Novell Cool Solutions

Setting the Record Straight



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April 5, 2006 11:40 am

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I’m breaking a cardinal rule of PR by prolonging a negative story, but at a certain point, you’ve got to step in. There have been several articles recently about the departures from Novell of Juergen Geck, who was the CTO at SUSE Linux before the acquisition, and Amnon Harmon, the former COO of SUSE Linux who had an financial operations role in Novell EMEA post-acquistion. Most of these simply reported the news, which is fine. However, several have chosen to try to draw deeper, dismal conclusions about Novell’s Linux business. An April 4 Network World column (not yet available online, but will likely be here shortly) is an example of this.I’d like to make a few points. First, these interpretations of SUSE personnel departures from Novell as inherently negative seem to start from a premise that, to me, is seriously flawed: that the acquistion of SUSE was designed, from the start, to leave SUSE completely intact. Needless to say, Novell purchased SUSE Linux AG because we saw great synergies between their Linux technologies and our experience in the enterprise software space. It didn’t mean that we committed to simply buying the company and keeping everything as it was. In the process of integration, it’s inevitable that there are changes. There have been a grand total of five individuals from SUSE at management or middle management levels that have left in almost two and a half years. Only two of these were technical individuals. I suspect there are few mergers of this size with less turnover than the Novell- SUSE deal. Second, despite breathless claims of Linux and open source brain drain each time someone at SUSE leaves, Novell has very strong Linux and open source expertise. The vast majority of SUSE Linux engineers have remained at Novell, and senior leaders from SUSE, including Markus Rex, Holger Dyroff, and others, play key roles in the company. Engineers from Ximian contribute significantly to our open source projects. Beyond SUSE and Ximian, we’ve attracted several important players in the open source world to Novell, guys like Greg Kroah-Hartman, Jeremy Allison and Robert Love, because they’re interested in what we’re doing. Finally, a critical point that most press analysis seems to miss, a large number of traditional Novell engineers have moved over to work on Linux and the other open source projects we’re involved in. These are very strong technical people, with years of experience on operating systems and related technologies. Attempts by media to continue to portray Novell’s Linux strategy as SUSE vs. Ximian are outdated, misplaced, and inaccurate. Third, much press continues to seek to describe Novell’s management situation as in turmoil. Our CEO has been at Novell nearly five years. Our president and COO has been at Novell nearly three years, albeit in different roles. True, we’ve brought in new management over certain parts of the product business, including Jeff Jaffe as CTO and Roger Levy over the open platforms business. And we recently made some internal promotions. But these are positive moves that have given us world class technology and business leadership. These are guys that have driven success at companies like IBM, Bell Labs Research and other companies. Why wouldn’t Novell want players of this caliber? But, again, it seems easier to imply that any change is turmoil, therefore bad for the company. An objective assessment of the current management team at Novell would have to recognize it for one of the most experienced, successful senior management groups in the company’s history. I understand executive moves are news. I understand journalists have the right to their opinions. But providing perspective and context is critical to conveying an accurate picture. That’s what’s missing in some of this reporting.

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Categories: Expert Views, General, PR Blog

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17 Comments

  1. By:Anonymous

    I’ve just deleted an anonymous comment to this post that had an unsubstantiated derogatory statement about an individual at the company. I’ll continue to delete flames like those. We welcome constructive comments. Thanks.

  2. By:Segedunum

    As uncomfortable as all this may be, unfortunately the old adage is that if it walks like duck, swims like a duck and quacks like a duck then it’s a duck I’m afraid.

    Novell seems to have a very, very huge identity crisis (from the identity management company!), bourne out by these departures (and many are acrimonious, regardless of the public smile), and also in what it sells. Is Novell really moving people to Linux or are they trying to perform CPR on Netware and other products because of some peoples’ emotional attatchment to it? That’s certainly what it appears.

    I’m sorry that you get irritated by the perception of Suse vs Ximian. It’s actually Suse vs Ximian vs Novell (Netware) in a three-way triangle. There is just no painting over that and no getting away from it. That’s the uncomfortable public perception that Novell gives, regardless of how anyone tries to smile in public. You simply can’t blame the press for feeding off it, and denying the obvious will just make it worse.

