More about Novell's financial problems, plus the effectiveness of its sales force

Today, we're going to delve into Novell's business once again, because there were a couple of notes I saw recently that could impact how we view the company as well as how it will fare in the future.

A couple of weeks ago (see "Novell feeling the pinch from Nasdaq") I talked about the company being caught between a rock and a hard place over the issue of post-dated stock options. According to an article on legal journal law.com, these troubles could reach back to 1999 when at least one member of Novell's board of directors, who has since left the board, was also on the board of a number of other companies being investigated (or self-investigating) over stock option issues. The same individual is also named as a "key player" in an Associated Press story about the HP board scandal.

Larry Sonsini, a partner at the law firm of Wilson, Sonsini, Goodrich & Rosati, is well known in Silicon Valley and has been involved with many technology companies over the years. It was once thought that he had the "Midas touch" when it came to high-tech, but - as Novell is now finding out - it might have been just the opposite.

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Today, we're going to delve into Novell's business once again, because there were a couple of notes I saw recently that could impact how we view the company as well as how it will fare in the future.

A couple of weeks ago (see "Novell feeling the pinch from Nasdaq") I talked about the company being caught between a rock and a hard place over the issue of post-dated stock options. According to an article on legal journal law.com, these troubles could reach back to 1999 when at least one member of Novell's board of directors, who has since left the board, was also on the board of a number of other companies being investigated (or self-investigating) over stock option issues. The same individual is also named as a "key player" in an Associated Press story about the HP board scandal.

Larry Sonsini, a partner at the law firm of Wilson, Sonsini, Goodrich & Rosati, is well known in Silicon Valley and has been involved with many technology companies over the years. It was once thought that he had the "Midas touch" when it came to high-tech, but - as Novell is now finding out - it might have been just the opposite.

The other note I saw was at our sister publication InfoWorld where former Novell and Lineo exec Matt Asay talked about how best to sell open source products. In a nutshell, he suggests that initially you don't need a direct sales force as it will spend way too much time answering typical FUD questions about open source and too little time talking about the product. It's only when, such as in the example of Red Hat or MySQL, potential customers want to talk about product rather than philosophy - as Asay says: "Once prospective buyers think of you less in terms of open source, and more in terms of product quality and innovation..." - that the benefit of a sales force can be utilized.

Of course, Novell has had a large sales force selling its proprietary products since before the company became as an open source provider. Perhaps, if we read between the lines Asay wrote, we can see that the sales force can't be effective because of the open source message Novell is trying to preach.

As always, I'm interested in your interpretation of this stuff, so drop me a note.

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