EditorsAbout the SiteComes vs. MicrosoftUsing This Web SiteSite ArchivesCredibility IndexOOXMLOpenDocumentPatentsNovellNews DigestSite NewsRSS

02.27.09

Novell CEO Loots the Company: Receives Huge Bonuses for Failed Business

Posted in Finance, GNU/Linux, Novell, OpenSUSE, Ron Hovsepian, SLES/SLED at 2:02 pm by Dr. Roy Schestowitz

breaking the bank

Novell’s poor results are a subject that we covered last night. Talks about layoffs have begun to materialise. For example, we have:

For the quarter, Novell’s sales fell by 7 per cent to $214.9m and were hurt by a dramatic drop off in software license sales, which fell by 29.7 per cent to $28.3m. Services sales at the company fell even more dramatically, down 31.7 per cent to $27.8m, while maintenance and subscription sales helped offset declines a little by growing 5.8 per cent to $158.8m. Net income fell by 36.5 per cent, to $10.7m, and what is immediately clear is that if Microsoft had not extended its SUSE Linux coupon deal with a $100m extension last year and agreed to kick in $25m this quarter, Novell would be at a loss. Quite literally.

[...]

That’s exactly what Novell has said publicly it would do. But that is a net employee headcount change. The number of employees let go could be higher in one division or department if the company was also hiring in other divisions or departments. Novell has not said this is what has happened, but the persistent rumors of larger layoffs could be the result of such hiring and firing practices.

Ron Hovsepian, Novell’s president and chief executive officer, said that software license and services sales were both below expectations, and in a conference call with Wall Street analysts, he said that “the pipe fell apart” in the last two to three weeks of the quarter and warned that it could happen again.

[...]

Looking ahead, Hovsepian said that Novell was “investigating all opportunities to lower costs,” and that might mean more layoffs. (He did not use the L-Word).

Here is another new report.

Novell could axe jobs on falling demand

[...]

The company, based in Waltham, Massachusetts, should have a better idea of whether it needs to reduce its workforce later this quarter, Russell said today in an interview.

Hovsepian smiles

Wealth for the Hovsepians

An ongoing outrage right now is to do with those people who receive huge bonuses and public money even in the form of stimulus/bailout (i.e. public looting). They expect a form of socialism to rescue them from their own corruption. That only applies to managers of course — those who are managing themselves in unaccountable, private, unregulated tyrannies. They reward themselves for the utter failures which they are collectively responsible for.

Ron Hovsepian too is an example of this trend. According to this news report:

Information technology icon Novell, Inc. (NDAQ: NOVL ) fared poorly even in this economy: down more than 50% over the last 12 months. This didn’t stop CEO Ronald Hovsepian from getting compensation valued at almost $7 million for the year, with nearly $3 million of that in cash.

Who in their right minds are giving bonuses to failing/failed executives that are buying small, irrelevant companies while sacking employees (largely GNU/Linux engineers to begin with)? Here is additional information about Hovsepian’s personal gain, which has always seemed a tad suspicious, not just unfair.

We happen to have studied this and found out that Novell’s management recently embarked on luxurious vacations in Mexico just before dropping ‘the bomb’ (delivering the results). Novell is no exception in today’s tough economy, but some of its moves are outright irrational. Even its own employees are disturbed by it. For example, says one person: “Look at what Hubert Figuiere hinted at in his blog post as to Novell’s rudderless position. Acquisitions in Novell’s state and in the current climate and laying off employees? WTF?”

SUSE Down Sharply

Novell continued to deny large-scale layoffs, but as we stressed strongly, the company can't be believed. In fact, it already mentions this as a possibility (see Russell quote above). Novell’s layoffs are inevitable because its business diminishes too quickly and even SUSE — supposedly Novell’s area of great growth — is “down sharply”. ZDNet’s editor states:

Novell’s fiscal first quarter results were a mixed bag and Linux invoices fell sharply as the company failed to sign big deals.

They are dependent on Microsoft of course, by their own choice.

Matt Asay’s analysis is good (he used to work at Novell and he has friends there). The headline is alarming though.

Novell puts Linux on sale as earnings disappoint

[...]

