Interview: Larry Augustin Finally Answers

Yes, we know this is overdue. We put up the original Ask Larry Augustin post on Jan. 10, and here we are posting Larry's answers on the 27th. The first few weeks after an IPO are hectic for any CEO who is involved in one, and we understand this, but the wait has been as frustrating for the Slashdot staff as for anyone else, and there was nothing we could do about it. Anyway, finally, here are Larry Augustin's answers to your questions.

1) THE question
by 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?

Larry:

We're building a serious company here and we plan to grow significantly, and I think our valuation reflects that. I think we are undervalued compared to some of the other companies out there based on the potential of Open Source and our target markets. The market opportunity is huge.

We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia.

As those customers grow, we grow with them. Intel estimates that only 5% of the servers needed to run the Internet by the year 2003 are deployed today. That's a huge market for VA Linux. That's where investors see the big potential.

But you have to understand more about what we offer those customers. On the surface, people think we're a hardware company. We're not - we're an Open Source company. We work directly with those customers to solve their problems using Linux and Open Source. We offer some of the most powerful high-density rackmount servers for the Internet server market as part of that solution. Since you mention Compaq, in at least two instances I know of VA engineers have rescued large installations using Compaq hardware. Although we offer the best hardware for Internet servers and will continue to do that, that's only a fraction of what we do. We have a tremendous amount of expertise in Open Source, and it's really that expertise that we offer to our customers, and you can see some of this in our announcement this week with HP. The systems side of the business really just gives us a solid platform on which to build a known, stable, and supportable solution for our customers.

So the one thing underlying all of our business is our commitment to Open Source. The computer industry is changing; Open Source is emerging as *the* way to develop software in the next decade. The companies that figure out business models that work around Open Source will succeed. At VA we will be the leader in Open Source. I've built a company with a commitment to Open Source at its core. I don't want us as a company to have any incentive to develop proprietary software. I'm building a company that succeeds if Open Source succeeds. That creates a business model where supporting Open Source development (through initiatives like SourceForge.net) are absolutely critical to us. We will be Open Source pure.

2) IPO Question
by 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.

Larry:

Sometimes going second has its advantages. One of the pieces of feedback we had from the Red Hat program was that people in the developer community wanted to understand how their names were picked.

From the beginning we decided to create a process that was as mechanical as possible in extracting names of contributors Open Source projects in general and Linux specifically. Chris DiBona and Chip Salzenberg assembled a set of custom scripts that scanned for developer names. It's best if I just leave the description of that process to Chris.

Chris:

There is a lot more to this question, so this is a long one...

When it was clear that we were going to go public and we wanted to do a community program, Larry and Todd (Our CFO) asked me to start working on putting together a list of folks to target.

Since I got word pretty early (before the initial S1 filing). I wanted to plan for as much flexibility as possible, as I knew that while I would probably be in charge of administering the program that final say on who we wanted to help would be not just mine, but on the shoulders of Larry and others (like ESR, who is on our Board).

So I first got mirrors of Sunsite, gnome.org, kde.org and many other software repositories. I wrote a perl script to rifle through them and un tar.gz the source code therein. It worked out to about 11 GBs of files. I then ran an e-mail scanning script that Chip Salzenberg cranked out for me against the archives to pull e-mail addresses.

This netted about 17,000 e-mail addresses. Each e-mail address was stored with a reference to all files it existed in.

I then went through the list by hand and got rid of bad addresses. This included things like lug addresses, root@ addresses and corporate info addresses. I also removed known silly addresses (foo@bozo, billg@microsoft.com) and straight errors that got through (1024x768@75mhz and such). This brought the list down to 12,000 e-mail addreseses.

I set these addresses aside and began accumulating contributor lists for various projects including gnome, kde, cpan, debian and others. These when concatenated with the top 1000 addreses from the scanned addresses amounted to about 3500 e-mail addresses. Since our orignal target was to provide 2700 people with an opportunity to participate, we felt 3500 was an appropriate target.

We were wrong. About three days into the program, we realized that our returns were much less than anticipated. At this time I scambled to include more people, I took the next 1000 from the scanned addresses, the beta developers from SourceForge (another 950) and a bunch of people were added anyhow because we simply missed them (about 200 or so) We also realized that due to a glitch in the scanning process a chunk of the kernel credits list was missed and I added those folks and made sure they were notified. For the most part if somone had been in the kernel list, they had already e-mailed me personally and I had already added them.

