By _Charles Cooper_ And _Margaret Kane_
Wall Street linked the sudden resignation earlier today of Robert
Frankenberg as Novell Inc.'s chief executive to one word: execution.
The Provo, Utah, company has been slow to deliver on product promises
and especially slow to embrace the Internet, according to analysts,
who have treated Novell's shares as a pariah stock.
"Everything they have talked about during the last two years has
always been late. I think the board obviously lost patience," said
Charles Phillips, an analyst with New York-based Morgan Stanley & Co.,
who said investors had lost patience some time ago. "People were
wondering why the board let things go on for so long without taking
action."
Frankenberg, who joined Novell nearly two and a half years ago after a
highly regarded career at Hewlett-Packard Co., was not immediately
available for comment. John Young, a former president and chief
executive at HP, was named chairman. Novell's board of directors also
selected Joe Marengi, formerly executive vice president of worldwide
sales, as the company's new president.
In a statement, Novell said it had begun looking for a new CEO.
"Frankenberg found himself in very difficult circumstances, and he was
in a business that was moving much faster than he was prepared for,"
Phillips said. "He could not instill a sense of urgency that was
needed, and projects were not moving as fast as Novell needed."
Indeed, that is a common criticism voiced by former company
executives, who faulted Frankenberg's collegial style, saying that
management by consensus was the wrong medicine for Novell.
"It was unbelievable," said one former senior executive, who asked to
remain unidentified. "I don't think he had a clue."
"I'm surprised but not surprised," said Mary McCaffrey, an analyst at
Baltimore-based Alex. Brown & Sons. "Novell's had difficulty
executing, and I have concerns about their competitive position in the
marketplace. They have to do something. The company isn't moving
aggressively enough."
"I have a neutral rating which remains neutral," McCaffrey added. "I
would think at least it's a sign that other action is going to be
taken, which is more positive than negative."
The company's shares closed at $11 yesterday, down from a 52-week high
of $20.62.