See also: last week's Commerce page.

Linux and Business

Linux lows are an investment in the future. If, like me, you own stock in one or more Linux companies, this year you've probably considered selling a kidney to break even. Things look bleak when viewed from Wall Street. One the other hand, the dot-coms are probably in worse shape than the Linux stocks. At least none of our better known (re: once high flying) public companies has folded yet.

Yet despite the dreary appearance of stocks, there is room for hope. In fact, there is room to be downright giddy. Over on C|Net, J. William Gurley took the wrappings off the silver lining in this bear of a market. In his article A Great Time for Building Great Companies he says:

The race we just ended was, in the end, unsustainable. Most investors that had seen a few cycles before likely knew this in the back of their minds, but had no incentive to mention anything. The conservative ones that cried wolf in 1994 and 1995 were run over and left behind.

When everyone jumped on the Linux Bandwagon, the euphoria that drove stocks to the unsustainable highs was based on the dot-com boom. As Gurley says, no one wanted to deny the boom - those that did missed the money. But that euphoria had no basis in reality. It was based on perception - the Internet is the next big wave so anyone involved with it must be a big money making machine. Yeah, right.

Does making a business off of free software make sense? Ask yourself this - what's more irrational - Drkoop.com paying AOL $89million so AOL could use Drkoop's content or Red Hat building a product and services business on free software? Valuations of dot-coms, and eventually Linux companies, left out the most traditional method of income: product. Dot-coms bet their futures on people paying for information. But information is free (consider those institutions known as "Libraries"). Linux companies can provide product. Not just Linux itself, but value added applications, enhancements, environments, platforms and services. Linux is not dot-com.

Later in his article, Gurley says:

Truly great companies aren't built by the greedy, but by the passionate. ... Today's market is a great filter for finding passion-driven entrepreneurs. It's really not about the money.

The passion that spurred the rise of Linux initially has never left. It remains in the surge of adrenaline that you see in places like SourceForge. Products arise from the open source world to build new companies on modified business models - models that still rely on product, not just information. But the soul of these new companies isn't in the money, it's in the work. Open source builds product. Dot-coms seldom do.

Savvy companies that adapt quickly and conserve capital may find themselves in a position with few to no competitors.

Linux companies will survive as long as they conserve capital. With valuations down, the ability to spend based on stock is severely limited - companies need real revenue. Fortunately, most of the bigger names can generate real revenue. And in the end, their stock prices will rise because of that revenue. From the revenue, they will invest in the next big project - perhaps a vector based page layout application. As a writer (and an investor) I can only hope.

The European Software Patent Horror Gallery. A group called The Association for the Promotion of a Free Informational Infrastructure has announced the creation of the 'European Software Patent Horror Gallery', a database of software patents which have been granted in Europe. "This database shows that software patents granted by the European Patent Office are even more trivial than software patents granted in the United States." It was unveiled on November 21 in Munich, with Richard Stallman there as a special guest.

VA Linux meets lowered earnings estimate (News.com). After warning earlier this month of lowered earnings, news that sunk their stock price to an all time low and carried other Linux stocks with it, VA Linux reported losses in line with revised estimates of 15 cents a share.

Red Hat Joins Standard 100. According to a Red Hat press release, the Linux distribution and services company was added on Monday to The Standard 100, a stock index of 100 Internet related firms.

EBIZ acquires Jones Business Systems. EBIZ has announced the signing of an agreement to buy Jones Business Systems, a "white box" computer manufacturer. Jones is selling for 8.3 million shares of EBIZ stock, which is worth just over $6 million at current prices. It is claimed that the resulting company will have $50 million in revenue.

Meanwhile, EBIZ also released its quarterly report. The company brought in $2.4 million in the quarter ending September 30 - down from $5.6 million in the same quarter last year. The drop is attributed to a new focus on higher-end Linux systems, rather than cheap Windows boxes. And, in fact, the result was a small increase in the company's gross profit.

Music software company releases Linux product. MusicMatch, Inc. released a WINE based music jukebox player/recorder for Linux. The package is free for download from their web site.

Macmillan USA Announces Release of Linux for Windows. Macmillan USA has released their latest version of Linux for Windows, the Linux-Mandrake based distribution for Windows users.

