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Linux and Business

Troubles at VA Linux Systems. On December 9, 1999 VA Linux Systems had a wildly successful IPO. The first day the stock skyrocketed to $320 before closing at $239/share. It was too good to be true for those who bought stock at the opening price of $30. Well, at least for those who sold while the stock was high. As of this writing VA Linux is at $7.12, reflecting the general trend of the Nasdaq since those halcyon days of late 1999 and the recent announcement that the company lowered its expectations for its second fiscal quarter revenue. (Covered on this week's Front Page.)

VA Linux has been named in a class action suit for alleged SEC violations along with Credit Suisse First Boston Corporation, and VA Linux execs Larry M. Augustin and Todd B. Schull. Several law firms have announced their participation. Oddly, a number of these law firms make the same mistake in their press releases: VA Linux Systems, Inc. is shortened to simply "Linux". In the worst case, this usage could be seen as a violation of the Linux trademark; at best references to "the Linux IPO" make these law firms seem clueless. Press releases from Milberg Weiss Bershad Hynes & Lerach LLP in New York, Cauley Geller Bowman & Coates, LLP in Boca Raton, Fla., Bernstein Liebhard & Lifshitz, LLP in New York and Seeger Weiss LLP also of New York, all shorten VA Linux Systems, Inc. to "Linux".

For the press release containing the most information and one that refers to "VA Linux" rather than "Linux" see this one from Wolf Haldenstein Adler Freeman & Herz LLP of New York.

Also involved are Schiffrin & Barroway, LLP of Bala Cynwyd, PA and Charles J. Piven, P.A. of Baltimore, MD. More law firms are sure to jump in as well. There are a number of firms that make their living from cases such as this. The sharks are circling.

It is not clear how much VA Linux Systems itself was involved in the alleged violations. VA is charged with filing a false and misleading prospectus, but the suit mostly revolves around the conduct of Credit Suisse with regard to the VA Linux IPO. It will likely be some time before this issue is resolved.

All of the law firms are looking for "lead plaintiffs" to help their cause. If you bought VA stock before December 6, 2000 and are inclined toward such things, you may be able to participate. See any of the above press releases for more information.

This suit could hurt VA Linux badly. Just how much remains to be seen. It's worth considering, just as a thought exercise, what could happen to VA's community resources (such as SourceForge) should all of those lawyers succeed in dragging the company down. This is ugly stuff.

2.4 Kernel Pre-Production Release Available from VA Linux. VA Linux Systems, Inc. announced the availability of its first pre-production release of the new Linux 2.4 kernel, offered via ftp at ftp://ftp.valinux.com/pub/kernel/, is available as an executable binary compiled and packaged by VA Linux in RPM and DEB formats.

IBM and NCSA Create Worlds Fastest Linux Supercomputers in Academia. IBM and The National Center for Supercomputing Applications (NCSA) at University of Illinois at Urbana-Champaign announced that NCSA will install two IBM Linux clusters, containing more than 600 IBM eServer xSeries systems running Red Hat Linux. NCSA's clusters will have two teraflops of computing power and will be used by researchers to study some of the most fundamental questions of science, such as the nature of gravitational waves first predicted by Albert Einstein in his Theory of Relativity.

IBM Expands AIX Affinity With Linux. IBM today announced its Linux affinity initiative with the introduction of AIX Toolkit for Linux Applications. Available for download over the Web, the toolkit allows developers to build and package Linux applications for use on the IBM eServer(a) family running AIX.

NuSphere MySQL, new version, training offerings. NuSphere Corporation has released version 1.13.5 of its MySQL distribution.

NuSphere has also announced that it has been granted exclusive rights to the "official" MySQL training materials. The training program was developed by Polycon and Monty Widenius; courses will be offered in Massachusetts and California.

Open Source Infrastructure - A Manifesto for the Coming Big Bang. Deutsche Banc Alex. Brown equity research analyst Phil Rueppel today published an industry report, " Open Source Infrastructure -- A Manifesto for the Coming Big Bang." Additionally, yesterday he expanded his coverage of the Linux Market industry by initiating coverage of Red Hat, Inc. (Nasdaq : RHAT) with a BUY rating ($7.0). "Linux and other Open Source technologies continue to demonstrate the characteristics of strong growth, increased customer penetration, and disruptive change -- all factors that create investment opportunities in our view."

Linux Stock Index for January 11 to January 17, 2001.

LSI at closing on 11-Jan-01 38.32
LSI at closing on 17-Jan-01 38.71

The high for the week was 38.72
The low for the week was 38.32

Press Releases:

Open Source Products

Unless specified, license is unverified.
  • B2B ITS Corp. (STAMFORD, Conn.) has released .FIXantenna Engine under an Apache-style license.

  • Lineo, Inc. announced that VPN support, based upon the IPSec standard, has been added to NETtel devices. NETtel devices are released under the GNU General Public License.

  • North Fork Networks (Palo Alto, CA) announced the availability of its new SANiq solution for Linux-based companies. This alpha release of the software is available from NorthForkNet.com under the GNU General Public License.

