Struggling Novell replaces top executives

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Novell revealed on Thursday that it has replaced its top executive amid signs that the latest attempt to revive the software company’s flagging fortunes have foundered.

Jack Messman, chief executive and chairman, ceased to be employed by the company on Wednesday, Novell said in a press release. The company also revealed that it had ousted its chief financial officer.

The management upheaval reflects the failure of Mr Messman’s strategy to co-opt the Linux open-source operating system to return Novell to growth. It also raises a wider concern for some of the world’s biggest technology companies, which had hoped to see Novell become a significant distributor of Linux to rival market leader Red Hat.

Novell named Ron Hovsepian, a former IBM executive, to replace Mr Messman as CEO, and said that Thomas Plaskett, a director since 2002, had been elected non-executive chairman.

“The Board concluded that a management change would be the best way to accelerate the execution of our growth strategy and build value for shareholders,” Mr Plaskett said in a statement.

Novell, whose early success was built on its networking software, was an early casualty of Microsoft’s dominance of PC software. In an attempt to compete, the company made a failed attempt to break into desktop software itself, but was later forced to retreat.

More recently, under Mr Messman, Novell considered launching its own version of the Linux operating system, hoping that this would also give it a way to secure wider distribution for its proprietary software products, such as identity management.

However, several large tech companies, including IBM and Hewlett-Packard, encouraged Mr Messman instead to buy SuSe, a German software company that had been Europe’s biggest Linux company. They hoped that this would reduce the number of versions of Linux they had to support while also ensuring a viable competitor to Red Hat, which some feared would become too powerful.

Recent results, however, have been disappointing, culminating in an earnings miss in May that wiped more than a fifth from the company’s share price. The shares rose more than 7 per cent on Thursday morning on news of the management changes, but are still a third below their 12-month high.

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