One of Utah's biggest technology employers, Novell Inc., is undergoing a major reorganization that will focus the company on emerging trends in business computing. Key elements of company's strategy will come from the Provo office.
Novell, in recent weeks, announced a consolidation of its business divisions and new roles for members of its upper management ranks starting Jan. 1.
And on Thursday, the company filed a notice with the Securities and Exchange Commission saying that Executive Vice President and Chief Technology Officer Jeffrey Jaffe was leaving the company effective Feb. 1.
The departure comes as the company said this week it was reorganizing its upper management, and that the heads of the two new units will report directly to President and CEO Ron Hovsepian. Previously, the managers of the Novell's four business units reported to Jaffe.
Ian Bruce, Novell's chief spokesman, said that no layoffs are planned as part of the reorganization, leaving about 1,000 workers in Utah where the company was founded. Novell's headquarters are now in Waltham, Mass.
The new focus on one of the company's two units will be on what is known as Intelligent Workload Management. IWM refers to the increasing use of huge banks of computers called "clouds" rather than inhouse computers. It also refers to the ability to simultaneously use various operating systems and software, and the continuing expansion of the use of mobile computing devices such as cell phones.
Within a business, the challenge is to manage all of that to ensure productivity and security. That's what Novell wants to do.
"We identified some time ago an opportunity we saw in the marketplace which we felt played to Novell's strengths," said Bruce. Those include its products that manage who is able to access computer programs and data and what they can do with them.
Katherine Egbert, a software analyst with Jeffries & Co., said the reorganization merges Novell's existing core areas with emerging trends in business computing.
"It makes some sense," she said. "It certainly is a high-growth area."
In a report this week following the reorganization announcement, Richard Williams of Cross Research reiterated his "buy" rating for Novell shares.
"Novell may be on to a clever new way to think of its products," the report said. "The key will be whether customers feel a sufficiently pressing need to motivate a purchase of Novell's IWM solution."
Williams is trimming his estimates of Novell revenues for the first quarter of the new fiscal year by 3 percent and for next year by 1 percent compared to this year, with earnings per share for the year at 31 cents, down 9.6 percent over the current year.
"The biggest risk that we see for Novell in the year ahead is that management will lose credibility with the Street and the stock will be dead money until proof of concept becomes visible to investors," the report said.
Bruce said different parts of the Provo office will report to one or the other of the two new divisions.
"It's going to be critical to our long-term strategy going forward," he said.
Kent Erickson, currently a Novell senior vice president at the Provo office, will continue as part of the company's executive management team.
The Utah office also remains a key part of Novell's tradition business of collaboration software that allows people to work together. The company recently announced Novell Pulse, a collaboration tool that combines e-mail, document production and social messaging tools and that also is to interface with Google's Wave, a similar application for consumers, when the Novell product debuts next year.
