Boardroom Revolt Topples Novell CEO, CFO

In a move that had been presaged last autumn, Novell’s board of directors ousted CEO Jack Messman and CFO Joseph Tibbetts this morning. Ron Hovsepian, the company’s president and chief operating officer (COO), has been named CEO, while Dana Rusell, the current vice president of finance and corporate controller, will serve as the interim CFO while Novell hunts for permanent replacement for Tibbetts.

Early last year, the 66-year-old Messman indicated that he would not leave voluntarily, so it was no surprise that the board had to show him the door. Nor was it startling to see Hovsepian take over as CEO. He had been touted for the job for some time, and his experience and talent at operational execution helped position him for the promotion, which was undertaken by the Novell board to "accelerate the execution of our growth strategy and build value for shareholders."

Both elements have been sadly missing, as Novell, which acquired the SuSE Linux franchise in 2003, has fallen behind other Linux competitors and distributions, including current fan favorite Ubuntu, while suffering a protracted slump in its stock price.

Although execution might be the order of the, it appears Novell’s board acted belatedly and perhaps not as comprehensively as some shareholders might prefer. There are concerns that, aside from execution issues that have seen Novell drop the marketing and sales balls on the Linux front, Novell lacks a coherent strategic vision.

If the following statement from Thomas G. Plaskett, a director who’s been elected non-executive chairman, is any indication of current big-picture thinking at Novell, I’m inclined to agree with those who harbor concerns about the company’s strategic vision:

"The board concluded that a management change would be the best way to accelerate the execution of our growth strategy and build value for shareholders. Ron is the ideal choice to lead the company as we continue with our transition to Linux-based products and identity and resource management and leverage our unique support of mixed source environments."

That’s some transition, encompassing not only Linux-based products, but also identity and resource management, plus the supposed mastery "mixed-source environments," which presumably denotes any enterprise that runs proprietary and open-source software. What that statement really seems to be saying is that Novell’s board wants Mr. Hovsepian to get out there and sell all the stuff that Novell has agglomerated through its various mergers, acquisitions, and strategic contortions during the past few years.

Good luck with that, Ron, though I’m sure you’ll get a good severance package when you eventually fail to deliver the desired results from mixed product portfolio and a overall strategy that hasn’t come together.

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