LinuxOne At It Again?

Anonymous Coward writes "Check out the recent LinuxOne news release. LinuxOne reports a $500,000 software order from Power Source. Its interesting how Power Source seems to be only a recursive add link without any substance. I couldn't quite figure out, beyond self proclamation, how LinuxOne is one of the fastest growing software distributors in the world. Go figure." At least the LinuxOne Web site is a little more fleshed-out than it was when we first saw it. And they're hiring, too. Check it out!

Comments

We've got to get the word out!

[Bruce Perens]

In a recent press release, LinuxOne announced a $500,000 software order from "Power Source" of El Cerrito, California.

What LinuxOne didn't mention is that Power Source runs out of a tiny storefront, and their "distributors in 130 countries", an exaggeration, run flea market tables. One of these distributors is usually seen at the Livermore Ham Radio Flea Market here in California, where he occupies one of the $10 tables.

While Power Source appears to be a legitimate business, it is extremely unlikely that they could have $500,000 cash to pay to LinuxOne. Rather, they probably made a deal to sell $500,000 worth of product, when and if they can, without pre-paying for much of it at all. But you would not have realized that from the LinuxOne press release.

There's a pattern here. LinuxOne persists in posing as a company with bright prospects in Linux, but look at what they have done: They are completely unknown in the Linux community, their officers are newcomers to Linux, and nobody known in the Linux community is on their technical staff (if they really have one). The founder of LinuxOne was previously behind NetUSA, which is trading around 60 cents a share, one tenth of its value a year ago. LinuxOne copied Red Hat's S-1 form (the form submitted when making a public stock offering) almost word-for-word, claiming that they have the prospects of Red Hat, a company that entered Linux 5 years before LinuxOne and employs hundreds of people, including some of the best programmers in the Linux world. LinuxOne's products so far appear to be mock-ups: their Linux CD is Red Hat's CD with the words Red Hat removed and LinuxOne filled in. Their "Linux on a disk" product is a Linux CD that someone installed on a hard disk, probably in a single day, and then they copied the disk. A claimed Linux system that runs on top of Windows called LinuxLite appears to be misrepresented in its functionality if it exists at all. LinuxOne staff have not written any significant Linux software to date that I can find, the only software they appear to have written is a program that displays a clock on the X window system.

And this is the company that has registered the stock symbol LINX and is going to take $23 Million from investors who don't know better, any day now. I think it's a really bad investment. But I'm prejudiced: I happen to have a Linux company too. Fortunately, you can hear the same message from other respectable people in the Linux world. For example, read this article in The Register by Rick Moen, a respected, long-time participant in the Linux community.

I've been a Unix operating system kernel programmer since 1981, and have worked on Linux since 1994. Another employee of my company has been working on Linux since 1993 when he started one of the best-respected Linux distributions. We're hiring other people with similar backgrounds. We have paid our dues and we have a proven performance record in the Linux world. There are a number of new companies similar to ours in the bacgrounds of their founders and their technical staff. These companies are not going public until they have real products, and when they do go public, they have some reasonable prospects for success. In contrast, I don't feel that LinuxOne has any prospects, I think they've been very sleazy in their press and promotion, and while it is remotely possible that anyone could build a real Linux software company with that $23M, it makes sense to invest in people with more skill and background than LinuxOne.

I can't save those investors from having their money go down the drain. Some people tell me that I shouldn't feel sorry for people who make poorly-researched investments, but I feel horrible about this. It's going to make Linux look bad and a lot of innocent people who don't have someone experienced in Linux to warn them are going to be hurt.

Somebody has to speak out. Please tell your friends. Tell everyone you know.

Bruce Perens

Re:We've got to get the word out!

[Jon Peterson]

Bruce wrote: "They are completely unknown in the Linux community, their officers are newcomers to Linux, and nobody known in the Linux community is on their technical staff (if they really have one)."

While I broadly agree with you that LinuxOne appear to be a fraud, and a sleezly one at that, I can't let this comment get away.

