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. Links 22/7/2019: SUSE Gets CEO From SAP, MuQSS 0.193 Scheduler, VLC Bug

    Links for the day



  2. Links 22/7/2019: Linux 5.3 RC1, GNU Hyperbole 7.0.3, DebConf19

    Links for the day



  3. Don't Kick the Puppy That is Suing Linux Using Patents While Bribing Officials, Threatening Critics and Hijacking the Linux Foundation

    Jim Zemlin is protecting the "puppy" (to use his own analogy), Microsoft, while getting paid about/almost a million dollars per year (about the same amount of money Microsoft pays his PAC)



  4. EPO Gradually Becoming the World's Most Permissive (Low Patent Quality) Patent Office by Consciously Violating the EPC

    Today's European Patent Office is making innovation a lot harder for Europeans; it limits what people can freely do, e.g. what computer code they can implement, and only lawyers are loving it



  5. Tweets Are Not Journalism But Succinct Unverified Hearsay; Time to Treat Them Accordingly

    Childish public discourse can be attributed to SMS-sized nonsense posted in a hurry by career provocateurs, not grown-ups (becoming a waste of time for actual reporters who spend hours/days correcting the record after these go 'viral'); this is killing responsible journalism, necessitating a rethink



  6. The Web is Not JavaScript

    Simple sites respect visitors; rather than and instead of exploiting them or passing burdens to user-end browsers we should focus on text and links — the very core components of hypertext as opposed to bells and whistles



  7. Links 21/7/2019: DXVK 1.3.1, GameMode, Mutter 3.33.4

    Links for the day



  8. Links 20/7/2019: Weston 7.0 Alpha, Nageru 1.9.0

    Links for the day



  9. Companies That Collapse Because the European Patent Office (EPO) Gave Them Fake Patents in a Hurry

    False hopes and false promises won’t do any favours to European Patents, whose legal certainty suffers because Campinos and Battistelli measure nothing but ‘production’ (quantity) rather than quality of patents



  10. Slack Committed a Very Major Crime That Can Cost Many Billions If Not Trillions in Damages for Years to Come

    The inevitable has happened to Slack, which no longer deserves to exist as a company; moreover, the people who ran the company must be held criminally accountable



  11. Demand for European Patents Will Continue to Decrease If a Lot of European Patents Turn Out to be Invalid, Worthless

    The EPO's abandonment of patent justice and quality (in pursuit of so-called 'production' targets) is likely to doom the Office as the whole or render it vastly less relevant to the rest of the world



  12. 35 U.S.C. § 101 Still in Tact in the United States and Software Patents Rot Away

    The United States, where the number of granted patents decreased last year, becomes more productive; there are more signs that patent maximalism (patent litigation, patent scope etc.) has receded



  13. Links 19/7/2019: Deepin 15.11 and GNU/Linux Back on GPD MicroPC

    Links for the day



  14. Violence is Not Free Speech and Laws Exist Against Violence

    Free speech is certainly under attack and the debate is being framed within the context of Nazism; but this overlooks the fact that there are actual death threats and calls for genocide in the mix



  15. Links 19/7/2019: Oracle Linux 8.0, Latte Dock 0.9 Beta and PCLinuxOS KDE Darkstar 2019.07

    Links for the day



  16. Why Does Jim Zemlin Publicly Congratulate Microsoft?

    The signs aren't particularly encouraging when one considers that the leadership of the Linux Foundation is a fan of Microsoft and sometimes connected to Microsoft



  17. 2 Days Later (Case in Progress) and Still Media Silence About G 2/19

    The very legitimacy of years' worth of rulings and the EPO's abusive attacks on judges are under the microscope; but the media isn't paying any attention, perhaps deliberately



  18. The 'Linux' Foundation is Acting Like a Microsoft ISV Now, Commitment to Linux and FOSS Deteriorates Even Further

    The Linux Foundation has just announced a new Microsoft-funded initiative that's pushing GitHub and CLAs (passing copyrights on code to corporations)



  19. Links 18/7/2019: OPNsense 19.7, Krita 4.2.3 and KDevelop 5.3.3 Released

    Links for the day



  20. Index: G 2/19 (Enlarged Board of Appeal, EPO)

    G 2/19 (Enlarged Board of Appeal, EPO)



  21. EPO Looney Tunes – Part 4: G 2/19 - Faites Vos Jeux…

    "Josefsson needs to bring in the “desired result” for his political masters in the Administrative Council if he wants to be in with a chance of reappointment."



  22. Media Not Interested in G 2/19, Which Demonstrates Patent Justice is Nowadays Impossible at the EPO

    The EPO spreads patent injustices to other countries and courts; the media is miraculously enough not interested, almost as though there's a coordinated blackout



  23. Librethreat Database Updated

    Database which keeps track of variants of attack vectors on Free/libre software now includes two more forms of threat



  24. A Look Back (and Forward) at Friendly Programming

    Historical perspective on computer languages and how to do better



  25. Red Hat's Freedom Reduced to Just Online Partner Enablement Network (OPEN) and Microsoft as a Close Partner; Canonical's Ubuntu Just an 'App' for Windows?

    Free software is being snapped up by proprietary software giants and patent bullies that treat it as little more than an 'add-on' for their proprietary offerings



  26. Linux Foundation Apparently Celebrates Sysadmin Day With a Microsoft Windows Site!

    The Linux Foundation shows ‘love’ to actual GNU/Linux (the real thing) by apparently rejecting it and badmouthing it



  27. EPO Looney Tunes – Part 3: The Legal Line-up for G 2/19

    The deck appears to have already been stacked for G 2/19, a decision on EPO judges' exile to Haar (veiled disciplinary action/collective punishment by those whom the judges are supposed to 'oversee')



  28. Links 17/7/2019: VirtualBox 6.0.10 and Mageia 7.1 Releases, Mint Betas

    Links for the day



  29. Links 16/7/2019: Btrfs Gets 'Cleaned Up', Clonezilla Live 2.6.2-15

    Links for the day



  30. EPO Looney Tunes - Part 2: The “Difficult Legacy” and Its Dark Historical Shadow

    Assuming that he was informed, then it seems fair to say that Battistell’s little “joke” at the expense of the Boards was in very bad taste


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

Recent Posts