  • Trustix has released a software updater called SWUP for its secure Linux distribution.

Proprietary Products for Linux

  • Caldera Systems, Inc. (OREM, Utah) announced the release of Caldera Volution, a comprehensive Linux management solution that reduces the cost of implementing and managing Linux systems.

  • Motorola Computer Group (TEMPE, Ariz.) announced that its Advanced High Availability Software for Linux (HA Linux) was awarded Product of the Year by both Internet Telephony Magazine and Communication Solutions Magazine.

  • Real-Time Innovations, Inc. (SUNNYVALE, Calif.) released StethoScope for Linux, the visualization tool for monitoring and analyzing embedded and real-time applications.

  • SteelEye Technology Inc. (MOUNTAIN VIEW, Calif.) announced an extension of its LifeKeeper Next Generation Enterprise Reliability platform to protect the uptime of Linux-based print servers.

  • SuSE announced the availability of a 2nd generation email server package called SuSE eMail Server II.

  • Tamino Software AG (SAN RAMON, Calif.) announced its native XML database, now runs on SuSE Linux AG's Linux Enterprise Server for S/390.

Products and Services Using Linux

  • Conversay (REDMOND, Wash.) announced its speech recognition technology will be licensed to a Linux PDA being developed by Language Bank and Shin Information Systems (SHINS), both of Seoul, South Korea.

  • Corridor Software, Inc. (GREENBELT, Md.) announced a February 28 release date for its Linux-based Connection Server software. The first beta versions are undergoing internal testing and Corridor will begin shipping the software to qualified testers and resellers around the country in the next two weeks.

  • Fujitsu-ICL Systems Inc. (NEW YORK) announced the Liberator, a new Linux-based point-of-sale software solution that supports and enhances existing IBM 4690 point-of-sale (POS) applications.

  • HELIOS Software GmbH (HANNOVER, Germany) announced the availability of remote Internet Printing, a major new feature of HELIOS PDF Handshake 2.0 now shipping on HELIOS distribution CD016.

  • LAND-5 Corporation (SAN DIEGO, CA) announced that it has certified ICP vortex Corporation's PCI RAID controllers with its Linux-based iceNAS software for network attached storage.

  • Sphera Corporation (NEW YORK) announced AutoHost, a dedicated Linux server line designed for premium Web hosting.

Products with Linux Versions

  • Access360 (IRVINE, Calif.) announced that its flagship software, enRole, now has the capacity to provision access rights to over 50 computing resources - from databases and operating systems to security systems and applications.

  • AMD and Virtutech (SUNNYVALE, Calif.) announced the two companies are working together to further enable the development of software supporting AMD's next-generation Hammer family of processors. They have jointly developed a high-performance tool, codenamed "VirtuHammer", that will allow software developers to write and test 64-bit programs in preparation for the planned commercial introduction of the next-generation AMD processors in the first half of 2002.

  • AVIDWireless (IRVING, Texas) announced the release of AVIDRapidTools 1.2, a wireless application server for the desktop.

  • BindView Corporation (HOUSTON) announced the bv-Control Security Management Suite, an enterprise-class security and policy enforcement solution.

  • Cyrusoft International, Inc. (PITTSBURGH) announced a February 2nd ship date for the Unix-based version of their Mulberry Email Client package. The software is currently available for public testing and download at the company's website. Versions of Unix currently supported by Mulberry include Red Hat Linux versions 5 and later and equivalents, Linux PPC 2000, Solaris 8 and later (x86 and Sparc).

  • FirstPeer (SAN DIEGO) announced the release of Personal Servant, an open unifying platform for bringing together applications, devices and people in the new peer-to-peer paradigm. Personal Servant can be downloaded for free.

  • iMimic Networking Inc. (HOUSTON) announced the new release of DataReactor Core Version 2.1 Web caching software.

  • Ipedo, Inc. (REDWOOD CITY, Calif.) introduced the Ipedo Directory Cache, a dynamic LDAP directory cache. It's available for Red Hat Linux, licensed on a per server basis starting at $25,000.

  • MAPICS, Inc. (ATLANTA) announced the immediate availability of Point.Man release 6.0, providing customers with expanded international and collaborative e-business capabilities.

  • MetiLinx, Inc. (SAN MATEO, Calif.) announced the general release of iSystem Enterprise, a solution for system optimization of networked server systems.

  • MicroVault Corp. (HUNTINGTON BEACH, Calif.) announced the release of NetCourier Secure Document Delivery System, Version 2.0, an e-mail-based solution that permits message recipients to receive and decode encrypted documents.

  • ParaSoft (Monrovia, CA) announced the release of WebKing 3.0, a development and testing tool that improves the reliability of dynamic n-tier Web sites.

  • Sanchez Computer Associates Inc. (MALVERN, Pa.) announced it has extended the logical dual site database replication feature of its GT.M database product to run on multiple operating platforms, including x86 GNU/Linux.

  • SSH Communications Security (HELSINKI, Finland) announced SSH Secure Shell 2.4, a new version of its encryption technology.

