New Management Will Not Solve Novell's Problems
Stocks: (IBM)(NOVL)(RHAT)(ORCL)
Novell announced that it said goodbye to it CEO and CFO in the hope of improving the company's prospects. But, the COO was promoted meaning it is note really a regime change.
Novell's number have been weak lately. The April 30 quarter turned in revenue of $278 million and an operating loss of $2.5 million.
The company has been competing, without much success, with RedHat for the Linux open-source corporate business. Novell's old Netware operating system continues its declining sales. The Linux system replacing it appears to have picked up very little share.
Although the company's Open Platforms Solution revenue was $57 million in the last quarter, up from $20 million in the quarter a year ago, the old Netware product line saw revenue drop 16%. And, the $57 million from open-source is not much for a company with a quarterly topline of $278 million.
Novell is trapped in the midst of a change in business models. Its old operating system no longer has much of a customer base, and Linux open-source system sales are going to companies like RedHat and IBM. Oracle is also beginning to adopt Linux for some of its products.
Over the last 52-week period, Novell's stock has dropped from $9.83 to $6. Wall Street seems to have lost confidence in the company, and, a review of Novell's prospect would indicate that the smart money has been right.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in the companies he writes about.
Novell announced that it said goodbye to it CEO and CFO in the hope of improving the company's prospects. But, the COO was promoted meaning it is note really a regime change.
Novell's number have been weak lately. The April 30 quarter turned in revenue of $278 million and an operating loss of $2.5 million.
The company has been competing, without much success, with RedHat for the Linux open-source corporate business. Novell's old Netware operating system continues its declining sales. The Linux system replacing it appears to have picked up very little share.
Although the company's Open Platforms Solution revenue was $57 million in the last quarter, up from $20 million in the quarter a year ago, the old Netware product line saw revenue drop 16%. And, the $57 million from open-source is not much for a company with a quarterly topline of $278 million.
Novell is trapped in the midst of a change in business models. Its old operating system no longer has much of a customer base, and Linux open-source system sales are going to companies like RedHat and IBM. Oracle is also beginning to adopt Linux for some of its products.
Over the last 52-week period, Novell's stock has dropped from $9.83 to $6. Wall Street seems to have lost confidence in the company, and, a review of Novell's prospect would indicate that the smart money has been right.
Douglas A. McIntyre can be reached at douglasamcintyre@gmail.com. He does not own securities in the companies he writes about.
posted by douglas mcintyre at 8:35 AM
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