Contenu connexe Similaire à Novell Q2 FY2010 investor presentation Similaire à Novell Q2 FY2010 investor presentation (20) Novell Q2 FY2010 investor presentation2. Forward Looking Information
This presentation includes statements that are not historical in nature and that may be characterized as “forward-looking
statements” within the meaning of the Private Securities Litigation Reform Act, including those related to projections; objectives;
strategy; market growth rates; future relevance of physical, virtual and cloud environments; the capabilities of Intelligent
Workload Management; current and future product development; timing of availability of planned releases; margin
improvement; trends in revenue growth; ability to compete; financial position; growth and increases in share price; future
opportunities; customer priorities; timing of realization of projections; functionality, characteristics, quality and performance
capabilities of Novell's products and technology; and results achievable and benefits attainable through deployment of Novell's
products and provision of services. Forward-looking statements forecasting growth in financial metrics are predicated on
assumptions regarding improvements in the overall economy and the markets served by the Company and in which the
Company operates, the timing of which are impossible to accurately predict. Actual results may differ materially from the
results discussed in or implied by such forward-looking statements, which are based upon information that is currently available
to us and/or management’s current expectations, speak only as of the date hereof, and are subject to a number of factors,
including, but not limited to: indirect sales, growth rates of our business units, renewal of SUSE Linux Enterprise ServerTM
subscriptions with customers who have received certificates from Microsoft, decline rates of Open Enterprise Server and
NetWare® revenue, development of products and services, the Intelligent Workload Management market, software
vulnerabilities, delays in product releases, reliance on open source software, adequacy of renewal rates, uncertain economic
conditions, competition, rapid technological changes, failure to expand brand awareness, adequacy of technical support, pricing
pressures, system failures, integration of acquisitions, industry consolidation, challenges resulting from a global business,
foreign research and development operations, loss of key employees, intellectual property infringement, litigation matters,
unpredictable financial results, impairments, the timing of revenue recognition, our investments, and effective use of our cash..
A detailed discussion of these and other factors that could affect our results is included in our SEC filings, including, but not
limited to, our Annual Report on Form 10-K for the Fiscal Year Ended October 31, 2009 filed with the SEC on December 22,
2009, which may be obtained by calling (800) 317- 3195, or at our Investor Relations web page at:
www.novell.com/company/ir.
We expressly disclaim any obligation, except as required by law, or undertaking to update or revise any forward-looking
statements contained in this presentation to reflect any change of expectations with regard thereto or to reflect any change in
events, conditions, or circumstances on which any such forward-looking statement is based, in whole or in part. We also
provide information regarding Novell's general product direction and roadmap. It is intended for information purposes only, and
may not be incorporated into any contract. It is not a commitment to deliver any material, code, or functionality, and should not
be relied upon in making purchasing decisions. The development, release, and timing of any features or functionality described
for Novell's products remains at the sole discretion of Novell.
2 © Novell, Inc. All rights reserved.
3. GAAP Financial Measures
We supplement our consolidated, unaudited, condensed financial statements presented in accordance with GAAP with certain non-GAAP
financial measures. A reconciliation of non-GAAP financial measures to corresponding GAAP financial measures is included on slide 25 of
this presentation. These non-GAAP measures include gross margin, sales and marketing expense margin, product development expense
margin, general and administrative expense margin and operating margin. Below are the GAAP measures that correspond with the non-
GAAP measures presented on pages 21-23. We provide non-GAAP financial measures to enhance an overall understanding of our current
financial performance and prospects for the future and to enable you to evaluate our performance in the same way that management does.
Management uses these non-GAAP financial measures to evaluate performance, allocate resources, and determine compensation. The
non-GAAP financial measures do not replace the presentation of our GAAP financial results, but they eliminate expenses and gains that are
excluded from most analysts' consensus estimates, that are unusual, and/or that arise outside of the ordinary course of business, such as,
but not limited to, those related to stock-based compensation, acquisition-related intangible asset amortization, restructuring, asset
impairments, litigation judgements and settlements, purchased in-process research and development, and the sale of business operations,
long-term investments, and property, plant and equipment.
GAAP Operating Model We also present a projection of our non-GAAP gross
margin, sales and marketing expense margin, product
2006 2009 development expense margin, general and
Gross Margin 69% 78% administrative expense margin and operating margin.
These projections are forward-looking, non-GAAP
financial measures. The corresponding GAAP financial
Expense Margins measures are not available and cannot be provided
Sales and Marketing 38% 34% without undue effort because we are unable to
Product Development 20% 21% accurately forecast information regarding expenses or
gains such as, but not limited to, those listed above.
