Novell's Chris Stone: No More Mr. Nice Guy

With virtually free reign now, courtesy of Novell CEO Jack Messman, Stone is making changes everywhere. Some are sure to shake the company to its very core, and he vows to throw rocks at anyone who gets in his way. That includes Microsoft, which,recent revelations suggest,Novell offered to help in Washington, D.C., in exchange for better treatment in the engineering labs. In a recent one-on-one, senior executive editor T.C. Doyle learns what Stone has planned.

VB: Why do you think the question about Novell's viability continues to come up?
Stone: I think it continues to come up because people don't see progress. Therefore, they conclude, we must be in trouble. They don't hear from us. They don't see us taking leadership positions in things. You know, kind of laggards. Therefore, laggard equals unviable [in their minds.

VB: You're a guy with prospects. You wouldn't have joined a company without upside. What the hell attracted you to Novell?
Stone: Well, the upside. There's a lot here.

VB: But wasn't there upside the first time around?
Stone: Look, this isn't an indictment against anybody, but it was tough to get stuff done before. This time, [CEO Jack Messman said, "If you come back, you'll have the ability to make all the changes you think you have to make." The second thing is that I firmly believe this company has all the tools and ammunition it needs to turn things around right here in the basement. I knew it was there when I left%85The problem is figuring out how to put it into a solution, package it, sell it appropriately, get people to pay attention and be aggressive. It's blocking-and-tackling stuff.

VB: So give me an update on how you're moving the needle.
Stone: In just a few weeks, we've made an enormous amount of management changes. We made an attitude shift in the company,we're getting aggressive, edgier. We've made all kinds of edicts, if you will. Take what we're going to do about a standard interface, for example. We're going to have one management platform, etc.

VB: What's your most pressing issue?
Stone: There are two. One is to get engineering on the right track, focused around solutions. The other is to create measurable marketing. We don't have to spend wildly to accomplish our goals. That means no more money on N I. Comdex, too. I have to make sure I can measure our success.

VB: And the channel?
Stone: We have to get it back. When I left two-and-a-half years ago, the channel was doing $90 million a year. We are nowhere near that today.

VB: How do you get it back?
Stone: Do something different. Take NetWare, for example. Why not give it away, and then upsell solutions and services on top of it? Microsoft gives stuff away, and we whine. But if you can't get revenue on something, why not charge zero and then upsell? The channel loves that. In a staff meeting, we did the math on the fly to determine what would happen if we [essentially gave NetWare away. How many NetWare 3, 4 and 5 customers want to go to 6? A lot, right? If we gave up on these dollars, what kind of additional revenue could we get from selling other things? This is the kind of thinking we are doing now.

VB: And why you're back again?
Stone: That, and so many other things.