Our selection process (including Sourceforge) meant that Open Source developers on other platforms were allowed in as well, which was cool by us as we feel open source benefits all platforms.

In the end we got to include about 1500 people from the community, when we realized that we were going to have more shares available in the community pool, we reallocated to allow people to recieve 140 shares. At this time our price had gone up to $30, so we allowed people to take part at the 50 share level if they still wanted to participate and didn't have the money for the full 140 or 100 shares. Someone on Slashdot suggested this, BTW.

Everything went very smoothly, and I'd actually like to thank everyone in the free software community. Why? Well, as many of us now know, the VA IPO was very hot, we had an astonishing number of people calling, e-mailing and visiting asserting that they were a community member, and we took all of them seriously as that's the right thing to do.

The reason I want to thank everyone is that, 99.9% of the time, we were able to tell right off if someone was legit if they were nice. For the most part, everyone we included in the program was nice, and everyone who was trying to get into it fraudulently was a jerk. It made it really easy, so thanks, I appreciate it and the folks at the Underwriters said that the folks in the community program were just about the nicest people they've had to deal with in any designated share program they can remember.

Also, to those who have done things in the free software world and were not given an opportunity to participate, I just want to say thanks for your hard work. We do appreciate it, but we were working with a limited number of shares and we had to stop somewhere, but this doesn't mean that we don't appreciate you or what you've done.

As a last note, we are -very- sorry we had to send such a huge e-mail out to everyone. A megabyte is a really big e-mail to get unexpected. The SEC was very clear on this, we were given the choice to send it out with prospectus and forms in a PDF format or not offer it at all. And since for 90% of the list all we had was e-mail address, this meant spamming a lot of people. In the end, I personally decided to do this, as I felt it would have been a greater error to not include free software developers in our IPO. So in essence I had to decide what was worse, spamming or exploiting the community. I chose to spam rather then exploit. I still feel bad for it, but I do feel it was the appropriate thing to do.

3) Prices
by FascDot

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?

Larry:

First of all it is not our intention to be the lowest cost source of a box. We're not just selling a box. Typically we're selling a great deal of service and support around the box, and in the end the customer gets a better value as a result.

But if you're just comparing box prices, it also depends on what you are looking for. We do competitive pricing comparisons weekly versus Dell, Gateway, and many others. We work very hard to make sure we are comparing similar configurations. We have some configurations in the server space where we consistently come in lower because we have products that are better suited to the customer. In other cases, we have configurations that are consistently higher. For example, our StartX MP dual processor desktop system has easily a lot more cooling and power than anything else in its space in the market. Frankly, the chassis and power supply are over-engineered for a dual Pentium III desktop. As a result, we look a lot more expensive when comparing products in that space; the quality is apparent until you open the system up and do things like thermal profiles inside the chassis.

Also, I don't think people realize that we do a tremendous amount of engineering on our products. Every disk drive is flashed to a known, qualified firmware level. We regularly work with disk drive manufacturers to fix firmware problems. We need to do a lot of qualification that a Windows supplier has already done for them. For example, we had an incident in November where we attempted to qualify a major name-brand memory supplier under Linux on one of the Intel server motherboards. We expected it to be easy because Intel and the memory manufacturer had already qualified the hardware under NT. Well, Linux is not NT. We could make the memory fail under Linux. In normal operation the error might show up as a system hang once every few weeks. That's unacceptable to us and our customers. We log thousands of hours of testing of every component and configuration before we qualify it under Linux. No one else does that.

4) The next step
by 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 undertaken, 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?

Larry:

As we said in our prospectus, we'll be using the net proceeds from our IPO to fund operating expenses including broadening our professional services division, hiring more R&D personnel, and expanding our sales operation worldwide (starting in Europe). Another important benefit from the IPO is the credibility it's given us as a company. A lot of prospective customers who might not have considered us before the IPO now look at VA Linux Systems as a company they know will be here over the long term. We're publicly accountable now, and we're focused on execution. It's a responsibility all of us take seriously.

5) Plans for other platforms?
by 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?

Larry:

We're always looking.

6) Your view of Linux and the open source movement
by 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?

Larry:

We are distribution neutral. I believe there is one Linux. We have pre-installed various distributions over time, and we're committed to supporting standards and customer preferences on this issue. Most of our customers don't really care too much; in internet infrastructure implementations, most people have very specific loads customized to their needs. We help them with that customization as part of our added value, and we pre-install the results. We often start from Red Hat, but based on customer demand we have also started making plans to offer standard Debian and SuSE based loads this year.

