moc.padltoh) (ta) (riatsila)> on Friday September 16, 2005 @07:54AM (#13575096)
      I can't agree that Netware is completly at a dead end. To be sure it isn't a rapidly growing market but it isn't shrinking so fast either, the last time I met my Novell salesperson he said they still had over 400 Million Netware user licences under maintenance. Even if they lose 10% per year that still deserves heavy R&D.

      Novell has a clear strategy here, with the latest Netware you can run either the Netware or SuSE kernel. My guess is that eventually Netware will ship with a Linux core by default but a number of people will continue to buy it for all the value add features. Within 5 years you will then see a single core O/S sold and you will then be able to buy services such as eDirectory, file and print management, Zenworks etc. as the value add profitable services.

      Novell simply can't move out of Netware quickly, many infrastructure systems rely on it (I know of one airline booking systems and 2 cash machine networks in the Uk which still rely on it and I'm sure there are many, many more).

      IBM made a huge mistake in abandoning OS/2 with nowhere for its customers (especially embedded system / POS customers) to move to. Novell has proved once again the value of their maintenance contracts by fully supporting all their existing OS customers until they have a smooth migration plan to SuSE.

      • Re:Dead End? (Score:2, Informative)

        by lgarner ( 694957 )
        "To be sure it isn't a rapidly growing market but it isn't shrinking so fast either"

        It is shrinking. There are few, if any, shops converting to NetWare from another NOS, but there are a lot moving away. The only increases are likely to be within organizations which alreary have NetWare and need to expand.

        "with the latest Netware you can run either the Netware or SuSE kernel"

        That's OES that people are talking about. Novell can change it's name to NetWare if they like, but when discussing R&D and produ
      • At their recent seminar, Novell said that they plan to kill the existing Netware line and replace it with a linux core, so you're dead-on there -- especially since most of those services you mention *already* run on linux. Personally I think killing Netware as we know it today is a mistake, but Novell's objective is to wind up with only one core technology to have to support, and they felt that they were best off with an end-to-end product line that offers everything from server OS to workstation desktop --

  • Abend Condition: Private Jet Has Been Shut Down. (Score:5, Interesting)

    by ScentCone ( 795499 ) on Friday September 16, 2005 @07:09AM (#13574849)
    Just yesterday I was cycling through the KVM on a rack of machines in a server room, and one of the boxes, apparently untouched for over 3 three years, had puked just that morning (on a RAM hiccup, or something similar), and did the old Novell equivalent of a BSD. The funny thing (other than the timing) was that no one with any interest in the infrastructure could come up with the slightest idea what that machine was actually supposed to be doing. Right now the plan is to leave it off until some dev guy screams (or, payroll doesn't go through, or another equally dramatic land-mine type event).

    But the point is, that machine would appear to have gone from Important To Somebody Who Really Liked Novell to, well, Complete Obscurity in a pretty short time. Not entirely representative of Novell's current corporate state of affairs, but in retrospect, the whole thing was sort of poetic. Plus, the users in question are now about to pay for an audit of what the hell actually is running in their server room.
    • Hey! What happened to all my porn ?!?
    • the whole thing was sort of poetic

      Poetic as in, you and your organization are so short sighted and plan so badly that the only way your systems attract your attention at all is to crash? 3 years of runtime and you think that poetically represents failure? WTF?

      I hope that thing was a print gateway, and that there is a Unix box circa 1983 walled in somewhere under a stairwell that is even now filling its disk drives ip with print jobs.
      • you and your organization are so short sighted and plan so badly that the only way your systems attract your attention at all is to crash

        Where, in what I wrote, did you see me even suggesting it was "my" organization? I'm a consultant. I was there, with no prior exposure to their systems, to help them out of an unrelated emergency problem. I noticed the newly ailing Novell box while trying to understand what was on that side of a firewall chewing up bandwidth. That particular server was something none of

  • Set it up for a sale... (Score:5, Insightful)

    by MosesJones ( 55544 ) on Friday September 16, 2005 @07:12AM (#13574861) Homepage

    Cut back the corporate trappings, strip down to a core offering and get ready for a sale. Stripping down R&D to just what the market wants will help with that as well.

    IBM to buy Novell?
    Sun to buy Novell?
    Private Equity to buy Novell?

    Or alternative, Novell to flounder as they loose sight of any strategic direction while they look for a market exit.

