Networking World: Investor and financial analyst urge Novell to sell off units

NETWORK WORLD NEWSLETTER: DAVE KEARNS ON NOVELL NETWARE TIPS
09/22/05
Today's focus: Investor and financial analyst urge Novell to
sell off units

Dear networking.world@gmail.com,

In this issue:

* Novell told to sell off units and lay off 400 engineers
* Links related to Novell NetWare Tips
* Featured reader resource
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Today's focus: Investor and financial analyst urge Novell to
sell off units

By Dave Kearns

Even when Novell draws high praise, it seems that there's always
an iron fist in the velvet glove. At least, that seemed to be
the case last week when Blum Capital Partners, a major investor
in Novell stock, revealed correspondence it had had with Novell
board of directors. Among Blum's suggestions:

* Sell or spin off Celerant Consulting, the British firm
recently acquired by Novell.
* Sell or spin off Cambridge Technology Partners, the consulting
firm which - in effect - acquired Novell a few years ago since
most of the upper management now in place at Novell came from
CTP.
* Lay off 400 engineers in Provo.
* Divest GroupWise, Tally Systems and the ZENworks products.

All this so that the company can concentrate on the Linux and
identity management sectors of its product line.

Yet SuSE Linux has yet to demonstrate that it's of interest to
the enterprise business customer. According to information
gleaned from the financial statements of Red Hat and Novell, Red
Hat shows license renewals at a rate of five times those for
SuSE.

Two weeks ago, Credit Suisse First Boston analyst Jason Maynard
also suggested that Novell divest itself of the consulting
businesses and went on to suggest that it also needs major
management changes. He lamented the departures of open source
advocate Chris Stone and former SuSE CEO, Richard Seibt. Others
point to the ascendancy of Ron Hovsepian to the role of "heir
apparent" to Jack Messman as a sign of the bad moves the company
has made - Hovsepian was president of Novell's North American
unit, the area that has seen its revenue and profits plummet the
most.

While I can't disagree with dumping the consulting businesses
(Cambridge Technology Partners has never been profitable for
Novell), the Provo engineers, ZENworks and even GroupWise are
all profit centers for the company. They are all that's
providing capital and revenue right now. The Linux and identity
businesses are promising, but there needs to be revenue now.

As to the company's management, I'm also on record as advocating
major changes - beginning at the top. But Novell is doing some
very good things right now - powered by those engineers in
Provo. Recent announcements at BrainShare Europe show that the
company is interested in regaining its place as the leading
identity management company (see this week's Network World
Identity Management newsletter for details).

As many of you tell me, and some of you tell me often, when
there's positive news about the company it should be noted. To
that I'll add that when there's negative news it should be
accurate.

The top 5: Today's most-read stories

1. McAfee, Omniquad top anti-spyware test
<http://www.networkworld.com/nlnovell6964>

2. The rise of the IT architect
<http://www.networkworld.com/nlnovell7181>

3. Users discuss big VoIP rollout risks and rewards
<http://www.networkworld.com/nlnovell7502>

4. Cisco targets SMBs with convergence
<http://www.networkworld.com/nlnovell7503>

5. DemoFall preview <http://www.networkworld.com/nlnovell7331>

_______________________________________________________________
To contact: Dave Kearns

Dave Kearns is a writer and consultant in Silicon Valley. He's
written a number of books including the (sadly) now out of print
"Peter Norton's Complete Guide to Networks." His musings can be
found at Virtual Quill <http://www.vquill.com/>.

Kearns is the author of three Network World Newsletters: Windows
Networking Tips, Novell NetWare Tips, and Identity Management.
Comments about these newsletters should be sent to him at these

respective addresses: <mailto:windows@vquill.com>,
<mailto:netware@vquill.com>, <mailto:identity@vquill.com>.

Kearns provides content services to network vendors: books,
manuals, white papers, lectures and seminars, marketing,
technical marketing and support documents. Virtual Quill
provides "words to sell by..." Find out more by e-mail at
<mailto:info@vquill.com>
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This newsletter is sponsored by HP
FROM THE NETWORK CORE TO THE NETWORK EDGE

Archive of the Novell NetWare Tips newsletter:
http://www.networkworld.com/newsletters/netware/index.html

Novell news page:
http://www.networkworld.com/news/financial/novell.html
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Networking World

Thursday, September 22, 2005

Investor and financial analyst urge Novell to sell off units

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