    If Novell wants that to change then I suggest Novell gets a clue, starts getting some genuine leadership in its management ranks and starts employing executives who know about their market, know the software that they’re using inside out, top to bottom (as well as any limitations) and can give a crystal clear direction to the company on what needs to be done – and be able to explain why to employees and shareholders alike. People from IBM and Bell Labs may seem good from an executive point of view, but the vast, vast majority obviously know nothing about how to be a Linux distributor, how to use open source software fully and how to chart a future course in comparison with what the guys in charge of Suse were doing. Many executives, from Messman down, appear to be like stuck records, regurgitating the same stuff time after time. It’s obvious they themselves have no idea at all about the software Novell uses, how it needs to be improved, what its limitations are to the competition and have never been at a coal face using it in their lives.

    Unless that changes Novell’s customers are going to continue to leave and revenue is going to continue to head south.

  3. By:Anonymous

    A few quick points:

    First, that anyone can doubt Novell’s commitment to Linux at this stage is hard to fathom. We’ve put more time and resources behind building our Linux and open source offerings and ecosystem than any other vendor on the market. We contribute code and resources to numerous projects. We’ve been very clear that we see Linux as key to Novell’s future. We’ve also been clear that we’re protecting the investments of our millions of NetWare customers as well, and we’ve delivering a product – Open Enterprise Server – that does that.

    Second, Novell’s revenue has actually grown in the last few years.

    2005 – $1,197,969,000
    2004 – $1,165,917,000
    2003 – $1,105,496,000

    We’ve acknowledged for some time that our challenge has been to grow the new businesses around Linux and identity faster than the NetWare business is declining. We’re starting to see that happen. Do we want to do better? Absolutely.

    Third, the investors in SUSE sold to Novell because they, too, saw the synergies between the two companies. To suggest that things would somehow be better in SUSE management were still in control of the Linux business is a fruitless exercise.

    Finally, I understand the blogosphere is about letting people express their opinions. We launched the PR blog to invite dialogue with folks interested in Novell. I’ve been at Novell six years. I’ve been involved in the SUSE and Ximian acquisitions, I know people at the companies involved. I know what goes on here. You may take what I write as marketing spin or not, but you know who I am. I’m always curious where people outside Novell, many who post anonymously, get the information about internal workings at Novell that they position as fact. It’s more credible if you identify yourself and your sources. Thanks.

  4. By:Segedunum

    We’ve put more time and resources behind building our Linux and open source offerings and ecosystem than any other vendor on the market.

    Well that’s nice, but it is totally uncoordinated and totally unclear how that investment is going to fit together into Novell’s main products. I suspect that most of your Netware customers have absolutely no idea how all that open source stuff will be used – if they know it’s going on at all. There is a clear lack of leadership regarding that.

    We’ve been very clear that we see Linux as key to Novell’s future. We’ve also been clear that we’re protecting the investments of our millions of NetWare customers

    Well let’s not get carried away with the millions. Netware customers, and revenue, are dropping fairly rapidly. The customers leaving obviously don’t feel the need to protect their investment in Netware for the future, and Novell should see things their way.

    as well, and we’ve delivering a product – Open Enterprise Server – that does that.

    What customers are looking for is direction from Novell. If Linux is the future then create a product entirely using Linux, ditch Netware entirely, and make sure that a customer can take a Netware system and move lock and stock to a shiny Linux system without losing anything. If necessary, move Netware components fully to run on a Linux platform (open source if necessary), but do not prolong Netware’s life. It’s over. Customers do not like uncertainty and multiple products in the name of choice.

    OES is actually two completely separate products – a system using Netware and a system using Linux. It’s pointless, and customers don’t want to see it. OES should be a single Linux distribution with all the right software ported to it (plus other goodies), but it isn’t.

    Second, Novell’s revenue has actually grown in the last few years.

    2005 – $1,197,969,000
    2004 – $1,165,917,000
    2003 – $1,105,496,000

    It has hovered around for a while, mainly due to existing customers carrying heavier support charges amongst other things ;-). It doesn’t alter the essential truth though. The customer base is declining, and if revenues are to increase in a meaningful way Novell will have to find new customers or squeeze existing ones in order to maintain what they have. That’s logic.

    To suggest that things would somehow be better in SUSE management were still in control of the Linux business is a fruitless exercise.

    Now that the takeover has happened you can say that it’s fruitless – but that would have been the case, and I suspect journalists realise that to. Let’s put it this way – few people doubt that things would be any worse than they are now.

    You may take what I write as marketing spin

    I will. When things are difficult a company is never going to be forthcoming as to what the truth is. The truth comes out in who goes out of the door, and how, and the products that are pushed to customers.

