Novell loses another SuSE chief

Just two weeks ago, at the BrainShare event in Salt Lake City, Novell seemed to be riding high. After all, not only had the company convinced thousands of “open source” and “free software” fans to spend multi-hundreds of bucks just to attend the show but it also had those folks jumping out of their seats to give a standing ovation for the introduction of SuSE Linux Enterprise Desktop 10. I haven’t heard of that kind of reaction to a desktop operating system since Windows 95 was introduced a dozen years ago.

All that good feeling made last week’s double whammy – on both personnel and fiscal fronts – that much harder to take. As always, it seems, Novell takes you to the heights and then stands by helplessly as you’re slammed back down to earth.

The last of the major players who came to Novell with the acquisition of SuSE, Juergen Geck, former CTO of the Linux company, left Novell last week.

While it’s said his departure was “amicable,” it completes a series of departures over the past 10 months. Richard Seibt, former CEO of SuSE, left last May, SuSE channel chief Petra Heinrich resigned in July and SuSE co-founder Hubert Mantel left Novell in November, following a corporate restructuring that claimed hundreds of jobs – many of them in SuSE’s Nuremberg headquarters.

At the time, Mantel said SuSE was “no longer the company I founded”. This leaves Novell’s Linux firmly in the hands of Nat Friedman, vice president of Linux desktop engineering, and Miguel de Icaza, vice president for developer technologies, both of whom came to Novell from Ximian. And while both are well respected in the open source community, there is some resentment lingering among the SuSE faithful.

The other bad news was Red Hat’s announcement of its fourth quarter and year-end financials which showed, again, that not only is Red Hat the leader in Linux revenue and profit, but that it is running rings around Novell in that regard.

Red Hat reported quarterly revenue of $78.7 million with a net income of $27 million. In contrast, Novell’s recently announced first quarter results (approximately the same time period as Red Hat’s fourth quarter) showed Linux-related revenue of $56 million with net income a measly $2 million. It appears that Red Hat has discovered how to generate revenue from Linux, something Novell is still searching for. Profitability is something else, though. It’s a combination of the costs associated with generating that revenue as well as the costs associated with the almost constant turmoil and restructuring that appears to be the order of the day at Novell recently. Maybe the Novell braintrust in Waltham can turn this around – but we aren’t seeing many signs of it just yet.