Bonus Interview: VA Linux CEO Larry Augustin

We all heard about the extraordinarily successful VA Linux Systems IPO. And, of course, there was an SEC-mandated "quiet period" after that IPO during which VA executives and employees could hardly open their mouths. That quiet period is over. This is one of the first "post-IPO" interviews anywhere with CEO Larry M. Augustin and Linux Evangelist (his official title) Chris DiBona. Ask away!

Comments

IPO madness

[BOredAtWork]

As more and more developers look to start helping Linux evolve, there are going to be some very cool projects popping up. Is there any chance that VA might give the developers of these projects a few shares, or the chance to purchase them at reduced price? There are also a great many people suddenly showing interest in getting subscribed to developer mailing lists; I've heard at least two comment that they're just hoping to get IPO letter s from the Next Big Company. How closely was the friends-and-family list reviewed to make sure that the individuals were deserving? Do you forsee IPO-prospecting having an impact on development? For example, Joe Developer saying "hey, i'm gonna develop X rather than Y, because there's a better chance of making some money from Company Q's IPO that way."

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Long Ago...

[Shaheen]

A long time ago, in a college dorm room far, far away, you (Mr. Augustin) helped Yahoo!'s two founders (I forget their names) draft their business plans. The legend goes that you were offered a lucrative job opportunity and/or stock options. However, you refused to join them to build your own business.

What made you really believe that being a Linux systems retailer would make it big? Also, was it ever a contest to see who could be worth more money? In that case, who is worth more money? You, or the founders of Yahoo!?

Can VA Linux develop enough?

[Malor]

I'm curious whether or not the higher-ups at VA Linux think it's possible to develop the company enough to be worth its stratospheric valuation.

Obviously, a high valuation is partially a self-fulfilling prophecy, because it gives that company the ability to buy others with its high-priced stock. But I would be interested in any other strategies Mr. Augustin has in mind to develop VA Linux into the enormously valuable company the stock price suggests, and how it will affect its relationship with the Open Source world.

I suspect that creating vast companies like Microsoft, based on Linux, is simply impossible. An enormous service-based organization might be possible, but it seems to me that it would take many years to build one. The GPL is designed to prevent the monopoly, hardball shenanigans that Microsoft pulls. Can building hardware and providing expertise instead generate enough revenue?

Intel influence behind the scenes?

[RelliK]

A while ago VA Linux Systems (then called VA Research) used to offer Alpha systems. But soon after Intel's investment in VA, the Alpha systems disappeared. Last I checked AMD systems were not offered either (and don't tell me there is no demand for either Alpha or AMD). Intel is the *only* choice.

My question is: being a Linux company, will you continue to offer people a choice or will you, like Dell, become a slave to Intel?

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Collaboration with Larger Hardware Vendors?

[dave_aiello]

What has your relationship been, if any, with the larger, more established Intel-based hardware vendors? Do you feel that there is any opportunity for a Linux-centric hardware vendor like VA to work with these companies?

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Dave Aiello

Question - More locations in the USA/Internation

[RandomFreq]

Are there any plans to open any locations in the USA, or preferably(for me anyways, considering I live in Canada and it'd be nice to have the ability to buy those kick ass computers locally ;) in Canada? I heard some mumblings that there was a location in Toronto, but I can't seem to find any mention of it. The only problems with this is dealing with the issues of being an internation company at such a young stage, but I'm sure its something that can be easily overcome by multi-billion dollar company =) Also, are there any plans to sponsor events internationally?

How will you compete?

[UM_Maverick]

I remember reading something in your IPO filing about competition from other computer makers. One of the concerns was about what will happen when the traditional "big boys" (Dell, Compaq, HP, etc...) start making linux boxes. As others have mentioned, VA boxes tend to be a little pricey. How do you plan on competing once other people start selling the same Intel-based servers that you sell, for 20% less? Will you have to build a new market for Linux systems (much like you built the original market), or will you be able to take them on straight-up?

Competition with other Linux vendors

[Dacta]

While VA Linux's and Redhat's core business (hardware and distributions) may not be in competition, it seems that both companies are moving aggressivly into the online information/commerce market with sites like Linux.com & Redhat.com.

Do you worry that competition between sites like these (and Andover & LinuxCare etc) might run against the co-operation that has been Linux's strength?

Do you see a time in the future where you find yourself in a position where your companies interests and those of the general Linux community (and other Linux companies) don't match? How will you deal with that problem, bearing in mind you have a duty to your shareholders?

Competing with the big boys

[Jay Maynard]

With the big computer companies such as Compaq embracing Linux, what is it that differentiates VA Linux Systems? Why should a company buy one of your boxes instead of one of theirs?
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Why wait on desktops?

