Novell turns its focus toward growth
When Ron Hovsepian was named chief operating officer of Waltham's Novell Inc. in November, investors were already calling for the ouster of then-chief executive Jack Messman. In June, Messman's critics got their wish, and Hovsepian got one of the toughest jobs in the software industry. Hovsepian recently spoke with Globe reporter Hiawatha Bray on how he expects to meet the challenge that defeated his former boss.
Q: What prompted the Novell board to oust Messman and put you in charge?
A: I was not in the board meeting so I don't know the flow of conversation. What was shared with me was what the company needs to do is accelerate itself.
What I translated that to is we've got to have a real good sense of urgency about what we're going to get done for our customers, what we're going to get done for our shareholders, and hold the proper level of delivery between those two dimensions.
We need the customers. They're the ones who are the lifeblood of the company. They make our shareholders happy. That allows us to then have the employees be happy. We don't get great customers and have great customer experiences without happy employees.
Q: Novell was once the world's dominant maker of networking software for desktop computers. Today, with its networking business ravaged by Microsoft, Novell struggles to reposition itself as a vendor of the popular open-source operating system Linux. But Novell so far hasn't announced any major strategic shifts. Aren't you continuing Messman's policies?
A: A lot of focus is being brought to it. The last six months I've been the COO, with a lot of focus around those things.
So the good news is, from a transitional standpoint, a lot of the agenda items have been getting more and more focus, since I've had an opportunity to serve in different roles.
Yes, some of these things are the same. It's now an acceleration of execution of what we need to get done.
Q: Are you planning to abandon any of Novell's current activities?
A: We have to be honest with what businesses are we really in. So last year we gave guidance to [Wall Street] under the full disclosure rules. We'd be about $50 or $60 million in revenue down. The reason why was to shut down some non-performing consulting businesses, and we moved away from some products that we just didn't feel were going to drive revenue. I will continue that pruning process. It's in the spirit of focus, not in the spirit of doing something bad to a particular product.
Q: Will any jobs be lost?
A: That possibility always exists any time you talk about productivity improvements. My goal is to get profitability, followed by revenue growth.
Q: Novell's new version of its SUSE Linux operating system has a new look that almost resembles Apple's Macintosh software or Microsoft's upcoming Vista operating system. It's gotten rave reviews. But is this Novell's last chance to become a Linux leader?
A: If you look at Unix, it came out in the '70s. It didn't really take off until the '90s. If you look at Windows even, that was in the 1981-ish timeframe.
They didn't really get to declare victory until the 1994-95 time frame. So when I look at the lifecycle of the operating system market, we're in the very early stages of that market lifecycle.
I believe there's a lot of runway in that market. It's very young. There's a lot of moving pieces that are still going to play out inside of this marketplace.
Q: But can Novell hold out long enough?
A: Absolutely. One, we've got over 50,000 customers. Two, we've got a very good financial position from the balance sheet perspective and an economic perspective. And then three, our products are doing nicely.
Linux product is growing over 20 percent. Those were the numbers last quarter. If you look at Distro Watch, we've been outpacing Red Hat the last four months by 30 percent.
As good leading indicators, I think that part feels very good to me.
