Careers: Interviews
Novell CEO: Jack Messman

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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