Bonum Certa Men Certa

On Novell and Turnaround

Chicago skyline



Summary: Corrective remarks about a new paper from the University of Michigan

THE Mad Hatter has just sent us a new paper [PDF], describing it as "a hot one -- paper which has Novell down as a "turn around success", which was a real surprise to me. The paper is about how the North American big 3 could increase market share and profits by building more fuel efficient cars."



"This is the exact wording", he added.

"Fixing Detroit: How Far, How Fast, How Fuel Efficient", a report by the University of Michigan concludes that improving fuel economy would be very profitable for Detroit automakers.


"This is interesting," adds The Mad Hatter, "The same arguments could be made about Microsoft as are being made about Chrysler/Ford/GM, in that with Vista and Vista 7 Microsoft is ignoring its customers, and not producing what the customers want. This is reflected by the growth of Linux (and Microsoft’s panicked efforts to control or stop it) and the growth of Apple."

“...Novell, like Sun, better serves as an example of a company that failed to make a turnaround happen.”There is something more than debatable in the suggestion that Novell experienced a "turn around success". It is reminiscent of a very recent book that wrongly describes Microsoft as a company that changed its behaviour.

We take an issue with the hypothesis in this paper where Novell is used as an example because Novell, like Sun, better serves as an example of a company that failed to make a turnaround happen. Jack Messman failed miserably and Ron Hovsepian just sold out to a competitor in exchange for a temporary supply of cash and a lifeline that came at a considerably high cost. Now that Novell is likely to be split apart [1, 2, 3, 4, 5] it does not seem like a bright idea, not in retrospect anyway. Like with EDS and other acquired companies, Novell will possibly sell the weak parts of the company and let that buyer do the layoffs.

All in all, the paper in question [PDF] seems like interesting work which is worth reading. It came from the prestigious University of Michigan, which is one of the highest-ranking public universities in the United States.

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