D.H. Brown Rates VA Linux Systems as No. 1 in Linux Strategy and Solutions. VA Linux Systems, Inc. (LNUX) announced that D.H. Brown Associates, Inc. (DHBA), a research and consulting firm, has rated VA as No. 1 in overall Linux strategy in DHBA's recently released multi-client study on "Linux Strategies and Solutions."

Press Releases:

Open Source Products

• Advantio (GODFREY, IL) has been set up as a commerical entity around the Orasoft suite of Gtk and GNOME based tools for use with Oracle databases.

• Red Hat, Inc. (RESEARCH TRIANGLE PARK, N.C. and SUNNYVALE, Calif.) announced with nBand Communications, Inc., a broadband wireless technology company, a port of the Red Hat GNUPro embedded development tools to nFlex, nBand's broadband wireless communications processor.

Commercial Products for Linux

• Aladdin Knowledge Systems (CHICAGO) announced the release of HASP CD9 software for the HASP4 hardware-based software protection system that offers high-level security for Linux developers.

• 3-G International, Inc. (SPRINGFIELD, Va) announced the release of Passage 3.0, an enterprise security solution that supports the Linux platform.

• Verplex(TM) Systems, Inc. (MILPITAS, Calif.) unveiled BlackTie functional checker, a full-chip, multi-million gate capacity tool for the verification of system-on-a-chip (SOC) designs. This release includes a Linux version.

• Nitrosoft LINUX (OTTAWA) announced the release of its e-Management software, N-able IT Monitor. N-able IT Monitor monitors your hardware and software server activity and provides real time statistical information.

• Trustix AS (TRONDHEIM, Norway) announced the release of the eBusiness Systems management tool for Linux, XPloy 2.0.

Products and Services Using Linux

• Inter-Con/PC, Inc. (LAS VEGAS, Nev.) announced that the company has chosen DiskOnChip, from M-Systems, as the local storage device for its Linux-based CyberSpider TV set-top box, a personal Internet computer device that uses a television as the monitor and includes a wireless keyboard.

• Mission Critical Linux, Inc. (LOWELL, Massachusetts) and Panasonic announced that Panasonic DVD-RAM drives, and Terabyte libraries configured with the drives, support Mission Critical Linux's Convolo Cluster solution.

• Neoware Systems (KING OF PRUSSIA, PA) introduced NeoLinux 2.0, the latest version of its embedded Linux operating system, at Comdex Fall 2000.

• ThePlanet.com (DALLAS) launched a server appliance data center explicitly for Cobalt RaQ products from Cobalt Networks, Inc.

• Zelerate, Inc. (SAN MATEO, Calif.) unveiled its Partners in Education Program (PEN) by announcing that DePaul University and Indiana University will offer e-commerce classes featuring the Zelerate AllCommerce application in Spring 2001.

Products with Linux Versions

• Computer Associates International (ISLANDIA, N.Y.) announced the latest release of version 2.4 of its Unicenter TNG eBusiness management solution. This release now includes support for Red Hat, Caldera, SuSE and TurboLinux.

• CyberTeams, Inc. (MT. AIRY, MD) announced the beta release of version 2.0 of the lite version of its WebSite Director product line. This new release includes significant enhancements, including User Interface Improvements, User-specific Working Directories, an integrated Mime Types Editor, and Dynamic Content (ASP, JSP, PHP, etc.) support. WebSite Director lite is available for Linux platforms.

• MATRAnet, Inc. (REDWOOD SHORES, CA) announced the availability of M>WebTouch 3.0 on Linux and Oracle 8i release 2.

• NetPlane Systems (DEDHAM, Mass) announced availability of the PowerCommunications Development Environment (aka PowerCode) for testing new communications software systems.

• RAM Mobile Data (UTRECHT, Netherlands) has chosen BakBone Software's NetVault storage management software to safeguard applications and data for transportation companies throughout the Netherlands.

Java Products

• Empower Interactive Group Ltd. (LONDON) released its Java-based Empowered WAP Gateway to the open source community.

• Franz Inc. (BERKELEY, Calif.) shipped its newest cross-platform Lisp and Java development environment, Allegro CL 6.

Books and Training

• New Horizons Computer Learning Center (SANTA ANA, Calif.) announced it will provide training to clients based on content developed by Sair Linux Inc.