General and Administrative 11% 12% We believe that the corresponding GAAP financial
Other Operating Expenses 5% 35% measures are not likely to be significant to an
understanding of our business because there is likely
to be substantial variability between projected and
actual realization of the expenses and gains described
Operating Margin -5% -24% above and/or that such expenses or gains are likely to
arise outside of the ordinary course of business.
3 © Novell, Inc. All rights reserved.
4. Agenda
Corporate Strategy
Today's Customer Challenges
Intelligent Workload Management
Financial Highlights
4 © Novell, Inc. All rights reserved.
6. Novell Vision ®
Making IT Work As One
Through our infrastructure software and ecosystem of
partnerships, Novell harmoniously integrates mixed IT
environments, allowing people and technology to work as one.
Novell Mission
To help our clients reduce cost, complexity and
risk on virtually any platform
Novell Strategy
To be the industry leader in the new category of
intelligent workload management
6 © Novell, Inc. All rights reserved.
7. Novell Offers 10 Infrastructure
®
Software Solutions
Data Center End-User Identity OEM
Computing and Security
Virtualization and Endpoint Security Software
Workload Management Management Appliances
Management
Collaboration Compliance Preloaded Linux
Enterprise Linux Management Desktops
Servers
Identity and
Business Service Access
Management Management
7 © Novell, Inc. All rights reserved.
8. 2010 IDC Projected Market
Growth Rates for Our Markets
Data Center End-User Identity OEM
Computing and Security
23% 11% 23% 118%
Virtualization and Endpoint Security Software
Workload Management Management Appliances
Management
17% 4% 12% 17%
Enterprise Collaboration Compliance Preloaded Linux
Linux Servers Management Desktops
5% 7%
Business Service Identity and Access
Management Management
8 © Novell, Inc. All rights reserved.
9. Novell Go-to-Market Ecosystem ®
TARGET CUSTOMERS
Large Very Large
ROUTES TO MARKET
(500 – 4999 employees) (5000+
ng
employees) gi m
ENTERPRISE MARKET ECOSYSTEM
er d ste
Em lou sy
Accenture C co
Atos Origin Consulting, Systems Integration Vendors E
Infosys
s d
or n
ACS
ut r s a
s t i d on
Di ov ti
rib e
Pr olu
SAP Application Vendors
S
IBM
MSFT HP
eb d
W an
Oracle
ct
Novell Systems Software Vendors
Te r e
le
Di
EMC
(VMware)
Cisco
Dell Hardware Vendors
9 © Novell, Inc. All rights reserved.
10. 2010 Corporate Objectives
1 Become the Leader in Intelligent
Workload Management
2 Grow Invoicing and
Expand Margin
3 Retain and Acquire Customers
by Leveraging Partners
10 © Novell, Inc. All rights reserved.
12. Physical, Virtual and Cloud Are All
Relevant for the Next Decade
Percent of enterprise workloads that
will run in physical, virtual and cloud environments
12 © Novell, Inc. All rights reserved. Source: IDC & Gartner estimates
13. Security Remains the Primary
Concern for Cloud Computing
Question: Rate the challenges/issues of the cloud/on-demand model
(1=not significant, 5=very significant)
Security
Performance
Availability
Hard to integrate with in-house IT
Not enough ability to customize
Worried cloud will cost more
Bringing back in-house may be difficult
Not enough major suppliers yet
Percent Responding 3, 4 or 5
13 © Novell, Inc. All rights reserved. Source: Frank Gens and IDC Enterprise Panel, 2009
14. CIOs Need a Consistent IT Process
A secure, pragmatic approach to managing
multiple platforms and evolving business models
GOVERNANCE AND COMPLIANCE
Business Business Business
Service Service Service Software as
Management Management Management
a Service
IT Service IT Service IT Service Platform as
Management Management Management a Service
Infrastructure
Existing Virtualized New as a Service
Internal Internal External
Capacity Capacity Capacity
On-Premise Computing External Cloud
14 © Novell, Inc. All rights reserved. Firewall
16. Intelligent Workload Management
Intelligent workload management
enables IT organizations to
manage and optimize computing
resources in a policy-driven,
secure and compliant manner
across physical, virtual and cloud
Intelligent
environments to deliver business
WORKLOAD
services for end customers. Management
16 © Novell, Inc. All rights reserved.
17. The Intelligent Workload
Management Lifecycle
Customized Security and
Build Operating Compliance
Management
Secure
System
Service
Manage Resource
Management Management Measure
Both Intelligent and Standard Workloads Across Physical, Virtual, and Cloud Environments
17 © Novell, Inc. All rights reserved.
18. Novell Differentiation:
Integrating Identity into Management
General
Purpose Customized
Operating
Operating System
System
Security and
Compliance
Security and
Management Resource
Compliance
Management
Management
Resource
Management
Service
Service Management
Management
Identity-Managed
Isolated Identity Awareness
18 © Novell, Inc. All rights reserved.