I can't remember actually competing with a distribution company for customer business. We typically partner with them. We put our competitive focus on counter- or quasi-Linux companies such as Microsoft, Sun and Dell.

7) Joint marketing effort?
by Floris

Watching all the little companies (and the not-so-little companies) that build and support Linux as an OS, I have been wondering about when we will see Linux commercials on 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?

Larry:

For practical reasons, we're not planning any TV ads. Most of our sales are to folks that buy based on information from other sources.

8) VA Linux Software Patent Intentions
by 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 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?

Larry:

We have applied for a patent on the techniques we used in the design of our FullOn 2x2 high density rackmount server. We have some unique packaging technology there.

I personally believe the patent process with respect to software is broken. However, it has not been a priority because we have not applied for any software patents.

9) Intel influence behind the scenes?
by 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?

Larry:

We dropped Alpha well before the Intel investment because we didn't have the resources to support Alpha and Intel on Linux. However, we're always exploring all of our options.

-------

Comments

Patents and IPOs

[Kagato]

Well, some of the questions were skirted (ie using PPC or AMD) but it's damned refreshing to see someone in a high possition say what we all know about software patents.

So many times I read "So and So has the legal obligation to share holders to patent software...blah blah blah..."

As far as sour grapes about not making the list...well, hey no matter what they do they will never make everyone happy. It's just not possible. At least they are making a try at it. Most IPO's only go to large valued customers at big brokerage houses. I.e. Not John Smith with the e-trade account.

It's called speculation

[Wholeflaffer]

What we are witnessing in the Tech sector is speculation. People are investing speculatively for two reasons:

1. They expect future growth in the market sector (Linux Servers in this case), and expect companies with large market share today to retain that share in the future.

2. Everyone else is doing it.

Without the Tech sector, Wall Street is showing lackluster performance. We're to the point where the only way big, established companies can grow and increase profits is through mergers.

People looking for money grabs in today's market are jumping on board a massive roller coaster on its way up...and after it crests, it'll go down really, really fast, taking every stock owner along.

I own stocks through my employer's deferred compensation plan. I am nervous.

Re:What?!?

[um... Lucas]

There used to be a time when companies were generally valued at 7-15 times earnings. As people have gained confidence, that level has been growing. And no, amazon didn't invent the whole valuation scheme. But it arose somewhere between Microsoft and Yahoo. Amazon was just there to ride the wave as far as it could.

The whole tech industry is suffering from over inflated stock prices. Yes. Suffering. Becuase once the bubble bursts, lot's of former millionaires will once again be mortal again. It's only a matter of time before the gov't puts the breaks on the growth trend we've been having for the past decade. And then what?

I'm not saying I'm smart. I'm just saying that Wall Streets insane. They're all hunting for the next Yahoo's, Amazons, or Microsofts... WHen they pump up a companies value, most companies don't realize it's because of traders and not themselves.

Let's see LNUX is 131 a share today.... Would you buy it at $90/share in 6 months? But you need to pay today. That's how shorts work.

No... I don't have the money to gamble on something like that. Sorry, but though the street seems to be sanening up, it's still much too insane for me to get into anything like.

Yeah, and u didn't think Larry reads /. either.

[Anonymous Coward]

Try getting Bill Gates to respond to someone's ego-bruised post.

Re:Why

[benedict]

If you supplied an email address, I would do so, through Virtual Crack. But you don't, so I can't.

Re:AMD Dodge...

[Tower]

Hmmm, I'm pretty sure they don't have one... the FIC board you mention is probably the PC-133 DRAM, AGP 4x board... AMD is still working with other vendors to produce the chipset...

http://www1.amd.com/products/cpg/result/1,1265,5 12,00.html

Re:No way... Amazon has already won

[Zoltar]

IMHO Amazon is smart to branch out. All of the .com's who are just specializing in books will loose, just like all of the mom and pop bookstores. How many of those are in your neighborhood today. Not many in mine, but I can tell you where the B&N and Borders are... It's kind of sad really. I despise all of the "Super Stores" / Wall-Mart's...

Books are a commodity, most people will buy on price if they consider all other things equal. I think that if soemone can find a way to get next day shipping at no additional cost and be *very reliable* then they will win.

I agree with your point about the Amazon branding, I think that there are a lot of newbies who don't even know enough to look anywhere else but Amazon when they want to buy a book online.


