Hard Times at Novell: renting space and laying off workers
Submitted by srlinuxx on Tue, 03/06/2007 - 01:59.
Novell is looking for companies to fill surplus space in three buildings on its Provo campus. The software company has signed a deal with two real estate firms to conduct a national search for technology companies that might be attracted to the high-tech campus.
Buildings E and F are available for sale or lease. Building A is expected to be available for lease only.
Last week, Novell announced that restructuring this year could cost $45 million, in large part because of severance packages that are a part of job cuts announced in December.
The company has not said how many jobs it will cut. Some cuts were made in the first quarter and the rest will be spread over the next three quarters, but the impact in Provo appears minimal.
Novel fooled by numbers at Motley Fool site ?
Hard times hardly; because of the lump sum payment received from MS, deferred income becomes cash flow. Not to waste the cash is imperative.
Management goal is to improve operating margin, so head count reduction is priority. Asset management(fixed and cash) is urgent. Target is 5-7% operating profit margin. Not mentioned is the equally urgent need for successful(!) killer application programmers to be recruited.
The Linux sales had some growth but only $15 million per quarter, compared with $105 million that RedHat logged same period. But RedHat customers are buying job shop specialties not from run of the mill desktop customers.
So, some good news, some bad; because targeted customers are not in huge($billions) markets but in SMB(small and medium size businesses), And aging programmers are not replaced to be more productive on new product introduction. Telemarketing team in Provo has to be supported by e-marketing website with accounting for instantaneous profit and loss statement on the fly.
Its a long road to stay focused and put a foot in the doors of large IT departments by enterprise operating system with killer applications. Suse has German government enterprise experience but revenue charged is too low. Novell has to supervise the quotations of cost per seat much closer. Identity management can bring more revenue there? Its a small start on a 10,000 mile journey.