    • LinuxWorld's Mark Hinkle doesn't think Sun will buy Novell by the look of it, he thinks they'll buy Red Hat [sys-con.com]. Or maybe IBM will buy Red Hat. Looks like Novell isn't at the head of the line for takeover yet.
    • Or alternative, Novell to flounder as they loose sight of any strategic direction while they look for a market exit.

      Well, if I'm gonna take Novell, I'll have to talk to the home owners association about parking spaces for those jets. And I've got room here for maybe a few dozen netware engineers. The rest will have to go in storage.

  • What about Mono? (Score:5, Informative)

    by MobyDisk ( 75490 ) on Friday September 16, 2005 @07:24AM (#13574929) Homepage
    I hope this doesn't harm the Mono project [mono-project.com], which Novell has been a vital part of. I have great hope for this project. But I'm not sure how it helps Novell's bottom line, so it might be the kind of thing that goes on the chopping block.

  • well maybe (Score:3, Interesting)

    by suezz ( 804747 ) on Friday September 16, 2005 @07:36AM (#13574986)
    ""We are disappointed in not only your failure to consider our proposals but also at the clear lack of urgency in implementing a strategic plan,""

    Gee maybe if they weren't busy trying to defend their business in frivolous lawsuits like sco then maybe they could concentrate and spend money on their actual business.

    Sounds like to me just a blowhard that either sco or microsoft or sun got a hold of to distract the company from the issues at hand.

    I fully support Novell in what they are they doing. Just because their busines model doesn't meet the standards of a convicted monopolist doesn't mean a thing. I got some of the longest uptimes on my servers from SUSE linux. To me that is what makes a business model. Fricken reliability - what a concept.

    Their NDS still rocks and runs on any platform. It blows Microsoft AD crap away.

    I am still waiting on sco's response to novell which I believe should be coming up real soon.
    • SCOX has responded to Novell (check groklaw). Though the response is creative and not founded in reality, SCOX continues their fine tradition of shooting themselves in the foot by contradicting themselves in their own documements.

  • The real question (Score:2, Insightful)

    by Anonymous Coward
    Is Novell making money? Ignore the stock price, that has little to nothing to do with if Novell operates at a profit or loss. If they are making money, tell the MBA's to go take a flying fuck at a rolling doughnut. See also: Costco.

    • Re:The real question (Score:2, Informative)

      by java.bean ( 66111 )
      Sorry, that's uninformed.

      Public ownership means the corporate executives have a duty to the shareholders to maximize their value (i.e. keep the stock price high). The shareholders are, after all, the owners. You don't tell the owners to go take a flying fuck.

      Even if they're making money, are they making enough money? Are they making the right strategic decisions? The shareholders invested a ton of capital in Novell, are the executives making the best use of it?
      • That of course is the problem (meaning I agree with what you wrote).

        Shareholders want to maximize immediate profits. This has little to do with the company's long-term interest. It probably goes against the company's long-term best interest as most "good" (for the company) decisions have only long-term results.
      • Public ownership means the corporate executives have a duty to the shareholders to maximize their value (i.e. keep the stock price high).

        That's simplistic, and if you understood the real, more complex answer, you'd realize how deeply you misunderstand what companies must do.

        There are plenty of companies who put other interests [jnj.com] above the stockholder's interests. As long as these other interests are clearly described to potential shareholders (usually in the corporate charter, the corporate bylaws and mentio

  • Pirates ahoy (Score:5, Insightful)

    by FishandChips ( 695645 ) on Friday September 16, 2005 @07:53AM (#13575091) Journal
    Ah, glad to see /. is keeping up with traditions as this one has been well covered on osnews.com for a day now.

    I guess a few ghastly, greedy "investors" fronted by teenage analysts are now circling Novell, scenting blood and booty. My understanding is that Novell is nowhere near profitability and the gap between declining Netware revenue and new Linux revenue is alarming. But Novell does have quite a lot of cash in hand and is entangled with IBM via the SuSE acquisition. I'd guess some of the Wall Street greed merchants are hoping for a takeover or a dismemberment, with IBM being greenmailed into picking up a very large tab on the Linux side because losing SuSE would be too painful for them.

