Novell is expected to initiate a major round of layoffs that could cut 1000 or more jobs in an attempt to restore the server software company’s financial strength, according to employees familiar with the plan.
Major Layoffs Expected at Novell
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20% is a significant chunk. Too bad that Novell didn’t get into the linux game earlier. Didn’t Ransom Love petition them to do something with Linux back in ’96 or so? Anyway, everybody knew the transition would be rough.
Actually, it’s too bad that Novell didn’t see Microsoft as more of a potential threat. They had (and still have) some great technology and they let that blind them throughout the entire Windows 2000/Active Directory product roll-out. They lost significant market share to Microsoft at that point.
Oh, and Novell is hardly a new comer to Linux. They had both client and server side NetWare (including full NDS support) working under Linux through a partnership with Caldera.
:/ It takes more than cuts of that nature to move a failing company into a successful model.
Whenever a company repeatedly shrinks in size and gives the excuse it is to return them to profitability it is a good sign they are dieing. Each time you cut your talent the company doesn’t get tigher and run more smoothly. The remaining employee have to pick up the slack and they get overworked and they don’t work as efficiently. Just keep repeating their new catch phrase, “We don’t just sell Netware anymore — we are now a linux directory service company! Yah, right… Keep smoking the crack and reality will look all nice and blurred.
Wrong: Case Study :: Apple.
Post NeXT merger: Cut 5,000 jobs to restructure company.
Since: Rehired and then some.
They’ve been a player for a long time now. This attempt to reinvent themselves with Linux through the acquisition of SuSE and Ximian, makes you wonder.
look at redhat. regardless of what you may think of them as a contributor to the community (although they are a very good one), they simply have a better business model.
1. they are not tied to a legacy product and market the way novell is with its old product line.
2. they offer one core product – RHEL, and the support issues are where they go into fine-tuning per customer needs. novell has suse and its own branded linux. this confuses customers. don’t try providing your own rationales in replies, just face it, it is confusing for one company to offer two parallel competing products.
3. redhat made the move to differentiate fedora before opensuse. with ubuntu coming on strong, who is left to bother with opensuse?
4. redhat is making better decisions about what communities to support. this is a trivial issue of course, but i just don’t see evolution paying off for novell, nor is mono. i think the ximian products have hit with a thud no matter how much hype nat and miguel throw behind them. sorry miguel, no one really cares about .net compatibility, because the next great platform was the web itself (see:google, flickr, delicious, etc etc), not a runtime/api.
Well, in reply to #4, I think Novell has an opportunity to upgrade customers from Outlook and Exchange to some sort of Evolution/Thunderbird client and mail server Linux solution. If they properly invest their time and resources…
But although they understand that Linux is good they don’t seem to have much of a clue about what makes it good. At least from my perspective, the first thing I would have done is create an opensuse distro and get to ripping out all the things about suse that I never liked. Port all Novell’s previous tech, or any of it that’s still relevant, to Linux and quickly phase out those old products and increase support costs for customers that choose not to upgrade. Then invest all those employee resources into making their Linux more customer friendly, easier to work on and manage (read: automation, automation, automation, and some scripts),
easier to learn and do everything in my power to get the word out, give it away, give hardware or pay bounties or royalties to significant contributors,
lay off the old people who don’t like change, force everyone to take a 4:20 break, etc.
I would do things right. Plus I would be very open minded about suggestions, since I’m sure I missed a few important details. We all do.
>> I think Novell has an opportunity to
>> upgrade customers
>> from Outlook and Exchange to some sort of
>> Evolution/Thunderbird client
this is an open issue, but i think the next major move in email, as with many other functions tied to a platform, is to get them on the web. personally i use gmail as an aggregator of all of my work and personal mail. i know many people who are forwarding and relaying from webmail simply because they are on the move constantly, and would much rather trust a server farm than their laptop. webmail is a nontrivial market – yahoo and google have nearly 100 million regular webmail users. if they can provide real business-class functionality to users, they will change the software market.
for those who insist on staying on a client, i suspect they will likely just stay with outlook since it provides the exchange hooks they likely have grown to love. i don’t use outlook but i have not heard a compelling argument why those who use it and don’t mind it would switch. for those who just don’t like microsoft, they are likely already using thunderbird on windows.