[Cy Guy]

During your Charlie Rose interview last week you seemed to discount the readiness of Linux for the desktop. Don't you think that what Corel and others have done recently has shown that Linux will be ready for the desktop by this summer (once kernel 2.4 and Xfree86 4.0 have been released and fully vetted of bugs), if not sooner?

I see a great oppotunity for Linux to establish itself as companies are deciding whether to transition to Win2K or Linux for their servers. One factor in their decision is that MS is marketing Win2k as an OS for both desktops and servers. I think the Linux community has to be prepared to argue it is just as ready for both platforms.

VA Linux Software Patent Intentions

[Aaron M. Renn]

In your S-1, you mention that you have applied for a patent. Here is the relevant paragraph:

Our systems consist primarily of commodity hardware components in
combination with the Linux operating system. While we have developed some
proprietary techniques and expertise, most of our activities and systems are not
protectable as proprietary intellectual property and may be used by competitors,
harming our market share and product revenues. To protect our intellectual
property, we generally enter into confidentiality or license agreements with our
employees, consultants and corporate partners. We have also recently commenced a
patent program and to date have filed one patent application. In general,
however, we have taken only limited steps to protect our intellectual property.
Accordingly, we may be unable to use intellectual property to prevent other
companies from competing with us. In addition, we may be unable to prevent third
parties from developing techniques that are similar or superior to our
technology, or from designing around our copyrights, patents and trade secrets.

I realize you will not want to disclose the details of your pending patent application, but I am interested in knowing whether or not it is a software patent. And, what VA's policy towards software patents is, in general. Will VA apply for software patents? If so, how will they be licensed? Will they be made available on free software terms to free software developers?

Linux Development

[Hrunting]

As a Linux systems retailer, you're in the unique position of actually being able to foster development of the operating system that you sell with your systems.

What areas of Linux do you see as needing the most attention? As a company, what would be the best change(s)/addition(s) to Linux and/or it's distributions to help you market your systems?

THE question, plus some minor ones.

[Nicolas MONNET]

Much like most net-related IPOs, VA's valuation is impressively high. Much higher than bigger and older companies which have proven to be able to actually MAKE money. So let's assume that this valuation actually means something. How do you see VA Linux fulfilling this promise, IOW, what will it be like when it will sell as much as its stock price mean? Will it compete directly with Compaq and the likes on the server market?

On a related note: VA Linux is currently mostly in the Linux server and workstation market. Are you considering expanding towards other devices, like special purpose appliances?

And last BUT NOT LEAST. There's a few reasons why I'm not going to buy a VA Linux box NOW. Well first of all I live in Europe and I don't think you do sell here. And then ... YOUR CASES ARE UGLY! :) Not that it's THAT important, but that's one of the reasons why I've always dreamt of an SGI workstation ... So are you going to hire a designer anytime soon?

Joint marketing effort?

[Floris]

What I have always been wondering about when watching all the little companies (and the not-so-little companies) that build and support Linux as an OS is when we will see Linux commercials on big-time commercial TV.

Some CEOs of Linux-related companies have said that their goal right now is to "grow the Linux market" rather than competition with the other vendors. The main competition would be Microsoft rather than each other.

However, Microsoft has a massive marketing machine at its disposal. The Linux vendors dont have nearly its marketing muscle. Are there any plans for a joint marketing effort to counter that?

Prices and availability

[FascDot Killed My Pr]

Two questions:

1) Every time I need to buy a computer (for self or business) I check out VA Linux Systems. But your prices are always $500-$1000 higher than even the Microsof-tax laden goods from someone like Gateway or Dell. Is this all due to volume discounts or is there something else at work?

2) When will VA Linux be selling laptops?
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IPO Question

[jezzball]

I know how you choose the people you picked as friends and family (being one of them), but were there any specific HOW-TOS you looked through? Did you weight projects? Is there a place where you've amassed this information for people to look at?

I was quite surprised myself at being picked, as several other people who I felt have contributed more than me weren't.

Jezzball (Jobe)
ls: .sig: File not found.

Plans for other platforms?

[imac.usr]

Specifically, the new PowerPC motherboards that some companies are planning to build...is VA planning any systems around these boards, or do you see a market for platforms other than i386 in your company's future?

The next step

[DarkRyder]

Now that the IPO period is over, what directions do you see VA Linux moving in? Are there projects that have been placed on the back burner until the IPO could 'make it possible'? If not, have projects been untertaken, or put into the planning stages, that wouldn't have been if the IPO hadn't taken place? Or is this just a calculated business move, with no plans beyond simple, steady growth as a company behind it?

Your view of Linux and the open source movement

[God I hate mornings]

I've been watching with keen interest both Linux and the open source movement with great interest for the past few years. Now with anything Linux being the darling of Wall Street, it would seem all one has to do is mention Linux and watch the rush of money.

My question is this:
How do you, personally, view your fellow Linux distributors? Do you see them as competition to be toppled? Or do you view them as competitors in a worthwhile cause?