Novell Vice Chairman Chris Stone leaves company

After helping Novell Inc. reinvigorate itself last year through the endorsement of Linux and the acquisition of vendor SUSE Linux AG, Vice Chairman Chris Stone has left the company.

In a tersely worded announcement Thursday, Waltham, Mass.-based Novell said Stone had “left the company to pursue other opportunities.” A Novell spokesman refused to comment further on Friday.

Stone, who was second in command at Novell to Chairman and CEO Jack Messman, was responsible for engineering, product management and alliances. His duties will be taken over by Messman for now, according to the company.

Stone couldn’t be reached for comment on Friday.

In a statement issued by Novell, Stone said, “It is with some regret that I have decided to leave Novell and pursue other professional opportunities. I am proud of my work and accomplishments at Novell, but now is the time in my career to do something else, and I look forward to new challenges.”

Dion Cornett, a financial analyst at Decatur Jones Equity Partners LLC in Chicago, in an e-mail message today called the departure “a negative for both [Novell] and the industry.”

“We believe that Mr. Stone was instrumental in pushing Novell toward a strategy of capturing value from open-source software, as opposed to other members of management maybe more inclined toward giving away Linux to fuel demand for [Novell’s] other offerings, such as identity management and directory services,” Cornett said. “We believe that the latter is a flawed strategy in that [Novell’s] other products will eventually face commoditization as well, and giving away the operating system not only sets a poor business precedent, but may even accelerate the commoditization of products higher in the stack.”

Cornett wrote that the $2 million severance package, plus health care, given to Stone “suggests that Mr. Stone was asked to resign.” The severance details were unveiled in a filing with the U.S. Securities and Exchange Commission.

Novell users were surprised by the move.

George Raetzke, senior systems programmer at Northern Illinois University in Dekalb, said, “Hopefully, there is a plan and direction” accompanying the departure.

John Falsetti, senior vice president of information services at Kids Hope United in Chicago, a nonprofit social service agency, said Stone’s departure won’t matter much to him as a heavy Novell user. He called the move “just more of the same. How many guys have come and gone in the last four years over there?”

Laura Didio, an analyst at The Yankee Group in Boston, said Stone’s departure was “obviously some sort of shakeup … since Stone was hired back as the heir apparent to be CEO in 2002.

“This spells bad news for Novell, because Stone was obviously well respected and a well-known entity in networking,” she said. “Another theory is that perhaps SUSE is taking over at Novell, but clearly something happened and happened quickly.”

Hal Thayer, a Novell spokesman, said the departure doesn’t spell a change in strategic direction by Novell with regard to technology.

Stone joined the company in March 2002 and has been a key leader in moving Novell into the world of open-source software and identity management. He had also worked at Novell previously, joining the company as senior vice president of strategy and corporate development in August 1997 before leaving later for another job.

“We thank Chris for his service to Novell over the past two and one half years,” Messman said in a statement. “He made significant contributions to changes in our strategic direction, and his vision and energy will be missed. We wish him well.”

Stone was an integral part of Novell’s decision a year ago to buy SUSE as it headed in a new business direction. After years of watching Novell lose market share to Microsoft Corp. and other vendors, many Novell users and industry analysts saw the acquisition as a bold attempt to revitalize its middle-aged NetWare line.

Before acquiring SUSE, Novell also purchased Linux desktop vendor Ximian Inc. as it began building its open-source and Linux holdings.

(Computerworld‘s Matt Hamblen contributed to this report. )