Update: Novell board ousts CEO Messman

COO and President Ron Hovsepian will take over CEO duties

By James Niccolai

June 22, 2006 12:00 PM ET

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IDG News Service - Novell Inc.'s board of directors ousted Chairman and CEO Jack Messman and Chief Financial Officer Joseph Tibbetts in a move designed to accelerate the company's growth, Novell said today.

Ron Hovsepian, Novell's president and chief operating officer, was made CEO in addition to his existing duties. Dana Russell, Novell's vice president of finance, becomes interim CFO.

The changes are effective immediately. Messman, 66, will remain on Novell's board until the end of October, the company said. Hovsepian, 45, was also made a Novell board member.

Ron Hovsepian

The board concluded that the management changes would be "the best way to accelerate the execution of our growth strategy and build value for shareholders," Novell said in a statement on its Web site.

In a conference call this morning, the company shed no further light on Messman's or Tibbett's departure. Thomas Plaskett, a Novell director who takes Messman's job as chairman, said only that the company is "genuinely appreciative" of their contributions. The departing executives offered no comments in Novell's press statement.
In an interview, Hovsepian said only that Messman's departure was a "formal separation."

Messman took over as CEO from former president and CEO Eric Schmidt in March of 2001, when Novell acquired IT services and consulting firm Cambridge Technology Partners Inc., where Messman had been president and CEO.

Novell's NetWare, once the dominant network operating system, has seen its lead erased by Microsoft Windows. Under Messman's leadership, Novell set out on a new strategy several years ago to build a business based on the open-source Linux operating system, acquiring German vendor SUSE Linux in 2003.

It has failed to make big inroads against Linux market leader Red Hat Inc., however. Cost-cutting efforts helped Novell turn a profit of $3.1 million in its most recent financial quarter, from a loss of $15.7 million a year earlier. But revenue for the period declined, to $278 million from $297 million.

The company will continue to focus on its current product strategy, notably Linux and NetWare, identity management, data center management and security products, Hovsepian said. "As CEO, my top priority is to accelerate the speed and urgency behind our transition to Linux-based products," he said on the conference call.

The company will step up its investment in management tools, potentially through some acquisitions, Hovsepian said in the interview. "Our enterprise Linux story is very good. ...We now have to get a richer management story to help customers, so we'll be filling our hand out there," he said.

The company will also try to fix weak areas by increasing the amount of maintenance revenue it generates, for example. Novell hasn't required customers to register with Novell when they bought past versions of SUSE Linux Enterprise Server through channel partners. That will change when version 10 ships, making it easier to sell follow-on services, he said.

Reprinted with permission from

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