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8/16/2002
9:41:22 AM
Novell CEO: Jack Messman
Interview by S. Ibaraki, I.S.P.
This week, Stephen Ibaraki, I.S.P., has an exclusive interview with Jack
Messman, Chairman, President and CEO of Novell.
Jack graduated from the University of Delaware with a BSc in chemical
engineering and received his MBA with Distinction from the Harvard School of
Business Administration.
Prior executive roles include: President and Chief Executive Officer of
Cambridge Technology Partners where he led its growth as an international
e-business services provider since 1999 (Messman joined the Cambridge Board
of Directors in 1992); Chairman and CEO of Union Pacific Resources Group Inc.
(UPRG), a North American independent oil and gas exploration and production
company; Chairman and Chief Executive Officer of U.S. Pollution Control,
Inc., Union Pacific's environmental services company; Managing Director of
Mason Best Company of Houston, an investment banking firm; Chairman and CEO
of Somerset House Corporation, a publishing company owned by Mason Best;
Executive Vice President-Chief Financial Officer and a member of the Board of
Directors for Warner Amex Cable Communications, Inc.; Executive Vice President
and member of the Board of Directors of Safeguard Scientifics, Inc.;
President and CEO of Novell, Inc. from 1982-1983; President and CEO of
Norcross Inc., a consumer products company; and, prior to 1973, as a partner
in a Philadelphia investment banking firm.
Discussion:
Q: Your list of accomplishments and executive roles are impressive indeed! We
thank you for sharing your years of experience and knowledge with us.
A: My pleasure. Happy to do it.
Q: Can you share your ideas about convergence in the marketplace between
services, products, and solutions; and can you talk about Novell’s
acquisition of Cambridge Technology Partners in 2001, and the recent
acquisition announcement of SilverStream Software in June 2002?
A: Technology used to be bought by technologists. Not anymore. The Internet
has changed all this. Now, key business processes are being put onto the
Internet. Revenue is driven by sales over the Internet. Having the right
technology in place has become a critical business decision. So CEOs and
other executives are now heavily involved in technology decision-making. And
their focus is not on bits and bytes, it’s on buying a solution to address
their particular challenges. Because of the complexity of doing business
across the Net, these solutions increasingly require business services in
addition to technology. Services and products together make solutions.
Novell has moved decisively toward providing solutions to customers through
our acquisitions of Cambridge Technology Partners and SilverStream Software.
Cambridge brought to Novell a strong group of consultants who understand not
just the technology, but how the technology is best leveraged to address
business challenges. With SilverStream, Novell adds a dynamic development
environment that will allow us to help our customers build web services
solutions rapidly, leveraging our services expertise and our traditional
strengths in infrastructure software. We understand the business challenges;
we have tools to help address those challenges, and a framework for making it
all work smoothly, reliably, and securely. It’s a compelling vision.
Q: What have been the challenges stemming from the integration of Cambridge
with Novell and what will be the challenges in the future including the
acquisition of SilverStream?
A: Integrating Cambridge with Novell has presented challenges on several
levels, most of which we’ve now overcome. First and foremost, as companies
that focused on different areas – CTP on services and Novell on software – we’ve
had to work to drive a common culture around a single focus – solutions. This
has required adjustment on both sides. And we’ve made significant progress
there.
In a merger of this size, we also faced the usual challenges of integrating
systems and employee programs. Fortunately, with Novell’s own cross-platform
focus and integration technologies, we’ve been able to take care of these
normal merger challenges fairly easily.
Integrating SilverStream should be an easier process. First, it’s a smaller
operation, with less than 500 employees versus the roughly 3,000 involved in
the Cambridge deal. In addition, since this is primarily a technology deal
and there is little to no product overlap, we don’t expect to have to address
redundancy between the two firms. With Novell and SilverStream both strong
believers in interoperability and multi-platform support, we share a common
vision – what we call “one Net” – a world where networks work together,
regardless of what type of machine they’re running on. This shared vision
gives us a leg up on integration.
Q: Where do you see Novell today, in two years, and in five years?
A: The next few years will see the build out of web services from a niche to
a mass market. With the SilverStream deal, Novell offers a unique triple-play
– business consulting expertise with CTP, a web services development
framework with SilverStream, and the most reliable, scalable, and secure
network infrastructure on the market to manage a web services environment. So
I see Novell as one of the top five players in web services over the next two
years, a position we’d hope to solidify or improve on in the five-year time
frame.