>> lay off the old people who don’t like change, force
>> everyone to take a 4:20 break, etc.
well the issue is that some of those old-timers are bringing in a lot of money via support contacts that are more or less easy money at this point. novell would be stupid not to milk that cash at this point, they already made the investments needed.
the more salient point is what the heck are the ximian guys really doing to put money in the bank for this company? sure they do great pr with their blogging etc, and they have a great pedigree, but once again, i offer that their fundamental vision of mono as a platform is a flop. where is this future where everyone gives a poop about .net apps? it never played out, webapps killed it.
the web as a platform is going to hurt all of the OS-based platform companies to some regard, because frankly your OS really doesn’t matter that much any more, which is the entire point of the network computer built on open standards.
IMHO web based email is okay so long as you don’t need any integration – be it with your Exchange/Groupwise server, your desktop applications, your SharePoint portal, your CRM or ERP software, etc. Outlook and to some extend Evolution have the ability to do this, while Hotmail, Gmail etc do not. In a business environment, a web-based access point for internal systems (Exchange & GroupWise both do this well) is more realistic at this point.
“Well, in reply to #4, I think Novell has an opportunity to upgrade customers from Outlook and Exchange to some sort of Evolution/Thunderbird client and mail server Linux solution.”
Many wouldn’t consider this an “upgrade”. Exchange and Outlook are a rather formidable combination.
Longtime business users of Outlook are not going to part with it for a lot of reasons other than e-mail. Outlook is almost a way of life for some users, and thats not going to change anytime soon.
I agree Novell has problems, but I don’t agree with a lot of your reasoning.
1. they are not tied to a legacy product and market the way novell is with its old product line.
Unavoidable. This isn’t a problem, it’s an opportunity, one that Novell is actually taking advantage of. Unlike Red Hat, Novell has a fairly substantial legacy customer base, and over time they will try to move these people over to newer (read: Linux) offerings. It’s happening already. Whether they will be able to hold on financially is another matter.
2. they offer one core product – RHEL, and the support issues are where they go into fine-tuning per customer needs. novell has suse and its own branded linux. this confuses customers. don’t try providing your own rationales in replies, just face it, it is confusing for one company to offer two parallel competing products.
Novell is in a unique situation – SUSE has its own brand awareness, and to simply ditch it would confuse existing customers. Thus the blend we have at present – Novell Linux “powered by SUSE LINUX”. Not great, but a pretty good attempt – IMHO – to differentiate.
Red Hat’s problem with Fedora is that it isn’t really capable of being a stable OS for SOHO users; it lacks commercial software out of the box and can be rather unstable; in addition, there are no official support resources. SUSE has better features – commercial plugins, NTFS support, a knowledgebase – and can continue to stand on its own.
Over time, Novell should consider dumping its “powered by SUSE LINUX” tag for its enterprise line, especially as OpenSUSE becomes more bleeding edge.
3. redhat made the move to differentiate fedora before opensuse. with ubuntu coming on strong, who is left to bother with opensuse?
Ubuntu doesn’t have YaST, doesn’t have a graphical installer, and doesn’t have any commercial drivers out of the box. SUSE doesn’t have the plethora of Debian software to call on, doesn’t have a proper dependency management system (although Smart is coming), and doesn’t have a particularly strong community. There’s a place for both.
4. redhat is making better decisions about what communities to support. this is a trivial issue of course, but i just don’t see evolution paying off for novell, nor is mono. i think the ximian products have hit with a thud no matter how much hype nat and miguel throw behind them. sorry miguel, no one really cares about .net compatibility, because the next great platform was the web itself (see:google, flickr, delicious, etc etc), not a runtime/api.
The web is great for thin client stuff, but as the recent Google rebuttal of the StarOffice rumours shows, there will be a place for desktop applications for some time to come. .NET adoption is growing rapidly, not so much in the SOHO world as in the enterprise – Novell’s primary focus, remember – and thus Mono is very important. I do agree that Ximian desktop was not all it could have been; however, Red Carpet (now ZENworks for Linux) is quite nice.
look at redhat… they simply have a better business model.
Red Hat business model: sell Red Hat stock high, buy back low.
Red Hat was lucky to make half a billion dollars on dot-com stupidity. Then, for very long time, they could afford to be not profitable. In fact, they could make more money in interest on their dot-com immoral profits (what is moral in stealing money from people?) than in software and services sales.
Novell was too late to the game. They have to survive on sales and services alone.