That should be Novell’s concern, not Microsoft’s. If Microsoft feels any compunction to assist Novell, it’s certainly not to help prop up Linux, but rather to try to hurt Red Hat. This isn’t the basis for sound, long-term strategy.

And guess what? It’s not working.

[...]

That environment hasn’t been good for Novell’s overall business, but it’s helping fuel Red Hat’s. Perhaps Novell should be looking to Red Hat, not Microsoft, for clues as to how to rejuvenate its business. The industry could use Novell as a stronger Linux player. Microsoft won’t be the source of that strength.

So the big winners here are probably Novell’s rivals in the GNU/Linux universe. Those are the companies which don’t pay Microsoft for GNU/Linux and don’t market themselves using software patents and intimidation.

Here is yet another article about the end of BrainShare [1, 2, 3], which symbolises Novell’s demise.

Next month would have marked the one time in the year thousands of technology professionals make the trek to Salt Lake City to figure out whether Novell has the wherewithal to be the world’s most successful blend of open source and proprietary technology. Except that this year, for once, the global economy as a whole is actually doing worse than sales of Open Enterprise Server. There won’t be a BrainShare 2009, and who knows about next year. We’re bracing for what gets cut next.
I found BrainShare an extremely worthy event the last time I went there, but the industry, suffice it to say, will survive its loss.

More Financial News

Associated Press (via Forbes) has the report “Novell profit drops 36 pct, still beats Street” and MarketWatch published “Novell’s first-quarter net income slides to 3 cents a share” (also in Fox Business). Reuters just states that “Novell Q1 earnings fall.” Novell must tell its investors what it intends to do next. This debate is private.

No Value

“Our partnership with Microsoft continues to expand.”

Ron Hovsepian, Novell CEO

Share this post: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Digg
  • del.icio.us
  • Reddit
  • co.mments
  • DZone
  • email
  • Google Bookmarks
  • LinkedIn
  • NewsVine
  • Print
  • Technorati
  • TwitThis
  • Facebook

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

What Else is New


  1. Microsoft Loves Linux to Death and Still Tries to Kill GNU/Linux

    Microsoft's relentless attacks on GNU/Linux and Free software in general (even if it runs on Windows) are so evident that claims of 'love' remain laughable at best (if not infuriating)



  2. Censorship, Self-Censorship and Intimidation Now the Modus Operandi at EPO

    The European Patent Office has ceased even trying to pretend that it respects human rights, including the right to free speech



  3. Patent Practitioners: "The Unitary Patent Might be Able to Open the Floodgates for Software Patents in Europe"

    The EPO-backed Unitary Patent scheme threatens to bring software patents to Europe and along with them a lot of patent trolls from all around the world (especially the United States)



  4. Microsoft Lies About Vista 10 and Increases Microsoft Surveillance (Even Beyond Vista 10 and Into Android, Vista 7/8)

    Windows surveillance expands retroactively, making its way into platforms other than Windows and also expanding to predecessors of Vista 10



  5. Another Suicide at the EPO, Fifth by Our Count

    Yet another EPO member of staff has just committed suicide, leading to the inevitable question: how many people need to die before Battistelli and his minions are out of the Office for good?



  6. Links 27/8/2015: ownCloud Desktop Client 2.0, Red Hat Downgraded

    Links for the day



  7. Microsoft-connected Mesosphere Threatens to Eliminate Free Software in the Datacentre

    Hiding behind a misleading 'open' label while actually backed by Microsoft (and based on new rumours may join Microsoft), Mesosphere wishes to eradicate Free and back doors-free software in large datacentres hosting a lot of physical and virtual servers



  8. Microsoft Aggression Against GNU/Linux Amid Vista 10's Failure

    A look at the recent assault on GNU/Linux in Munich and the likely cause for this assault (in such a timely fashion, too)



  9. Message to LinuxCon Regarding Microsoft: “It is Necessary to Get Behind Someone in Order to Stab Them in the Back.” -Sir Humphrey Appleby

    Jim Zemlin, executive director of the Linux Foundation, helps Microsoft gain influence in the Foundation after payments are received