Q: A few years ago I did a random poll of people to see if they knew about
Novell. About one in hundred had heard of the company but their brand image
of Novell was all about a logo they saw when they first started their
computers. Novell still had significant market share at that time, down from
a high of 69% to about 25%. However there was a shift amongst companies where
IT decisions were being made by the business managers looking at the business
case for making IT purchases; and this was a change from the hard core
technical types in years past that made these decisions. Novell always was a
technology leader but their “stealth marketing to business types” presented
challenges to their long term health. Do you feel this is an accurate
assessment, and how are you strengthening and even growing the Novell brand?
A: We know we face a tough perception in the market. Technologists continue
to know us well and give us high marks for what we build. But the executive
level doesn’t know Novell, or knows us for the wrong reasons. We are
absolutely committed to changing this. I don’t mean necessarily spending
hundreds of millions of dollars on advertising. We have to market
intelligently. We need to reach the executive audience, the non-technical
audience. And we’ll do that by focusing on solutions to problems they
understand – like securing their corporate data, improving information flow
to employees, managing networks more cost effectively. And helping them
develop new web services applications that lower cost and drive new revenue
opportunities. In short, we’re going to start speaking business language to
business people. The Novell brand is a strong brand – we need to re-energize
it, and we’re working on that.
Q: How will you be evolving Novell’s various channel strategies in the near
term and long term?
A: I’ve said on many occasions that Novell built its historical success on
the back of the channel. I firmly believe we need to build our renaissance on
the channel, as well. We’ve developed our Clear Channel Initiative to help
clarify what we admit was a confusing message over the last few years. We’re
establishing a named-account/named-partner model that will make clear how we
work with partners to best reach the market. We’re providing strong
incentives to not only keep our channel happy and selling, but to win back
channel partners who’ve left Novell over the last few years.
The acquisition of SilverStream will be a boost to these efforts. As a
leading platform for developing web services, SilverStream’s eXtend products
are a great addition to the suite of technologies our channel partners can
take to market. Like it does for Novell as a company, the deal also provides
for a more compelling offering for our solution provider partners. They can
now deliver not only networking infrastructure, but a powerful web services
application development capability that helps their customers leverage this
infrastructure to build and deploy applications cost effectively.
Q: What do you see as Novell’s core products and services in 2003 and again
in 2006?
A: One of the things we’ve said we need to do is reduce the number of
stand-alone Novell products. The trend is to consolidate technologies into
bundles that make sense for businesses, for example our Novell Secure Access
suite. We’ll continue to try to leverage our industry-leading eDirectory
technology into emerging areas like access and security, provisioning, and
network management. We’ll continue to expand and enhance NetWare as a
platform for running web services. We’ll be taking full advantage of the
strong SilverStream developer and apps server technologies to add new functionality
to the traditional Novell technologies, and vice versa, bringing the strength
of Novell technology into the SilverStream products. I can’t tell you what
the names of these products might be, or how they’ll be bundled. But that’s
the focus.
Q: What in your view are the five dominant challenges facing enterprises in
2003 and again in 2006?
A: In 2003, it’s enterprise application integration, but across the Internet.
Companies have spent a lot of money on technology, but aren’t seeing the
return because of complexity, systems that don’t communicate, silos of
information in different places across the enterprise. We know from customers
getting their systems to work together really is the focus now. Web services
will begin in 2003 to really make inroads in this area. Web services will be
an “inside-out” play, starting as a way for companies to make the systems
communicate internally. Beyond that, I see identity management and access,
privacy protection, empowering a mobile workforce, and building customer
relationships across the web as key challenges.
By 2006, web services will be the common ground. Internally, companies will
link together different platforms, different applications, leveraging common
data to work effectively across the corporation. But web services will also
be the key way to work outside the enterprise, with partners, customers, and
suppliers, based on open standards, using re-usable application logic that
allows applications to be created “on the fly,” across the Internet. By 2006,
Novell’s one Net vision should be largely reality, thanks to web service
advances. Key challenges will continue to be securing this one Net
environment, and customizing relationships with partners, suppliers, and
customers.
Q: IT decisions can have a significant impact on any company large or small.