    I’m always curious where people outside Novell, many who post anonymously, get the information about internal workings at Novell that they position as fact

    Have you never thought that outsiders and customers see what’s going on through using Novell’s products and that people can see the effects of what goes on internally at Novell as a result? They also see what has happened in the past regarding things like Wordperfect. What you produce (or not) as a company is a direct result of what goes on internally, regardless of any spin. You simply can’t hide that.

    It’s more credible if you identify yourself and your sources.

    Like I said. How Novell’s customers and customers view you and the new products and software that are being pushed, as well as the departures that have happened, are what matters. Asking for concrete, internal evidence of a smoking gun will do no good.

  5. I agree with Segedunum. There’s a lot of truth that isn’t good news for Novell, and like a good “PR” person, you have to spin it in the most positive way possible.

    There are “millions” of NetWare customers, and quite frankly, they’re pissed. Novell is killing off a great product for no other reason than because someone in their management area likes the “shiny new nickel” that is Linux.

    Linux is NOT ready to wholesale replace NetWare. Heck, NetWare has issues with the last few Support Packs, which gives everyone watching a distinct impression that Novell is intentionally damaging NetWare in order to push folks to Linux even faster.

    Until you can simply and effectively migrate NetWare to Linux AND have some utilities that are familiar to the NetWare crowd, you might as well change the default language to Mandarin Chinese, IMO.

    One thing Novell has accomplished is to move companies off of NetWare, but too many are choosing Windows instead of “OES-Linux”.

    Novell is being extremely disingenuous with the “OES” label. Pick one. Either have Linux, NetWare or Both, but don’t tell everyone that “NetWare will be supported until 2015, or as long as our customers demand it” load of carp.

    Freezing development on NetWare is ridiculous. There are a lot of unanswered questions:

    What of the developers? What of the newer 64-bit servers? What of the 4GB memory limitation of NetWare? What of iFolder 3 being Linux-only? What of eDirectory 8.8 not being compatible with Novell’s other “Directory-enabled” products?

    Novell is unnecessarily causing great angst with the partner channel. There’s a *lot* of other unanswered questions. It’s never a good thing when Novell refuses to give a Product Roadmap.

    I apologize for rambling here, but there’s *so* much that Novell seemed to not consider when moving towards with the “Linux Everywhere” strategy.

  6. By:suka

    @Bruce: Just ignore Segedunum, he is the No.1 Anti-Novell troll on OSNews, bitching under every single article with the same baseless “arguments”. Most of his postings are steared by his hatred and paranoia especially against the Ex-Ximian-guys. Also he l

  7. Unfortunately you are a publicly traded company. I feel for you there.

    On the other side of the table is the technology- and on that side I see only positive things for your products, been playing with every release and the integration between netware and your newest products is ideal- Ignore the pundits, focus on your channel partners, marketing, and simply keep up the good work. PS- get 10 enterprise out on time and give it free with 1 year of red carpet support. Give the pundits an option to play with :-)

  8. By:Segedunum

    @Bruce: Just ignore Segedunum, he is the No.1 Anti-Novell troll on OSNews, bitching under every single article with the same baseless “arguments”. Most of his postings are steared by his hatred and paranoia especially against the Ex-Ximian-guys.

    Blah, blah, blah and so on and so forth. I’m sorry I’m perceived to be attacking your babies, but it has no relevance to what’s been said. If you have something constructive, by all means say it.

    Besides, this has nothing to do with Ximian – it’s about Novell, their paying products and Netware and on the periphery, the open source software Novell supposedly uses and hbow they interact. You’ve given yourself away there ;-).

    while what he writes are mostly just some badly misunderstood rumours he read somewhere (and he likes to present as “insider-facts”).

    Never made any mention of insider facts – it’s how a company reacts to the outside world and its customers that gives it away. Like I said, if you have a useful response, feel free.

  9. By:Segedunum

    There are “millions” of NetWare customers, and quite frankly, they’re pissed. Novell is killing off a great product for no other reason than because someone in their management area likes the “shiny new nickel” that is Linux.

    Well, Duane Fish, in reality Netware customers (certainly most) don’t care. If Linux is the future then they want to learn how to move to it effortlessly without losing any of their current Netware functionality and gaining some of what’s going on in the open source world. If there is stuff missing in Linux then write a replacement or port it from Netware. Easy. Customers don’t want a choice, because that means they have to do the research all themselves. It’s a bad company that asks their customers to do that.

