Shareholder Letter
Dear Shareholders:
Novell celebrated an important milestone in 2008: We marked our 25th anniversary as a company. And while we have a distinguished past with privileged relationships around the world, it's our future that excites me the most. Preparing for that future while delivering on our fiscal year commitments was our focus in 2008.
Two years ago, we outlined a strategy to get us to long-term, sustainable profitability. I am proud to say that we have substantially completed this transformation and established a solid foundation for strategic growth. To get there, we sharpened our focus as an infrastructure software company and increased our focus on helping customers lower cost, complexity and risk in their mixed IT environments.
In 2008, we continued to enhance our organizational model around our four business units while building a more solutions-centered approach. Our customers and partners have told us this approach makes it easier for them to take advantage of our award-winning technology. Our product development, sales and marketing, and back-office functions have all been improved for effectiveness and efficiency. We realigned Novell® Services to drive product revenue and to support our partners. Novell Services is now focused on driving software growth and additional services opportunities for our partners. Finally, we have added new customers and strategic partners to further increase our business momentum. The results have been tangible on virtually all fronts. We've grown existing customer relationships while adding 6,600 new customers. And our role and promise of value in the overall IT industry is clearer than ever.
Novell® Making IT Work As One™
We have not wavered from the strategy we adopted more than two years ago: to focus our business model on infrastructure software and to be the leading provider of the best-engineered Linux and IT management software. I believe our strategy positions us well to serve our customers and take advantage of new opportunities. Our strategy, however, also needed a powerful, credible, durable and differentiated way of describing our brand promise to all our stakeholders. We needed a promise our customers, prospects, partners, employees and investors could relate to and understand. That's why we adopted our new corporate positioning: Novell Making IT Work As One. Our brand promise states that through our infrastructure software and ecosystem of partnerships, Novell harmoniously integrates mixed IT environments, allowing people and technology to work as one.
This simple statement clearly declares our category, the critical importance of partners, our unique differentiator, and that our mission is not just a technical goal, but a human one as well. This positioning reflects, supports and enhances our strategy, technical vision, culture, and values.
A Focus on Solutions
The best way to deliver on our commitment of making IT work as one is to speak in terms customers care about. Customers are looking for real solutions to real problems—not just a menu of products and technologies. They are also looking for a set of trusted relationships to help them get the most out of what they have—while delivering real value.
With this in mind, we introduced a solutions framework in the second half of 2008, which we will further expand in 2009. This framework targets three distinct, yet interrelated, focus areas: Data Center, End-User Computing, and Identity and Security. Our business units create and our geographies deliver very specific value and expertise in each of these areas. Our Data Center solutions, for example, help organizations build an agile IT infrastructure, "go green" by addressing power and space constraints, deliver better performance, and lower IT spending. In End-User Computing, we help organizations become more productive both at the individual and team level, deliver a better and more affordable desktop solution, and help secure and manage multiple end-user devices. Within our Identity and Security solutions, Novell helps organizations build a trusted environment designed to minimize risks and meet compliance requirements, provide timely and secure access to information, and reduce the cost and complexity of ever-increasing governance requirements.
Ronald W. Hovsepian President and Chief Executive Officer
“ I have more faith than ever in the Novell business model. As an infrastructure software company, our enviable roster of technology partners, our deep technical prowess, and our track record of solving real business problems for our customers is right for the times we live in. I look forward to the future—we're extremely excited and committed to helping our customers reach their business goals.”