“they offer one core product – RHEL, and the support issues are where they go into fine-tuning per customer needs. novell has suse and its own branded linux. this confuses customers. don’t try providing your own rationales in replies, just face it, it is confusing for one company to offer two parallel competing products. ”
and fedora isnt a competing product to RHEL? I thought suse was aken to fedora while novell linux was aken to RHEL
> and fedora isnt a competing product to RHEL?
NO, this is the ENTIRE POINT of splitting fedora off from redhat. they suport it and feed it but it is not a redhat product: it comes with no redhat branding, and no official support.
The SUSE LINUX Professional product is basically akin to Fedora with installation support. It isn’t suitable for the enterprise, same as Fedora.
However, I suspect that the reason Novell continues to directly support SUSE Pro is to attract the dabblers, the enterprise admins who want to put their toes in the water but appreciate manuals, a fully working environment out of the box (browser plugins, NTFS support etc) and a bit of help getting up and running. If they like SUSE, they might well begin to evaluate Novell’s enterprise offerings.
I don’t think the same could be said of Red Hat & Fedora.
“I thought suse was aken to fedora while novell linux was aken to RHEL”
and that would make you wrong
Hmmn, all the many suggestions around the place for Novell to start making money out of its Linux offerings tend to overlook that the amount of money that the Linux bits can produce in a reasonable time-frame is a fraction of that required to maintain Novell in anything like its present form. Especially if you start returning its cash balances to the stockholders which is what they are agitating for, a bit of a giveaway as to what they think.
So I guess Novell is either going to have to “slim down” into something almost unrecognizable compared to the Novell of today, get taken over and broken up, or go under and suffer the indignity of a fire sale. I know this sounds pessimistic, but the underlying assumption in articles on the net seems to be that Novell is destined for the intensive care ward.
Say what you want between Novell and Redhat but Novell has a much more powerful product (and I use RHES, but I may switch next year). While their transition to Linux could still be called early, the potential is there..
Novell is having to reinvent itself after years of seeing it’s existing core products erode. It’s a difficult process that is going to take years. While there are a lot of great things in the pipeline for Linux, I see Novell doings some of the most exciting. While someone griped about Ximian and mono, these are the two areas where I see a lot innovation coming from (with the extra resources that Novell is able to offer). All the mono based apps, while early still, are the best things gnome has seen in years (iFolder, Fspot, Banshee, Beagle, etc, etc). Hula, which is again early, is almost certainly going to be the de facto opensource groupware solution (which will provide money to Novell, make no mistake).
My guess is that we’ll see continued quarters like this in the near future. Once they really get all their technologies in place then I think things could look really good for Novell(I believe they’ll be the first ones to really have a drop-in, simple, replacement for windows file servers thanks to eDirectory and their hiring of one of the samba programmers not too long ago). It sure has been a while…
While someone griped about Ximian and mono, these are the two areas where I see a lot innovation coming from (with the extra resources that Novell is able to offer).
They are not making any money. Mainsoft makes more money from Mono than Novell does, and even that isn’t very significant. Their market is more .Net/J2EE integration, where the market actually is.
With Hula not very far off and some features, specifically search, being done with Mono, it really should not be long before Novell is offering a power web based solution for email that rivals both exchange and gmail. I think a little time is all it will take.
With Hula not very far off and some features, specifically search, being done with Mono, it really should not be long before Novell is offering a power web based solution for email that rivals both exchange and gmail. I think a little time is all it will take.
Hula and Mono are just projects that piss patterns in the snow. They are not profitable, and it is now certain that they cannot be made to be profitable. There’s just nothing happening.
The thing I find really dangerous is that people in charge at Novell who aren’t technically minded are believing at least some of the tosh the technical people on some sides of the company are telling them. Thus, the company is getting pulled one way and then the other.
It isn’t about outright cuts but getting Novell to justify their head count; and I’m sorry, the poducts that being pumped out and what is being done it the R&D department can’t be justified – there must be an awful lot of people with fingers up asses if the number of product releases are anything to go by.
I’m sorry, but personally they should kill of the Linux product and concerntrate on the middleware layer – the part that is actually important – get mono working on Solaris, RHEL etc. Create an end to end development set of applications to cater to the enterprise developers need, team up with SUN and RedHat to get the ball rolling.
They would be better off trying to sell the stuff that actually works on all platforms than trying to flog to death the bottom layer which quite frankly is not a big money spinner to the bottom line – let the SUNs and Red Hats of the world bitch and fight over the operating system – concerntrate on the money further up the revenue tree.