  • Sun Microsystems, Inc. (PALO ALTO, Calif.) introduced Sun StorEdge T3 array support for Windows NT, HP-UX, IBM AIX and Linux system platforms.

  • V Communications (SAN JOSE, Calif.) announced that DriveWorks, a wizard driven integrated solution for hard drive management including partitioning, copying, imaging and backing up hard drives, is shipping now.

  • YesSoftware (SAN FRANCISCO) announced the launch of the pre-release version of CodeCharge, a code generation application for database publishing on the web.

Books and Training

  • InfoCan Management is launching a world tour on Internet, Kylix and Palm cross platform development. This is a 2-day seminar that is designed for both Delphi and Linux users. Kylix is Borland's component-based rapid application development environment for Linux.

  • Kaivo (DENVER) announced that they will be partnering with Python developer Mark Lutz to deliver Python education and training with a three day course, "Python for Programmers".

  • Red Hat, Inc. (RESEARCH TRIANGLE PARK, N.C.) announced the expanded availability of its RHCE training and certification program, as well as other Red Hat training offerings.


  • BluePoint Linux Software Corp. (LOS ANGELES) announced that it has signed an agreement with Shenzhen Launch Computer Co., Ltd. According to the agreement, BluePoint will develop BLUEPOINT EMBEDDED based PDA Operating System for Launch Computer. BluePoint will also provide BLUEPOINT EMBEDDED Development Kit, training and technical support. Launch Computer intends to develop automobile diagnostic tools and other automobile service related applications on the PDA Operating System.

  • BSDi (COLORADO SPRINGS, Colo.) and Korea Telecom Internet Solutions (KTIS) announced a channel partnership through which KTIS will provide BSDi software and solutions to the Korean market and provide technical support for the FreeBSD open source operating system.

  • DecisionOne (FRAZER, Pa.) announced that it has been selected by Data Engines as the exclusive installation support provider for the company's iServiceOne product, a Linux-based Security Gateway Server.

  • Digital Creations (RICHMOND, Va.) announced a partnership with bayMountain, a provider of Linux-based managed hosting services. As part of this partnership, bayMountain will provide server clustering expertise and services in support of Zope.org, Digital Creation's high-traffic Open Source development site. In addition, bayMountain will provide the infrastructure foundation for Digital Creations' new content management solution, to be released later this year.

  • Merilus Inc. (VANCOUVER, British Columbia) signed a Memorandum of Understanding with Sun Wah Linux Ltd. The two companies will cooperate in the development, offering and promotion of network security, management and communications systems in the field of education and specifically to education institutions of the Hong Kong Education Department and to the Education Ministries of the provincial governments of the People's Republic of China.

  • Motorola (SCHAUMBURG, Ill. and BRISBANE, Calif.) announced an alliance with CollabNet to provide free web-based project hosting, a collaboration environment, and code storage as part of the Motorola iDEN Subscriber Group's comprehensive developers' support program.

  • WordWalla, Inc. (FREMONT, Calif.) has joined three key industry organizations to participate in the development and understanding of new, emerging technologies and markets -- the Embedded Linux Consortium, LISA and the Unicode Consortium.

  • Zend Technologies (BALTIMORE) announced that it will provide its expertise in PHP for use with the Intel Itanium architecture. As part of this working relationship, Zend will provide developers with a custom PHP solution for optimum performance on Intel's forthcoming Itanium processor.

  • ZF Linux Devices (PALO ALTO, Calif.) announced that the company will bundle Wind River's VxWorks real-time operating system with ZF Linux Devices' MachZ SOC.


  • Digital Creations (FREDERICKSBURG, Va.) announced that it has hired industry executive Thomas Morling to expand its sales and marketing operations.

  • Mission Critical Linux, Inc. (LOWELL, Mass.) announced that former Senior EDS Executive Dennis Hickey has joined their team as Vice President of Sales.

  • Penguin Computing Inc. (San Francisco, Calif.) announced that it has appointed Martin D. (Marty) Seyer as its president and chief executive officer. Seyer will also join the Penguin Computing board of directors.

Linux At Work

  • 1mage Software Inc. (DENVER) announced that the Grandview Heights Public Library, Grandview, Ohio, has selected the document imaging and management system from 1mage. The library plans to have digitized images, maintained on a server using the Linux operating system, made available via the Internet worldwide and through the library's online catalog.


  • CollabNet (BRISBANE, Calif.) announced that the online community, mozdev.org, is rapidly gaining developer support and is becoming the premier online community for Mozilla-based projects that are not hosted by mozilla.org.

  • eWEEK (MEDFORD, Mass.) announced OpenHack III, an open challenge to penetrate and corrupt a fictitious Internet service provider (ISP) and e-commerce site being established by Argus Systems Group.

  • LinuxPPC Inc. (WAUKEHSA, Wisconsin) gave away more than 1,000 LinuxPPC CD-ROMs at Macworld Expo in San Francisco.

  • The PHP Group (BALTIMORE) announced that PHP (PHP Hypertext Preprocessor), the open-source Web scripting language, is now found on more than five million Web domains, according to Netcraft.

Section Editor: Rebecca Sobol.

January 18, 2001


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