This comes days after Novell investor Blum Capital Partners LP investment firm publicly revealed it was unhappy with Novells current direction and made several recommendations including a stock buyback plan.
Novells earnings fell short of expectations in its latest quarter.
For the quarter, reported in late August, Novell reported revenues of $290 million, compared to revenues of $305 million for the third fiscal quarter 2004.
The Blum partnership also wants Novell to improve its bottom line in other ways.
First, it wants Novell to reduce costs by downsizing and divesting itself of some equipment, such as the companys two corporate planes.
The group also wants Novell to divest its "non-core businesses," such as ZENWorks, GroupWise and Cambridge Technology Partners.
Finally, both Blum and Maynard want Novell to become more of a leader in Linux and identity management through joint ventures and selective acquisitions.
Novell will repurchase the stock from time to time on the open market at the discretion of management.
Repurchases may also be made under a Rule 10b5-1 plan.
Rule 10b5-1 plans enable companies to repurchase shares in situations in which it might otherwise be precluded by insider trading laws.
The repurchase program may be suspended or discontinued at any time.
At $200 million, the buyback is far less than Blum had requested from cash-rich Novell.
Blum had written that it had found itself "confounded" as to why "Novell has yet to implement a major share repurchase program of $500 million."
"Our stock buyback is just one of the elements of a plan aimed at enhancing shareholder value and securing Novells future as an important provider of solutions to the IT market," said Jack Messman, Novells chairman and CEO in a statement.
Novell had previously announced plans to cut some employees in the fourth, current, quarter.
The Linux company also plans to build a Linux software stack with its partners such as SugarCRM.