Chris Stone and Novell part ways

* Why Chris Stone is not expected to make another Novell comeback

Last week, I promised that today we'd take a closer look at Chris Stone's departure from Novell, so let's get right to it.

In a Nov. 4 press release announcing Stone's departure, Novell said that the former vice-chairman had left "to pursue other opportunities." While Stone is quoted in the release as saying "It is with some regret that I have decided to leave Novell," it's notable that the company filed a notice with the Securities and Exchange Commission indicating that Stone was provided with a severance package of $2 million, plus healthcare benefits over the next 18 months. Employees who resign voluntarily are rarely given "severance" packages.

While it's possible that Stone's contract with Novell required the payment even if he left voluntarily, I can't picture Jack Messman agreeing to that kind of deal. The fact that no one has been able to speak to Stone indicates to me that his silence was part of the deal to obtain the severance package.

Stone has been absent from Novell's offices over the past couple of months - perhaps the past three months. I saw him at the Burton Group's Catalyst conference in mid-July (where he ducked, weaved and bobbed so he wouldn't have to talk to me). I also expected to see him at the end of July at the O'Reilly Open Source conference - but he pulled out of his keynote session at the last moment.

Shortly thereafter, Novell announced that Stone had taken a leave of absence to complete a short executive MBA program at Harvard. And shortly after that, Messman announced that all of the people who had reported to Stone would now report to two executives Novell inherited through its acquisition of Ximian and SilverStream Software: David Patrick, former Ximian president and CEO, and David Litwack, former SilverStream president and CEO. This left Stone a "minister without portfolio." In the culture that is Novell, this generally means the person should find somewhere else to go (Eric Schmidt, for example, had to be given several nudges before jumping ship and landing at Google).

Stone's tenure at Novell was actually his second at the company. From 1997-99, he was the rising young star whom observers believed was being groomed to eventually replace Schmidt as CEO. After Schmidt left, Messman in 2002 recalled Stone to "active duty," where it was widely believed that - after a year - Messman would crown him CEO. But it didn't happen under Schmidt nor did it happen again under Messman. It's rumored that Stone's impatience got the better of him both times. Impatience not only with "waiting in the wings," but also with both the direction the company was taking as well as the speed at which it was getting there. Stone is a smooth and suave speaker, but in one-on-one conversations, he can be highly opinionated and even somewhat abrasive.

Evidence that there was a battle over direction and speed was noted in a Computerworld story about Stone's departure (see link below). The story quotes Dion Cornett, a financial analyst at Decatur Jones Equity Partners in Chicago, who called the departure "a negative for both [Novell] and the industry."

In the story, he adds, "We believe that Mr. Stone was instrumental in pushing Novell toward a strategy of capturing value from open source software, as opposed to other members of management may be more inclined toward giving away Linux to fuel demand for [Novell's] other offerings, such as identity management and directory services. We believe that the latter is a flawed strategy in that [Novell's] other products will eventually face commoditization as well, and giving away the operating system not only sets a poor business precedent, but may even accelerate the commoditization of products higher in the stack."

In other words, Stone may eventually be proven right, as he was after leaving Novell the first time. Back then, Stone wanted to move more quickly to encompass and employ open source within the NetWare framework and left because he was frustrated at Novell's slow pace of adopting this strategy. But no one expects that there'll be a third coming.

Learn more about this topic

Update: Open source advocate Chris Stone leaves Novell

Computerworld, 11/05/04

The Extended Enterprise Issue

Network World, 11/15/04

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