* What does Novell need to do to be successful with Linux?
The decision by Novell’s board of directors to oust CEO Jack Messman last week could be seen as a failure overall by the executive to grow Novell’s Linux revenue; but could it also be a sign that Novell’s overall strategy to focus more on open source and Linux technologies has backfired?
Novell decided last Wednesday to replace CEO Jack Messman with Ronald Hovsepian, who served as the company’s president and COO. Hovsepian will assume the CEO and president titles. The move came after Novell warned investors that it would miss its Wall Street revenue projections for a second straight quarter; Novell’s shares fell 15% after this announcement was made at the end of May.
Messman was the architect behind Novell’s Linux and open source strategy, which led to the acquisitions of SuSE, maker of the popular enterprise Linux operating system distribution, and Ximian, which makes Linux desktop and management software. But in its most recent quarter, Linux and open source software only accounted for 4% of the company’s $278 million revenue; Linux market leader Red Hat made $79 million in Linux software and services sales in the same quarter.
Novell made some interesting moves in blending its Netware and Linux technologies, with a roadmap meant to transition users off of Netware-based server kernels and onto Linux-based platforms. This clearly isn’t resonating with Novell users, and it wasn’t enough to create the sea change in Novell’s business from Netware to Linux. With Red Hat and IBM as the leading examples, there is clearly money to be made in the enterprise Linux operating system market. Novell’s new CEO will just have to figure out a better way to do that.
