Novell Inc. (NOVL), a leading technology software company, announced consolidation of its 4 business units into 2 to better streamline its business and focus on core operations.
The company’s Identity and Security Management (ISM), Systems and Resource Management (SRM) and Open Platform Solutions (OPS) business units will be incorporated into the new Security, Management and Operating Platforms business unit. The reorganization of the business units is expected to take place from Jan 1, 2010.
To better conduct these operations, the company also shuffled management positions. Jim Ebzery, the Senior Vice President and general manager of identity and security management will become the head of the new unit.
The reorganization of its structure and management will better align Novell’s business and help the company become the leader in the emerging Intelligent Workload Management (IWM) market.
Novell’s organizational restructuring will help it achieve the targeted expense reduction and bottom line growth. The company is accelerating business-restructuring initiatives, emphasizing on cost reductions and strengthening the synergy of integration. We remain positive on the company’s restructuring initiative.
Novell is also expected to benefit from its broad distribution channels. The company has partnership agreements with Affiliated Computer Services, Inc. (ACS), Dell Inc. (DELL) and SAP AG (SAP), which will help drive revenue growth.
While the current outlook and weak demand continue to reflect the adverse and uncertain economic conditions currently affecting Novell’s businesses, we believe this is only a temporary phenomenon, and the long-term growth story remains intact. We remain positive on Novell’s strong operating margins and continued focus on cost reductions.
We have a Neutral rating on Novell’s shares.
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