If you were holding a briefing to CEOs of mid-sized corporations, what would
be your advice to them? What would be your advice to large corporations and
to small companies?
A: First, IT isn’t a miracle cure. Companies need to have solid business
plans and best-of-breed business processes. Technology can help makes these
work better, but the best technology won’t fix a mistaken business plan.
Second, look to IT as a cost-saver, not as an expense. Right now, executives
are gun shy about IT spending. Many overbought in the dot.com euphoria and
are now sitting with shelfware they can’t use. But it’s a mistake to conclude
from this that IT spending is money down the drain. In fact, IT still remains
one of the best ways to earn a return on investment.
I’d also tell executives to find ways to leverage what you have – don’t run
out and buy the latest simply because a vendor puts out an upgrade to a
product. Large companies can save significant amounts of money using IT to
automate costly processes. With web services, we’ll be able to build
applications that automate processes between companies, and between buyers
and sellers, much more than we can today. Smaller companies have perhaps an
even greater incentive to continue to invest in IT – they can reach and
maintain relationships with more customers using the Internet than they
possibly could otherwise. The dot.com boom and bust is history. Companies
must now look at technology as they would any capital expenditure – do the
cost/benefit analysis, look for the payback. It’s there.
Q: You have held many senior executive positions over a remarkable career.
Can you share two or more stories from these times? What “lessons-learned”
could you share with the audience?
A: Yes, it’s been quite a ride, and all very exciting. Not really sure about
stories to tell, but I definitely have learned lessons. I think one of the
most important I’ve learned involves corporate culture. If you get the
culture right, if you get everyone pulling in the same direction, it makes
all the difference. When I first went into the oil business at Union Pacific
Resources, I was surprised to find that it really was populated by a bunch of
JR Ewing types. Customer service wasn’t a driving force for many of the firms
in the drilling business. We made a conscious decision to change the face we
presented to our customers. We became the “friendly” oil company to deal
with. And this led to more business and higher revenues.
Q: If you were doing this interview, what four questions would you ask of
someone in your position and what would be your answers?
A: First, why do you do what you do? Answer – Because it’s interesting,
intellectually rewarding, and because technology, despite the dot.com
collapse, really is changing the nature of not just business, but also how we
communicate and live our lives. It’s a fascinating place to be at a
fascinating time.
Two, can Novell regain its former leadership role in the tech industry?
Answer – Yes. Novell has unquestionably been through a rough period. It has
lost the luster it enjoyed in the early 1990s as the clear leader in
enterprise networks. But there’s an interesting thing happening now: the
market is coming back to us. Web services are a hot marketing buzzword right
now, but any serious assessment of this market shows it’s really just getting
started. With the combination of SilverStream’s web services development
framework and Novell’s core networking skills, which are needed to deliver
those services securely and reliably across any platform, we become a
legitimate top five player in the web services space. The legions of
dedicated Novell customers – the large installed base – give us a great
foundation on which to expand.
Three, where’s your industry headed? Answer – Web services is the next
computing shift, replacing client-server technology. The days of the fat
computer sitting on a desktop with a bunch of applications is ending. Now,
people want to access information and tools from the network – the Internet –
wherever they are, on their cell phones, on their PDAs, at the airport. It’s
a paradigm change, in the true sense of the word. Novell is right in the
middle of this - web services deliver applications over the network, and
nobody knows networks like Novell.
Four, an issue of great topicality these days, what does corporate America
need to do to restore its image? Answer – Go back to basics. I attribute lot
of the bad news coming out of corporate America as losing focus on the
basics. People began to believe the dot.com hype. They saw a market that just
kept going up, corporate valuations for firms like Yahoo, Amazon and eBay
that were just out of this world. I think this led to a loss of rigor in
evaluating what made sense from a business perspective and what didn’t. And
it led to unrealistic expectations with regard to returns and rewards. When
these expectations weren’t met, companies were caught in untenable
situations. I think we’ve already begun to see a return to the basics.
Executives and boards are looking at the business rationale for every move,
they’re returning to building long-term shareholder value as their objective
– an objective they never should have abandoned.
Q: Thank you for sharing your valuable insights with us today. We all watch with
interest as you weave a tapestry of change, shaping Novell into a better
future.
A: Thank you for the opportunity.
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