Novell’s sales hit by uncertainty over its future
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As infrastructure software provider's revenues continue their decline, CEO blames customer uncertainty about its future ownership
Infrastructure software provider Novell failed to meet its predicted revenue targets because customers are uncertain about the company’s future, according to CEO Ron Hovsepian.
Novell’s revenues fell 8% year-on-year to $199 million in three months ending 31 July 2010. The company’s net income fell 6% year-on-year to $16 million, despite favourable currency fluctuations.
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“Our third quarter revenue results were below our initial expectations, which we believe is principally related to customer uncertainty associated with the Novell board of directors’ ongoing review of various alternatives to enhance stockholder value,” Hovsepian told investment analysts yesterday.
In March 2010, the company announced that its board had “authorised a thorough review of various alternatives to enhance stockholder value”. It said at the time that these alternatives “include, but are not limited to, a return of capital to stockholders … strategic partnerships and alliances, joint ventures, a recapitalisation and a sale of the company.”
In May, the Wall Street Journal reported that up to 20 bidders were then interested in acquiring the company, most of which were private equity firms.
Last week, Novell launched WorkLoadIQ, a suite of security, systems management and infrastructure products that the company says will help it to “lead and enable the rapidly growing intelligent workload management market”.
‘Intelligent workload management’ is, according to the company’s marketing collateral, “a new and more effective model of computing that enables IT organisations to manage and optimise computing resources in a policy-driven, secure and compliant manner across physical, virtual and cloud environments.”
Novell says that the “total market size for intelligent workload management solutions was valued at more than $4.2 billion in 2009”, citing an IDC report that it sponsored.