19. How Novell Delivers Intelligent
Workload Management
Build Secure Manage Measure
SUSE Linux
® Novell Identity
®
PlateSpin Migrate
®
Novell Business Service
®
Enterprise Server Manager Manager
PlateSpin Orchestrate
®
SUSE Studio
® Novell Access
® Novell Business Service
®
Manager ™
Novell ZENworks
® ® Level Manager ™
SUSE Linux
®
Configuration
Enterprise JeOS Novell Identity
®
Management Novell Business
®
Manager Roles Experience Manager ™
Novell ZENworks
® ®
Based Provisioning PlateSpin Recon
®
Configuration Module Novell myCMDB
®
™
Management PlateSpin Protect
®
Novell Access
®
Novell Sentinel
®
™
Governance Suite Novell Cloud Manager
SUSE Appliance
®
Novell Sentinel Log
®
™
Toolkit Novell Privileged PlateSpin “BlueStar”
® Manager
User Manager
Novell “Workshop”
® Novell ZENworks
® ® Novell Compliance
Novell SecureLogin
® ® “Workbench” Automation
Novell Cloud
®
Security Service
19 © Novell, Inc. All rights reserved. * Planned Availabilty by end of 2010
21. Consistent Margin Improvement
over the Past Three Years
2006 2009 Target
Gross Margin 71% 80% 80%
Expense Margins
Sales and Marketing 37% 33% 30-32%
Product Development 18% 20% 16-18%
General and Administrative 10% 11% 9-10%
Non-GAAP
5% 16% 20%
Operating Margin
21 © Novell, Inc. All rights reserved.
24. Novell Summary ®
• Competing in growth markets
• Strong balance sheet and financial position
• Consistent margin improvement
• Differentiated corporate strategy
• Addressing today's critical customer challenges
with continued product innovation
• Company will drive growth and raise share
price through organic and inorganic moves
24 © Novell, Inc. All rights reserved.
25. Reconciliation of GAAP to Non-GAAP
Operating Margin
Fiscal Year Ended
Oct 31, 2006 Oct 31, 2009
GAAP income (loss) from operations $ (42,194) $ (206,492)
Operating m argin % -4.6% -23.9%
Adjustments:
Stock -based compensation expense:
Cost of revenue 4,096 2,649
Sales and marketing 11,533 7,015
Product development 8,226 9,332
General and administrative 11,147 6,885
Sub-total 35,002 25,881
Acquisition-related intangible asset amortization:
Cost of revenue 4,603 9,984
Sales and marketing 1,087 7,296
Product development 5,911 -
Sub-total 11,601 17,280
Other operating expenses (income):
Restructuring expenses 4,405 25,200
Purchased in-process research and development 2,110 -
Net gain on sale of property, plant and equipment (5,968) (2,199)
Litigation-related expense (income) 22,775 -
IT outsourcing transition costs - 173
Executive termination benefits 9,409 -
(Gain) loss on sale of subsidiaries 8,273 (16)
Impairment of intangible assets 1,230 279,135
Stock-based compensation review expenses 1,890 -
Sub-total 44,124 302,293
Total operating adjustments 90,727 345,454
Non-GAAP income from operations $ 48,533 $ 138,962
Operating m argin % 5.3% 16.1%
25 © Novell, Inc. All rights reserved. Revisions were made to prior period amounts in order to conform to the current period's presentation
27. Unpublished Work of Novell, Inc. All Rights Reserved.
This work is an unpublished work and contains confidential, proprietary, and trade secret information of Novell, Inc.
Access to this work is restricted to Novell employees who have a need to know to perform tasks within the scope
of their assignments. No part of this work may be practiced, performed, copied, distributed, revised, modified,
translated, abridged, condensed, expanded, collected, or adapted without the prior written consent of Novell, Inc.
Any use or exploitation of this work without authorization could subject the perpetrator to criminal and civil liability.
General Disclaimer
This document is not to be construed as a promise by any participating company to develop, deliver, or market a
product. It is not a commitment to deliver any material, code, or functionality, and should not be relied upon in
making purchasing decisions. Novell, Inc. makes no representations or warranties with respect to the contents
of this document, and specifically disclaims any express or implied warranties of merchantability or fitness for any
particular purpose. The development, release, and timing of features or functionality described for Novell products
remains at the sole discretion of Novell. Further, Novell, Inc. reserves the right to revise this document and to
make changes to its content, at any time, without obligation to notify any person or entity of such revisions or
changes. All Novell marks referenced in this presentation are trademarks or registered trademarks of Novell, Inc.
in the United States and other countries. All third-party trademarks are the property of their respective owners.