Novell Picks John Young to Succeed Robert Frankenberg as Firm's Chairman
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By Lee Gomes
Staff Reporter of The Wall Street Journal
The board of Novell Inc., which for months has grown increasingly upset with Robert Frankenberg's performance as chairman, president and chief executive officer, has named a Novell board member and a company marketing official to succeed him.
As expected, Mr. Frankenberg, 49 years old, resigned from the Provo, Utah, networking software company. He will be succeeded as chairman by former Hewlett-Packard Co. president and chief executive officer John A. Young, 64, who has been a Novell board member since 1995.
Mr. Young will also help with day-to-day management chores. The job of president is going to Joseph A. Marengi, 43, formerly in charge of Novell's world-wide sales.
While a search is under way for a new CEO, people close to the company said that Mr. Marengi will be evaluated as a possible full successor to Mr. Frankenberg. It is also possible that an outsider will be brought in to fill all three of the company's top jobs.
In Nasdaq Stock Market trading yesterday, Novell closed at $10.375, down 62.5 cents.
Mr. Frankenberg is invariably praised as a thoughtful, gentlemanly manager. But several people inside and outside Novell said that his low-key, consensus style, which was so successful in Mr. Frankenberg's 25-year career at H-P, didn't help him after he joined Novell in 1994.
Although Novell has had a string of weak quarters, a person familiar with the board's deliberations didn't cite those as the reason for the directors' displeasure with Mr. Frankenberg. Instead, it was his inability to solve a number of pressing problems with Novell's marketing efforts, as well as what was described as his failure to provide the energizing, dynamic leadership the board and others felt
the company badly needs.
Novell's networking software has suffered a stiff challenge from Microsoft Corp.'s Windows NT operating system, among other problems. In a new survey of 1,000 corporate computer users released yesterday, 90% of them said they owned Novell's popular NetWare product, but only
20% said they had upgraded to the latest version, according to Forrester Research, a Cambridge, Mass., research firm. Only 48% of the respondents said they would still be using NetWare in three years.
Mr. Frankenberg's performance at Novell had been a concern to the board for many months, the person close to the board said. Mr. Frankenberg had been advised of their displeasure; in fact, in
recent weeks, a special subcommittee of three board members had regular telephone conferences with him to discuss his progress.
Finally, though, the board "concluded he's just not doing the job," this person said. Novell "needs someone with vision and a street-fighter mentality, since this a tough business. Bob had a hell of a job to do, and he worked very hard at it. But he just wasn't the right match for the company," he said.
One of the complaints: while Novell has a strong Internet and "intranet" strategy, the company is rarely brought up in Internet discussions, a fact this person blamed on Mr. Frankenberg's "failure
to evangelize it properly."
Mr. Frankenberg wasn't available for comment yesterday. His wife said he was driving from California back to Utah, and couldn't be reached.
In their public statements yesterday, Novell officials echoed many of the concerns that also motivated the board, though without targeting their remarks at Mr. Frankenberg. For example, Mr. Marengi said that from here on out, Novell "will become more aggressive. We had grown
passive in recent years."
Former Novell executives also had criticisms of Mr. Frankenberg. Kanwal Rekhi, a former Novell executive vice president who resigned from the board in September, said Mr. Frankenberg "didn't want to get his hands dirty" with the nitty-gritty problems at Novell.
Sheldon Laube, who left Novell earlier this year after a six-month stint as Mr. Frankenberg's technology adviser, called Mr. Frankenberg an "outstanding manager," but said "Novell was in need of a charismatic leader, and it didn't get one in Frankenberg."
Observers say Novell is now in a precarious position. It has had buyout discussions in the past, but none is occurring now, an insider said. And while the company is pegging much of its future growth plans on the Internet, it is entering that market late, and with no obvious advantage over such companies as Microsoft and Netscape Communications Corp., which are attacking the Internet with all they have.
Novell remains optimistic, though; "I'm very enthusiastic about the future of Novell," Mr. Young said.
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