Novell Changes Leadership

Hovsepian becomes president, but beleaguered Jack Messman stays on as CEO.

Novell announced on Tuesday that the previous day its board of directors had promoted Ron Hovsepian, executive VP and president of global field operations, to president and chief operating officer of Novell.

Hovsepian will have direct worldwide responsibility for product development, marketing and field operations, which includes sales, consulting and technical services.

He also, along with former president and still the CEO and chairman of the board, Jack Messman, occupies the newly created "Office of the CEO."

Hovsepian is a relative newcomer to Novell Inc.

He arrived at the Linux company in 2003 in the role of president of North America. In addition, he took over responsibility for transforming the underachieving global field operations in May 2005.

He had, however, already given up his role as president for EMEA (Europe Middle East and Africa) in early October.

At that time, Novell appointed Thomas Francese, who had been the vice president of IBMs EMEA software group, to that position after two weak quarters in EMEA.

Previously, Hovsepian had worked at IBM in management and executive for approximately 17 years.

While there, he rose to worldwide general manager of IBMs distribution industries, managing global hardware and software development, sales, marketing and services.

"Rons results across our North American field organization are proof that he is a strong leader for Novell," said Messman in a statement.

"Now that the transformation of our field organization is well under way, it is time for Ron to extend his leadership capabilities across the entire organization. I am confident that, as president and COO, Ron will deliver strong results for our customers, employees and shareholders." Messman said.

His advancement didnt surprise Stacey Quandt, research director for the Aberdeen Group.

"Given his expertise in operations, it is no surprise that he would be promoted to the position of president and COO," said Quandt.

"Since joining Novell, Ive remained convinced that we have a tremendous opportunity to provide leadership in the market as organizations around the globe embrace open standards and open source as a way to improve their operating results," said Hovsepian.

"Im grateful for the strong support we continue to receive from customers and partners, and I am confident that our employees will deliver value to our shareholders," Hovsepian said.

The stockholders, especially Blum Capital Partners LP, however, have become impatient with Novells progress.

Blum, with the support of other stockholders, wants Novell to reduce costs, divest itself of non-core businesses; become a leader in Linux and identity management through joint ventures and selective acquisitions; and optimize its capital structure to maximize shareholder value by buying back stock.

Messman has resisted these moves even as Novells profits dropped.

The Novell board did approve a share repurchase program for up to $200 million of Novell common stock, but this was far less than Blum had wanted.

/zimages/1/28571.gifClick here to read more about Novells share repurchase program.

Sources close to the Waltham, Mass.-based company have also said that it would lay off up to 20 percent of its employees. This, however, has still not officially been confirmed.

Hovsepians promotion, which came along with Messman losing one of his titles, may be a sign of changes to come.

Quandt sees his advancement as "a potential harbinger of change rather than more of the same. Hovsepian has an opportunity to re-evaluate Novells solution portfolio, and if he does so successfully, he could achieve much needed revenue goals and profit growth for the company."

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