Still, SUSE has gained some market share, which is a positive for Novell, said Rowdy Van Cleave, vice president of network operations at a major financial services company in the San Francisco area. The company is now testing SUSE Linux to see if it can handle myriad financial applications.

In remarks at the Open Source Business Conference East in Newton, Mass., this week, Hovsepian said Novell has improved SUSE Linux to support more than 1,000 applications, up from just 42 when Novell bought SUSE. But Hovsepian also said Novell realizes Linux cannot solve every business problem. Generally, he said, adoption of open-source technology in the data center is "slowing" partly because the customer "has to do too much" as an integrator.

The planned restructuring raises questions about what happens to products and services such as GroupWise and NetWare, said John Enck, an analyst at Gartner Inc. in Stamford, Conn. He said Novell officials had told him they remain committed to NetWare, for example. "But there is no doubt in my mind that [Novell] will drive from NetWare to the Linux-kernel version of NetWare," also known as Open Enterprise Server. He advised NetWare customers to be prepared to move to the Linux-kernel version within five years.

Novell officials also told Enck that they remain committed to GroupWise for at least two more versions, with support for another 10 years. Meanwhile, Enck expects Novell to accelerate movement of GroupWise to a Linux platform.

Another important direction for Novell will be a reduction in a broad array of professional services, Enck said. The focus will be on providing consulting that remains close to Novell products, he predicted.