  10. Market Share Estimates Confirm That Vista 10 Failed in a Major Way

    Confirmatory evidence that Vista 10 is failing in the market about a month after its much-hyped (paid coverage) release



  11. When Microsoft, the Master of Patent Trolls, Complains About Trolls

    Possibly the world's biggest patent abuser and monopolist, which also creates many patent trolls (including by far the biggest one), takes on a far smaller abuser in Court



  12. Letter Signed by Two German Officials Becomes a Microsoft Weapon of Propaganda

    Microsoft and its minions refuse to leave Munich alone, even though the vast majority in Munich are perfectly happy with Free/libre software



  13. Links 25/8/2015: Linux Kernel 4.2 Final RC, KDE Ships Plasma 5.4.0

    Links for the day



  14. Sabine Pfeiler and Otto Seidl Should Take Note as Russia -- Like China -- is in the Process of Banning Microsoft Windows for Security Reasons

    A look at a strange suggestion, signed by Sabine Pfeiler and Otto Seidl, who suggest going back to Microsoft which is basically a spyware company now



  15. Microsoft Windows Leads to Espionage and Blackmail: Latest Examples

    Another news overview, detailing high-profile examples of high-cost Windows deployments (including the cost of litigation and settlement)



  16. Links 23/8/2015: BcacheFS Benchmarks, Blackphone 2

    Links for the day



  17. Links 22/8/2015: Chromebook Gains, GNOME 3.18 Clues

    Links for the day



  18. Alice v. CLS Bank (the Alice Case/§101) Continues to Crush Software Patents in the United States

    Patent scope in the United States continues to be narrowed down as more software patents get their wings clipped



  19. Company of Hype and 'Fanbois' Continues Its Patent Attacks on Android/Linux

    Apple's attacks on Android (using bogus patents) may be soon be escalated to the US Supreme Court (SCOTUS)



  20. EPO Corruption of Patent Boundaries: Business Methods and Algorithms Patented

    How the European Patent Office (EPO) not only turns a blind eye to European law while patenting or granting patents on software but also openly advocates this now



  21. Who's Obsessing Over Patent Trolls in Latest 'Reform' Efforts? Larger Patent Trolls Such as Xerox

    Response to claims that the patent problem is being tackled by focusing on patent trolls and their favourite courts in the Eastern District of Texas



  22. Links 20/8/2015: Fedora 24 Plans, Ubuntu Phones in India

    Links for the day



  23. Blackmail and Lies From the Press and the Government of New Zealand Attempt to Sell to the Public a Deal That Broadens Patent Scope

    Corporate conquest or takeover of New Zealand culminates in empty promises from government officials and blackmail against citizens of New Zealand, especially the country's dairy industry



  24. Vista 10 Turns PCs Into Zombies: Microsoft to Remotely Delete Software From Windows, Like Amazon Deleted Books From Kindle

    Microsoft allows itself to remotely delete software from Vista 10 (not just Microsoft's software), as revealed by the mainstream media not too long after the failed launch (poor adoption so far)



  25. Black Duck Still Destroying, Lying, Rewriting History

    Black Duck is still carrying water for Microsoft and pretends to be working for 'Open Source', despite doing it much harm and doing nothing that is actually Open Source



  26. Ashley Madison Disaster Apparently the Fault of Microsoft Windows

    New reports serve to show that Ashley Madison's data which got leaked includes complete dump of corporate Windows passwords



  27. After OOXML Propaganda, New Assocham Propaganda Calls for Back Doors, Spyware and Other Malicious, Self-defeating Traps Inside Government of India

    Assocham is showing its true colours yet again, lobbying for the interests of foreign companies and endorsing serious abuse or compromise of India's national sovereignty



  28. Links 19/8/2015: LinuxCon Everywhere

    Links for the day



  29. Links 18/8/2015: Linux 4.2 RC7, IBM's LinuxOne

    Links for the day



  30. Patents Roundup: Patent Reform, Google's 'Startups' Ploy, JDate, Fitbit, Cisco, and UPC in the UK

    A collection of news stories about patents, accumulated over the past week or so


CoPilotCo

RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

CoPilotCo

Recent Posts