    Of course, the little shits don't pitch it like that, just calling for better management.
  • Jack Messman was CEO at the old Cambridge Technology Partners (CTP) before it merged with Novell. Somehow, he became CEO at Novell and has held the position for 5'ish years.
    During his time on the board at CTP, then as its CEO and now as CEO at Novell, company value and performance has gone down. Way down.
    I'm doubt his pay has. Though, his stock options must be underwater.
    Somehow he weathers these storms as he drives these companies into the ground.

    His previous experience was with Union Pacific Ra
    • To be fair, the dot-com bust negatively impacted many companies. Evaluation of the performance of a company's leadership should take that into account (which wouldn't necessarily change the conclusion in this case, but it wasn't taken into account at all in your post.)

  • The Jets make sense, but not the products (Score:4, Interesting)

    by Rooktoven ( 263454 ) on Friday September 16, 2005 @08:56AM (#13575502) Homepage
    Why the hell would they want to sell Zenworks? That's probably still the best mass software deployment engine out there and it has been for over 6 years. Likewise Groupwise is another product that has a huge base and cements a Novell presence in the workplace.

    I'm all for doing more for Linux, etc. But Novell would be stupid to give up a couple of their secondary jewels. (The prime jewel being NDS of course...)
    • I had the same thought. To my understanding, ZENworks and Groupwise are among their major cash cows. One has to question the motivation behind the list of stuff these investors want Novell to ditch -- it sounds more like an exit strategy, or even corporate raiding to me.

  • Legacy Software (Score:3, Insightful)

    by Sylven_1969 ( 769427 ) on Friday September 16, 2005 @08:59AM (#13575522) Homepage
    Everyone knows that there are still places out there with Novell 3.12 servers still in place and cranking away day after day. I do agree that 400(+/- a few) Netware Engineers is ridiculous. Keep about a dozen of the best you have to support your legacy systems from now till Hell Freezes over if that's what it takes but don't alienate and leave those that supported the companies beginnings high and dry of tech-support. They should at least offer the rest of those engineers re-training in Linux as apposed to just cutting the guilotine rope and letting it fall on them. Of course the shareholders are only interested in the green bottom line and re-training high dollar employees is much more expensive than hiring in entry level green meat. I think that companies should have a legal responsibility to those employees that stay with them for years through thick and thin. I've seen too many people pour their entire lives into a job/company for 30 years just to be cut loose at a moments notice without as much as an explanation and/or "thanks for your years of loyalty to us". I personally think that it should be a law that for every five years you work for a place they owe you 1 year of salary based on your yearly average over that 5 years. That way if they decide to dump you for no reason you have a year to recover mentally/emotionally/financially from the impact of what can be a very trying time in a persons life. I know we have unemployment but that's not the same, I'm not talking about a percentage paid to you by the company I mean that if I got fired today I would have the next 12 months pay come in just like normal and I could take my time planning my next career move. Oh well , nothing but a pipe dream I'm sure, dreaming isn't so bad a thing though :)

  • Fire/lay off 40% of the most unproductive managers and middle managers

    Cut HR by 20%

    Increase marketing/sales half of what HR is cut by (in number of bodies) so that adoption of Linux from Netware can be increased (thus naturally relieving the NetWare burden)

    (If attrition is high) Give a 20% increase in salary to new hires and pay increase to the 50% most productive coders/researchers

    Streamline the organization internally so there is no more than 4 steps from any employee to an executive officer.

    No, you

  • Novell has positioned itself to deliver a complete solution from the desktop to the server.

    If they finalize the Novell Linux Client AND make it run on most dists there are many companies who could switch to OES on the back and Linux at most of the desktops in a heartbeat. I assume there are a bunch of people like me out there who want OES but also want a linux client. Ncpfs doesnt quite cut it, neither do pam_ldap.

    I really hope they get their thumbs out, to much waiting and many customers will move to other solutions.

  • What this is about (Score:3, Insightful)

    by johansalk ( 818687 ) on Friday September 16, 2005 @12:57PM (#13577946)


    This is about share price. Nothing else. Fire a bunch of people and some similar shenanigans so that the share price would increase and those shareholders can cash in and go off to do the same to other companies.

    It has nothing to do with what's good for the company, just what's profitable in the immediate for those particular shareholder.

    Same thing is happening at Time Warner, with one of the corprorate raiders of the 1980s who's now one of their shareholders and making a noise for them to sell off lots of good stuff and repurchase their shares so that the share price would increase and he would cash in.

    This is the disease of the American economy.

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