Novell’s latest quarterly financial results, revealed today, were a mixed bag for the SUSE Linux provider. Novell made progress in some areas. But didn’t really thrive in others. Where does the company go from here. The answers will likely surface at the Novell BrainShare 2010 conference (March 21-25, Utah), where Novell will strive to energize channel partners and customers? In the meantime, here’s a look at Novell’s current business condition … through the eyes of The VAR Guy.
No doubt, this blog entry looks a lot like previous blog entries about Novell’s financial performance…
- The good news: Novell’s Q1 net income rose to $20.2 million, or 6 cents a share, from $10.7 million, or 3 cents a share in the same period a year earlier.
- The bad news: Novell’s earnings per share were a penny below analysts polled by Thomson Reuters. Updated 2/26: Though Fox Business says earnings did meet expectations
- The good news: Security, Management and Operating Platforms business unit invoicing grew 26%.
- The bad news: Novell’s revenues were $207.6 million, slightly short of the $214.9 million expected by analysts.
- Updated, 2/26 – the good news: Novell’s SUSE Linux business is now break-even
(Credit: Data above from MarketWatch, The Register)
Sounds Familiar
Good news. Bad news. Good news. Bad news. Good news. That’s a familiar trend at Novell. Of course, there’s nothing tragic here. Novell isn’t bleeding cash. The company’s technology hasn’t been disrupted … this isn’t a case of Novell looking like a struggling Sun Microsystems, Apple (in the mid 1990s) or IBM (early 1990s).
Instead, this is Novell being Novell… but can Novell ever be a growth company again?
Novell’s earnings release included an upbeat statement from CEO Ron Hovsepian, who said:
“We are pleased with the invoicing recovery in our Security, Management and Operating Platforms business unit as well as our solid operating margin performance this quarter.”
Still, the earnings release was short on hype. In the release, Hovsepian didn’t cheer about any SUSE Linux customer wins. He didn’t brag about SUSE Studio and SUSE Appliance momentum. He didn’t make bold promises about new efforts like Novell Cloud Security Services. And he didn’t hype Novell’s Intelligent Workload Management (IWM) strategy, an all-encompassing push involving all of Novell’s offerings.
What’s the true mood inside Novell? And how do investors feel about Hovsepian’s leadership and Novell’s overall business strategy? We’ll get some initial answers when the opening bell rings on Wall Street on Feb. 26. And The VAR Guy will pursue more answers at BrainShare, starting March 21.
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Update: Foxbusiness says NOVL earnings actually met Wall Street’s expectations…
Yes, this financial performance record sounds familiar. Novell is one quarter into its current fiscal year and 2010 could be a make-it or break-it year for Novell.
I think they have a lot riding on the adoption of Novell Cloud Security Service, Intelligent Workload Management and their Pulse collaboration environment, which will be federated with Google Wave. Included in this is a new 4.0 release of Identity Manager.
SUSE Linux continues to be a solid performer…glad to know that they are “breaking even” on it. The SUSE Build Service is an excellent tool for rolling out applications as a SUSE appliance.
With the arrival of Novell Pulse this June, you have to wonder about the future of GroupWise and Novell Teaming. The success or failure of Pulse may have a lot to do with any decisions about the future of GroupWise and Novell Teaming.
BTW, wasn’t GroupWise 8.0.1 supposed to be “cloud enabled” or at least you were supposed to be able to run it in a hosted environment. Has anyone seen it done that way?
And what happened to NOWS SBE 2.5 which was released last October and was once being considered for deployment in the Amazon cloud? I think NOWS SBE 2.5 is a sweet little suite and a good value and a logical upgrade for anyone running the old Novell NetWare Small Business Suite 6.x. However, it should be a lot more XEN/XenServer friendly than it is. Whose installing servers on bare metal anymore?
ZENworks Configuration Management 10 is coming up on its 3rd anniversary this year (13th for ZENworks overall) and we don’t have a “cloud-enabled” version of ZCM. All the mojo in IT asset management and systems management is moving to the cloud. Citrix just acquired Paglo in January, so what is Novell waiting for? Maybe the release of Novell Cloud Security Service will bring us ZCM in the cloud?
I think you are right…Novell is definitely a mixed bag. And lest we forget, we are still in the Great Recession despite all of the wishful thinking out there by people who “believe” there will be a recovery. Recovery to what? I think the next 10 years are going to be pretty grim for IT, except for the vendors who best figure out how to get their services and customers into the cloud.
Tim: Many reader comments involving Novell are either all positive or extremely negative. You’re the rare reader who points out pros and cons in a polite manner. Our resident blogger appreciates it. Plus, The VAR Guy is going to ask Novell if ZCM will move to the cloud/SaaS model. Stay tuned.
-TVG
Novell do have few interesting products.Identify managment and System Management stuff is interesting.
Jim.
Looks like they don’t need to look for their mojo anymore, it is now going to be someone else’s problem, by the looks of it.
What does the VARGuy say? We are all waiting for the oracle (not be confused with the software company: Oracle) to speak. Well VARGuy? Can’t type fast enough?