Bonum Certa Men Certa

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

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

Recent Techrights' Posts

The Register Bill
The Register MS - putting the "MS" in your centre of the universe
Analogies for "Memory Safety" in Rust
Don't worry, it's Rust! It can do anything!
Nobody Denies That SecureBoot Will Cause Problems After September 11
Not even Microsoft
Gemini Links 06/09/2025: Infinite Scrolling and Posting from Emacs
Links for the day
Links 06/09/2025: GitHub Meltdown Over Slop, "U.S. Jury Says Google Should Pay $425 Million in Privacy Lawsuit"
Links for the day
Despite Its Severe Financial Problems Gnome Foundation Inc Paid Rosanna Yuen Over 100,000 Dollars Last Year
maybe relocation should be considered
The "Left" and the Right"
It poisons everything
Mozilla and Rust Are Not Leftists
they're part of the mass consumerism machine
Disposable to Microsoft
There is an extensive set of people who got used by Microsoft, only to be thrown away a month later or a year later or a decade later
The UEFI 9/11 - Part VII - This Coming Week Many PCs Will Refuse to Boot "Linux" (Because of Microsoft's Expired Certificate)
The real solution is, disable "secure boot" or "SecureBoot" while it's still possible. [...] Just like submarine patents, a lot of this problem was "hibernating" for a while
The Thing Nobody in Red Hat Wants to Talk About Openly
There is a real sentiment or worry among Red Hatters, Europeans and Americans in particulars (because of higher salary expectations)
Slopwatch: Small Parade of Fake News About "Linux" and Scams Borrowing the Name (or Word) "Linux"
In practice, LLMs are a risk
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, September 05, 2025
IRC logs for Friday, September 05, 2025
Genini Links 05/09/2025: Community, ROOPHLOCH, and PITkit
Links for the day
Links 05/09/2025: Vaccine Sceptics Poison the Well, Two Exploited Vulnerabilities Patched in Android
Links for the day
Gemini Links 05/09/2025: Logitech Lift and DIY Gemini Servers
Links for the day
Links 05/09/2025: Sainsbury's Caught Spying on In-Store Shoppers and Microsoft "OpenAI is Using Legal Threats to Harass its Critics"
Links for the day
BASIC Predates Microsoft by Over a Decade, Microsoft-Controlled Sites Like The Register MS Don't Want You to Know This
The state of the media is really bad when it relies a lot on oligarchs' money and is appointing editors who are working for oligarchs
Brian Kernighan, "Only Third to Dennis Richie and Ken Thompson" (UNIX), Agreed With Someone Who Said Rust Was Just Hype, Should Not Replace C
17 hours ago
Reminder: Microsoft's "Secure Boot" Certificate for "Linux" Will be Expired in One Week
Many PCs won't manage to 'rotate' to another certificate
"Many of the Red Hat Employees Are Still Looking for Work"
Shame on IBM's CEO
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, September 04, 2025
IRC logs for Thursday, September 04, 2025
Microsoft Started With Code Literally From The Trash, Nothing Has Improved Since
The reality is, there are systems and code that are reliable. But they're not Microsoft's.
Hypothesis That New McKinsey/Microsoft Executive Inside Red Hat Will Outsource Research and Development Operations to India (Like They Do in IBM)
IBM is floundering
Slopwatch: Scams, Fake Articles About "Linux", Plagiarism, and Worse
Perhaps some time soon the LLMs or the "Big LLMs" will run out of money (to borrow) and go offline, leaving those slopfarms in a tough place
Gemini Links 04/09/2025: Means of Production and Rusting Out
Links for the day
Links 04/09/2025: Science, Hardware, and Eyes on China
Links for the day
Gemini Links 04/09/2025: Digital Minimalism and Social Control Media
Links for the day
IBM's GNU/Linux Divestment, Based on Hard But Anecdotal Evidence (IBM Fails to Recognise How Much Money It Made and Can Still Make From "Linux")
Love us or hate us, a lot of what we've been saying about Red Hat under IBM turns out to be rather accurate
Links 04/09/2025: Massive Microsoft Staff Cuts (Barely Reported), "Strange Conspiracy Theory Is Reportedly Spreading Inside OpenAI"
Links for the day
Activists Can Win, But Keep an Eye on the Ball and on the Trophy
GitHub is dying, it was a loss-making trap, not free hosting
Gemini Links 04/09/2025: Katrina Remembered, Distracted Driving, and Virtual Economics
Links for the day
At This Point It's No Longer Matthew Garrett But People Who Fund Matthew Garrett (or Companies That Fund His SLAPPs Against My Wife and I)
The only thing worse than misogynists are misogynists who fail to respect other people's right to go on holiday
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, September 03, 2025
IRC logs for Wednesday, September 03, 2025
The UEFI 9/11 - Part VI - This Serious Harm Was Planned for Over a Decade, Not an Accident or Merely Some Misfortune
The term "Serious Harm" is legally meaningful here
GNOME Unfit for Diversity and Inclusion
GNOME's leadership is using "bad words"
Brodie Robertson Addressing the Recently-Discovered Comments
Most people probably knew nothing about this until he wrote a response
Red Hat QA Team "Had Shrunk by Half Over the Past Year." (After IBM Divestment)
If Red Hat's workforce is being moved to the East, then RHEL can become a national security problem
Slopwatch: "Open Source" and "Linux" News Faked, Made by Bots and Entered Into Google News
Spam combined with slop about "Linux" has entered Google News