Mono already supports Solaris as well as RedHat (RHEL 3 & 4, as well as Fedora).
As far as teaming up with RedHat or SUN ? Be realistic, Sun is too heavily invested in Java. As for RedHat, they have the worse ‘not invented here’ syndome in the industry in pure open source fashion. Havoc prefers to discover JavaScript, critique Mono and the supposed threat of Microsoft all the while sponsoring and open source java. As if Sun is not going to go after RedHat !
They won’t cut Groupwise/ZENNetworks, it would be very foolish. I’m very suspisous what is behind Blur – my pick it could be even Microsoft, because Novell goes trough transition, it is understandable not to have so much money, because they have to regroup. Other investiment groups don’t act THAT loud.
But in overall, it is good that Novell changes – wish them luck. I hope I can suggest their enterprise Linux products in future.
Novell needs to cut all foolish projects like
mono zenworks hula and NLD.
those are niche projects which does not generate any incomes.
Hula probably and NLD maybe, but ZENworks? That’s a very important part of their product offering. Without a comprehensive management tool the Novell solution would stink. As it is ZENworks for Linux (aka Red Carpet) is pretty limited; it needs more work, not less.
Mono I’ve already debated.
redhat made the move to differentiate fedora before opensuse. with ubuntu coming on strong, who is left to bother with opensuse?
Not everybody wants to use Ubuntu. It still has a lot of short comings in my opinion. As mentioned by others, a GUI installer, a tool such as YAST or drakconf and a lot of other features are missing. Its a good distro, but highly overrated because it doesn’t offer anything that you can’t get on other distros (except free shipment of cd’s).
SUSE doesn’t have the plethora of Debian software to call on, doesn’t have a proper dependency management system (although Smart is coming), and doesn’t have a particularly strong community.
YAST does dependency checking and resolution, plus there is apt4rpm, yum and smart to choose from. I think suse can develop a community around opensuse. There seems to have been a lot of interest in the testing releases of 10.0 as well as the official 10.0 release.
YAST does dependency checking and resolution, plus there is apt4rpm, yum and smart to choose from.
In terms of officially supported tools, 10.0 has YaST for manual installation (ie. you have to click lots) and yum for automagic CLI installs – but no convergence between the two tools. The rest is third party at the moment. Basically, it’s a mess.
Don’t get me wrong, though, it’s getting better – I was mainly pointing out some flaws in SUSE in an attempt to be reasonable to Ubuntu. Each distro has its strengths and weaknesses.
I think suse can develop a community around opensuse. There seems to have been a lot of interest in the testing releases of 10.0 as well as the official 10.0 release.
I agree 100%. At the moment, things aren’t that good, which was my point.
You can add rpm repos to YAST just like you would do to apt an yum. YAST will install packages from these sources (local or online) with automatic dependency resolution so there is no need to use apt or yum unless you want to instal packages that are not available in the YAST sources. The software module in YAST is not as good as urpmi, apt or yum but its still a reasonably ok tool that could do with some improvement.
This is what happens when you try to make money with Linux. They should have consulted with Corel first. Or Loki or Eazel (and so on).
Corel LINUX lives on as Xandros Desktop (though whether they are profitable or not is a matter of debate).
Loki was a consumer-driven company, while Novell is largely business-oriented. And in the enterprise, Red Hat has shown that profitability can be a reality. (Eazel was a tiny startup, and a large proportion of startups fold within three years as a matter of course – OSS or otherwise.)
I have been watching this (and involved in it) since Novell entered the Linux realm. The real issue is that their sales people make more money selling legacy than Linux . . . period. If you can’t get the sales force online your screwed.
So although Novell IS doing alot that is right, porting current stack to Linux is a good example, if you can’t figure out a way to convince your sales force 1. that they actually CAN make money selling it, and 2. educate them on the products (most Novell sales people don’t have a clue about Linux), then you will never be a success.
Management. Novells management is actually aware of this issue . . . and that’s why a lot of them have to go also, because they are afraid to change the company enough to make the new model work. Legacy keeps the lights on, so it’s hard to make the change. Also, they are all soooooo used to the extensive travel and all that comes with it. All the cruft needs to be cut from the company, it needs to be steamlined and they need to concentrate on Linux ONLY. Support your legacy customers but DO NOT TAKE MORE.
the server market but they lost it all to Microsoft.