  10. By:Jason C. Kay

    Bravo!

    I’ve been saying this exact same thing every time some former SuSE employee leaving Novell makes a splash in the press. The ones who have left on good terms indicated such, and just commented that they enjoyed working in the small business space. At the end of the day, the Linux engineering talent at Novell has never been stronger.

    I say those that wish to leave should be encouraged to, as their departure is much better than having an unhappy voice in the ranks.

    Thank you for sharing this view and having the courage to make this statement, Bruce. Kudos to you for posting your opinion on the matter in such a public forum – I believe you are entirely correct and are not prolonging a negative story.

  11. By:John Lewing

    Mr. Lowry – You indicate that Novell is growing revenues. Can you please adjust the revenues for any acquisitions that occurred post 2005.

    One thing that many companies try to do when their core business declines is buy revenues. While this makes revenue comparisons look better, it unfortunately can be costly for shareholders. That’s especially true for acquistions which do not meet expectations. May I be so bold as to say that the vast majority of Novell’s acquisitions over the years have failed to meet stated expectations ?

    I would appreciate the adjusted revenue growth figures, and will guess they will show significant decline.

    Good try, though.

    Mr. Lewing

  12. By:John Lewing

    Correction: post 2000.

  13. By:Anonymous

    We haven’t provided a public breakout of revenues “with acqusitions” vs. “without acqusitions,” so I’m certainly not going to do it via the blog. I’m also not going to get into a discussion about the value of Novell acquisitions. The main point I was trying to make here was to refute the erroneous statement that Novell’s revenues are falling.

  14. By:John Lewing

    If your attitude is to refute people on technical grounds, without responding to the spirit of the comment, it would seem your PR blog is being used for PR.

    Your refusal to discuss the value of Novell acquisitions suggests that you only want to deal with easy questions….again suggesting this blog is for PR and not an honest discussion.

    Novell’s revenues are, in fact, falling if you exclude the impact of the Euro rise and the revenues that have been purchased.

    For shareholders the important things is not revenues, but revenue per share. During the period you identified the basic and potentially dilutive shares outstanding rose more than 10%, which more than eliminates the supposed revenue gains you are so proud of. Add the increase in the Euro, which mgt doesn’t control, and it’s an even greater fall in organic revenues.

    You show your hand by using the term “refute”…..it suggests your job is not to understand and discuss but to protect Novell from negative opinions in the market or shareholders.

    If you think the trends in Novell revenue are positive, you are the perfect PR representative for Novell.

  15. By:Anonymous

    John:

    You are obviously someone with a good understanding of financial market, based on your comment. So you should understand that I can’t put out on a blog a series of financial data that Novell, as a company, has not made public. When we’ve made significant acquisitions, we’ve identified the anticipated revenue implications of those acqusitions. For example, we just indicated that we estimate that the eSecurity acquisition will add roughly $20 million in revenue over the next twelve months.

    All I said in my post is that revenue has not been falling, to counter the claim made in an earlier comment that revenue was “heading south.” Your argument – that Novell’s revenue, absent acqusitions, would be falling – is a different issue. This isn’t a number that we’ve ever broken out, so I’m not in a position to agree or disagree with your argument. I suspect that there are a number of observers like you who are making their own calculations based on the points you raise. We’ve made acquisitions in areas that we think are growing. So we certainly hope those acquisitions would contribute revenue to Novell. We’ve been very clear that we are trying to counter declines in revenue in our traditional businesses – primarily NetWare -by more rapid growth in areas like identity and resource management. Some of that growth will be via acquisition.

    I’m sorry if all you think I’m giving you is spin. You’re asking me for information I don’t have, and couldn’t give out, even if I did. This blog is giving you a forum to put your opinion out there. I do feel it provides an opportunity to discuss Novell, but there are parameters. Thanks.

  16. By:John Lewing

    I understand your situation.

    It is indeed unfortunate that Novell chooses not to release the acquisition related data. If Novell were interested in providing this information to shareholders, we would all (including you) be in a better position to understand what is happening in the business. As you know this is referred to as financial transparency, and is a value which ethical companies place in high regard.

    If you do have the opportunity to help expand the transparency of Novell financial reports, it would seem a worthy cause.

    Unfortunately, those “parameters” you mentioned might get in the way of ethics.

    JL

    It is good of you to provide a thoughtful response, which generally improves my perception of Novell’s approach to business.

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