* What's inside Hovsepian's head?
Today we’re going to take a look at Novell’s new CEO and see if we can discern how the recent management changes will affect the company’s products and customers.
Ron Hovsepian steps in as CEO after only a few short years – but a very rapid rise – in the Waltham, Mass., headquarters of the erstwhile Utah networking company. It was just three years ago, in June 2003, that Hovsepian joined the company. That was three years after leaving IBM where he’d been employed in a variety of positions over 17 years.
In fact, Hovsepian gives the impression that he’s always on the lookout for his next position, as CEO is his fourth office in three years at Novell. He started as “president of North America,” (certainly an unfortunate sounding title) then was elevated in May 2005, to “executive vice president and president, global field operations,” which in most companies with normal titles for officers would have been called vice president of sales. After six months in that position, he was named COO last fall.
His track record with Novell, though, is hardly covered in glory. As I said in a newsletter when he was named COO last fall, during his term as president of North America, he presided over a rapid decline in sales for the region (see Novell’s fiscal year 2003 revenue numbers, which show a decline of almost 17% in new license revenue). As a reward, he was promoted to the chief sales position in charge of worldwide sales. But while in that position, Novell’s sales was disappointing at best (see Novell’s 2005 third quarter results, which show a year-over-year decline of almost 20% in new license revenue). So when he was named COO, it was puzzling that he was not only left in charge of all sales but also given day-to-day responsibility for product development and marketing!
Hovsepian has no record of involvement with networking, NetWare, eDirectory, GroupWise, ZENworks, SuSE (or any form of Linux) or open source during his 17 years at IBM. Where he stands on Linux and open source is unknown. But it may be significant that SuSE Linux founder Hubert Mantel resigned from Novell just a few days after Hovsepian was named COO and given overall control of product development.
Hovsepian does have credibility with the investment community, though. A couple of weeks before the ouster of Jack Messman, Forbes magazine (“Time For New CEO At Novell, Says Analyst”) quoted Banc of America Securities analyst Kirk Materne as saying: “We believe Novell’s current challenges require a CEO with an operational and sales background and we believe appointing Mr. Hovsepian CEO would be well-received by the investment community.”
It appears that the company will have a short time to turn around its image with investment analysts and major shareholders. But what the marketing message will be is anybody’s guess. With no personal ties to legacy Novell products or the currently “hot” commodities of open source and Linux there are no clues as to what direction Hovsepian will set for the company.
Still, the investors and analysts called for the sell-off of Celerant Consulting and the company did that. They called for a restructuring to reduce the workforce, and the company did that. They called for the ouster of Jack Messman and the elevation of Ron Hovsepian, and the company did that. So what else did the investors and analysts ask for? As we reported (“Investor and financial analyst urge Novell to sell off units”) last fall, they want Novell to sell off “non-core businesses” specifically including GroupWise and ZENworks.
If Hovsepian is the chosen leader of these analysts and investors, then it appears that Novell’s future – at least as the company providing GroupWise, NetWare, ZENworks (and its major components, such as eDirectory) – isn’t one that current paying customers will be interested in. We’ll continue to follow developments to see if the company is interested in its current customer base, of course, but the signs and portents aren’t good.