Novell is a company that made incredibly stupid moves (office suites, UNIX, etc…) They wasted so much money on these ventures that they forgot to protect their core asset, Netware.
Novell is in trouble. No vision and almost completely irrelevant in todays market. Nobody needs them anymore.
I ready about this earlier, and I just love the fact that the layoff is driven by the investors looking for Novell be more “inline with investor’s view”.
Now they are going to layoff engineers who most like would be working on the next generation products. Yes, the same projects that would be driving the bottom line in a fews years. Since Novell won’t have those new products to add to the product line, sales will again decrease. See above.
I might be too cynical here, but I have seen this trend time and time again with the same results.
you hear these comments again and again, gee, if only the investors would grant the engineers infinite time and infinite funds…don’t they know they are “engineers!!” and therefore morally perfect and incapable of failure once given free reign?
i used to make these arguments early in my engineering career as well until i realized the developers are just as capable of peeing away resources as the “PHBs”. investors have granted novell two+ years now to show something for the linux investment and i think its fair that they be shown at least some change in direction in the revenue stream. it doesn’t seem to be there.
there are hundreds of tech companies who will gladly sell stock to investors. thousands of mutual funds. dozens of linux firms. in an environment like this you can’t have an expectation of perpetual patience.
1. Fire Jack Messman and get someone in who understands the business and has a vision of how to fit things together. The guy doesn’t have a clue, and seems to have inhaled some crack smoke that has made him think Hula is a replacement for Groupwise. I would promote one of the Suse guys, or get one of them back. Without
the right people in charge, forget it.
2. Work out the right open source software to integrate, and get rid of this both-source crap. Keep Zenworks (at least it’s original), but groupware is going to go open source fast. Look at partnering with a project like Kolab or something similar as part of a wider solution and retiring, or doing something with, Groupwise. No one is using it. It’s an expensive dinosaur.
3. Make sure the desktop migration does not fail. Novell do not seem to realise how critical this is. They need the support infrastructure there, they need to solve some longstanding Linux desktop problems (software installation) and they need to get ISVs flocking to their platform. They can’t idle on as they have been doing, and they cannot do everything themselves. Getting bogged down in low-level projects like Mono and maintaining parts of GTK and Gnome for no income isn’t an option. It’s too much work and making Gnome more efficient certainly doesn’t pay – the resources are too much. Partner with companies like Trolltech to make sure the low level development that Novell can’t make cost effective is there and they don’t have to worry about it.
4. They make a big play of identity management, but they are woeful at it. Look at Active Directory for Windows and make sure their Linux stuff from desktop to server has that kind of support. It’s not undoable, as LDAP has provided it for years and stuff like KDE’s Kiosk will provide the extra mile on the desktop. They need to provide the necessary management tools are there as well, and make sure they include development in the mix with Java as well (i.e. Component Services, except better). People should be able to be authenticated and log onto any server or desktop, or to be authenticated to use things like Java server apps in a unified way.
5. Package all this up into meaningful, easy to understand components, make it open source, get rid of the proprietary software uncertainty, make sure Novell software is well used (open source is a great channel for doing that) and create lots of volume in terms of selling support as a result. Make a splash, create nice icons, logos and get people excited. Make sure the hype lives up to expectation and you’re off an running.
6. Make sure when they sell support that they provide more than just the ‘support’ tag. Create reading and documentation materials and lots of qualifications for all of those components.
There’s a few other things they could do, but that’s the core stuff in a nutshell.
(Red Hat business model: sell Red Hat stock high, buy back low)
Completly true, and not very well known. RH made a good deal of it’s money outside of this Linux Business model.
(In fact, they could make more money in interest on their dot-com immoral profits (what is moral in stealing money from people?)
Nothing immoral here, just over jazed investors. They all knew what they were doing and knew the market is a gamble, it’s just like any other stock, you win or loose. Absolutly NOT RH’s fault, and NOTHING wrong with it.
(Novell was too late to the game. They have to survive on sales and services alone.)
Completly agreed.
Novell is in the position right now to make SUSE Linux a household name, IMO.
Novell should just rid themselves of everything else software/support wise (or put it on the backburner) and just push SUSE Linux and make TV commercials for it. They even have a charming lizard which could be used in the commercials.
It’s very logical to layoff the management consultants branch.