You seem to me to be suggesting that companies wishing to base a business on Linux should somehow serve an apprenticeship in 'the community' where they will recieve the benevolent blessing of the 'known figures' of the community, and they can then trade acceptably.

This is not a bazaar. This is a situation remarkably similar to the late medieval trade guilds in northern Europe, which did an excellent job of serving their own interests and stifling competition, all in the name of maintaining standards.

To hell with the ESRs, ACs, and the other figures of our supposed worship and gratitude. If I one day have a great idea for a new kind of folding chair, do I need to grovel before the established figures of the chair industry? Do I need to play the game of being a good little manufacturer that doesn't push their luck? Do I need to employ some 'well known' chair designers to establish my credibility in the market place?

The hell I do. I get my capital together, I go out there, and I try to prove my products and ideas in the marketplace.

Likewise with Linux. If one day I say "That's it!!" "I've just figured out a create way to do package management!", do I then need to prove my worthiness by hanging around on some RPM mailing list and demonstrating on my CV that I've contributed to previous package management projects?

No, I do not. I write my code, and I go out there and say fair and square "This is a better way of doing it. You've never heared of me, you don't know I am, I don't employ any 'known figures' but I've got a new product that frankly works a hell of alot better than the old ones. Please use it".

Employ known figures indeed. Sounds like some of the famous traders in the old bazaar don't want too many newcomers setting up stalls unless they pay their dues.

Pah (with respect, but Pah, nonetheless)

Educate and Complain!

[mdb31]

I have to agree that this is going way too far: there is a thin line between IPO optimism and fraud, but it seems quite clear that LinuxOne does not have the best interests of investors in mind. (Nevermind the Linux community: whatever will happen here will have a bad reflection on it...)

But anyway, what can you do? Linking to one of the more recent in The Register from your web site or in your .sig is probably a good idea.

If you're a US citizen, also complain to the SEC, the government organization overseeing everything related to stock trading. Their web page is here, and makes it quite clear that what LinuxOne is doing is potentially illegal:

For example, it is unlawful in certain situations for someone to sell securities to you while withholding important information that could affect your investment decision, such as selling you stock in a company but not disclosing to you that the business has no existing operations or selling a stock to you for ten dollars per share when the seller knows the stock is worthless.

I'd say they'd at least take a good look at LinuxOne if enough people complain...

The LinuxOne world, according to Chas.

[Chas]

Here's what I see.

1. Shady history of the founder, and a past venture that now exists at 1/10th the initial valuation.
2. A "linux company" that was, until very recently, completely unheard of within the Linux community. One with NO known factors from that community.
3. A "linux company" with no real product. Incorporated in Nevada so that they were not subject to the full disclosure (Like "Uhh. We have no real product") required by other states.
4. A "linux company" who's supposedly forthcoming product is basically RedHat (or Mandrake) with all the names and serial numbers filed off.
5. A "linux company" whose open source soloution is "get it from Mandrake", in clear violation of existing licensing.
6. A "linux company" that photocopies another company's IPO, save for underwriter support. The IPO service they're going with is extremely low profile and extremely green in the market.
7. A share price set, not by estimating value on an existing product (since one doesn't exist), but on an arbitrary "this is what we thing the stock is worth" guesstimate from the "people" who run the "company".
8. A "half million dollar contract" from a little storefront that wishes it was Walnut Creek. The announcement of which is almost certainly a violation of the SEC-imposed quiet period.
9. A storefront with a Hotmail account as it's business contact. Hosted by a provider whose own site is barely more than an "under construction" sign.
10. A storefront whose main customers appear to be small computer shows and flea markets.

Now, for some reason, this inspires ZERO confidence in me (not sure if there's such a thing as a negative level of confidence, so I won't go that far).

In fact. The only thing it inspires is haiku.

Big Ripoff I See
Their business profile screams SCAM!!!
No dough shall I waste


Chas - The one, the only.
THANK GOD!!!