• Viking Systems Inc. (PHOENIX) announced that founder and President Evan Blomquist has become the first SAIR Linux/GNU Certified Instructor in the world. Blomquist also has a seat on the SAIR Linux/GNU Advisory Board.

Partnerships

• NetNation Communications, Inc. (VANCOUVER, B.C) was selected by GlobalMedia.com to host twelve Internet broadcast radio stations.

• Sangoma.com (TORONTO) announced its partnership with Tech Data Canada where Tech Data will distribute sangoma's line of connectivity hardware and software products for networks and Internet infrastructure.

• Software AG and Birdstep Technology ASA (SAN RAMON, Calif. and OSLO, Norway) announced a partnership to permit the exchange of information between Software AG's Tamino XML database and Birdstep's DataBase Engine on hand-held platforms.

• TeamLinux (DAYTON, Ohio) announced a strategic partnership with Bruewer Woodwork.

• Texas Instruments Incorporated (HOUSTON) entered into an agreement with Jungo Software Technologies Inc. to add Jungo's Linux residential gateway software onto TI's broadband Bluetooth-enabled cable modems.

• TimeSys Corporation (PITTSBURGH) and GoAhead Software announced they will be offering a software solution for complex telecom and Internet systems. As part of this agreement, TimeSys will also be joining the GoAhead Integration Alliance (GIA).

Investments and Acquisitions

• EBIZ Enterprises Inc.(SCOTTSDALE, Ariz.) announced it was acquiring Houston based JBSi (Jones Business Systems, Inc.).

• Firstwave Technologies, Inc. (ATLANTA, Georgia) announced plans to acquire Optomi, Inc., a provider of B2B e-commerce solutions.

Financing and Financial Results

• GlobalMedia.com (VANCOUVER, British Columbia) announced that it has signed definitive share purchase agreements for the purpose of raising US$1 million from Standard Radio Inc. (with participation from two of its executive officers, Gary Slaight and David Coriat) and from Jeffrey Mandelbaum, Global Media's Chairman, President and CEO. In connection with the current financing, GlobalMedia's Board of Directors has been restructured.

• VA Linux Systems (FREMONT, Calif.) reported record revenue of $56.1 million for the fiscal first quarter, 2001, ended October 27, 2000, an increase of 278% compared to the same period of fiscal 2000 and an increase of 11% compared to the prior fiscal quarter.

Personnel

• GlobalMedia.com (VANCOUVER) announced that Board Member Barr Potter has joined the company as President and Chief Operating Officer.

• RidgeRun, Inc. (BOISE, Idaho) announced the appointment of Rudy Prince as CEO and Chairman of the Board. Additionally, Rick Seger has been appointed Vice President of Business Development.

• Sangoma.com (TORONTO) announced the appointments of Gary Collins as its President & CEO, and Michael Hubbert to its Board of Directors.

• TeamLinux Corporation (DAYTON, Ohio) appointed Yit K. Lee as its new Chief Operating Officer.

• Xybernaut Corporation (FAIRFAX, Va.) announced Tod R. Rehm has joined the company as President and COO and Dewayne Adams has joined the Company as Chief Strategy Officer.

Other

• Compaq Computer Corp. (HOUSTON, TX) announced the offering of their ProLiant Servers preinstalled with Red Hat 7.0.

• Enhanced Software Technologies, Inc. (PHOENIX, AZ.) announced that HP Ultrium Tape Drives have been certified to be Linux compatible.

• knowledgelinx Inc. (OTTAWA) announced that knowledgelinx 2000, a Web-based knowledge-sharing and management software application, is available immediately.

• Merlin Software Technologies (BURNABY, British Columbia) unveiled a new look on its web site.

• The New Internet Computer Company (SAN FRANCISCO), the company backed by Oracle CEO Larry Ellison, announced a limited time price cut on its NIC bundle to $319.98.

• TimeSys Corp. (PITTSBURGH, PA.) announced the launch of its Japan-based sales and support office, TimeSys Japan, K.K. Located in suburban Tokyo in the college-town of Kichijoji.

• Turtle Beach Systems (LAS VEGAS) began taking orders for its home-networked digital audio appliance, the AudioTron. It is compatible with all major operating systems, including Linux.

• Xybernaut Corporation (FAIRFAX, Va.) provided a summary of highlights of the Comdex 2000 show held in Las Vegas, Nevada.

Section Editor: Michael J. Hammel.

Next: Linux in the news