This whole thing kinda ties into the problem that VA Linux will have unless they can really prove that they give you better service and better boxes than Dell... Computers are a commodity and many people will buy on price...

Re:No way... Amazon has already won

[Tim Behrendsen]

Well, remember that fundamental business rules haven't really changed. You still have to connect products to customers. It's the communication with the customer that's changed. It's never been more direct, or less expensive to present your wares to an individual.

However, that doesn't mean you don't have to market anymore, maintain warehouses/inventory, service the customers, or whatever. Once you've decided to launch a new product line, you have to hire experts for that domain, line up suppliers, reserve inventory space, buy inventory, on and on. And when you're amazon, you can't just slap up a web page and see what happens. What will happen is that you will get a flood of orders, and Amazon has to be ready to receieve those orders. That means more servers, more customer support reps (who have to be trained on the new product, which means you have to write training manuals, etc).

Let's face it... e-commerce is just catalog mail-order, going all the way back to the original Sears catalog. The web just makes it easier to automate the ordering systems. In essence, rather than a clerk entering your order into a fulfillment system, you are entering the order directly into the fulfillment system. And instead of having to print catalogs, you can instantly see what's available.

But it still boils down to ordering from a catalog.

Eventually a lot of these companies will have to justify their valuations. Some of them are going to grow into being justified, and others aren't. If anyone is going to grow into justification, it will be Amazon because they have the branding. Some people think branding is dead, that people will just hop from site to site looking for the best deal. Some will, but I bet most won't. Never bet against the laziness of the average individual. Most won't worry about saving a few bucks when they can go to a place that's comfortable, hit one button, and the order appears on their doorstep without any fuss or trouble.

--

Re:What?!?

[Anonymous Coward]

In 1999, the CEO of SCO called Linux second-rate hackerware. In 2000, SCO announced they were supporting Linux. Wonder if that makes SCO a bunch of second-rate hackers?

Ummm, yes, it does.

Re:desktop market

[Anonymous Coward]

VA even used to sell some laptops.

I guess they know more about the future of the Linux Desktop (along with virtually all of the other commercial supporters, except maybe Corel) than we do.

Oh, and if you're willing to go it alone with Corel, keep dreaming.

Re:The shareholders will not win

[Tim Behrendsen]

Amazon needs to completely run Borders and Barnes & Nobles out of business to realize the price of its "future growth".

Not at all, for two reasons.

1) Amazon doesn't have to be a monopoly to be the dominant player in a space. One of the rules of branding is that it rare to have more than a 50-60% marketshare. Above that, people distrust you because they feel their choices are limited. For Amazon to be considered a winner, they only need to have the dominant marketshare.

2) But, as you point out, to justify their valuation they probably would need the entire book market. That's why Amazon doesn't care about domanating the book market, they want to dominate the web retail market. In essence, they want to be the department store (or Wal Mart) of the web. It's no coincidence that Amazon hired a lot of high-level executives from Wal-Mart. WM is incredibly efficient in their distribution systems, and it's that experience that Amazon wanted.

Bottom lines, it's not about the books. It's about product diversification.

--

Re:Prices

[jra]

Nicely put, Technos. Nicely enough, in fact, that I used it as a springboard for a rant, only peripherally related to this interview.

Since it's only partially related, I've put it here.

The magic word is TANSTAAFL.
Cheers,
-- jra
-----

Re:consult what?!

[minek]

Man, you kicked Larry's ass !
The guy didn't think Starmedia staff
reads (and apparently posts to) Slashdot ???
I'm wondering how is the rest of his
consulting services...
And what's so special about his hardware except
bigger fans and thicker cables ??

Re:Why

[Anonymous Coward]

FreeBSD scales better than Linux because of several differences deep inside the guts. FreeBSD handles virtual memory in a way that allows it to use lots of it without as much overhead. It also uses device drivers that are written to a tighter standard than Linux drivers (this is why FreeBSD drivers are easy to move to Linux but not necessarily the other way around) and device performance is often faster. With lots of load, these differences can get significant.

Valid Comment ?

[LiteForce]

As those customers grow, we grow with them. Intel estimates that only 5% of the servers needed to run the Internet by the year 2003 are deployed today.

Just 5% ?

But I thought the world was running out of IPv4 address space really fast; and as IPv6 is still a long way from roll-out, surely this statement is either false or IANA is gonna have to get their skates on to get more sites ready for the move to IPv6!

Re:Valid Comment ?

[Anonymous Coward]

Just because only 5% of the servers in 2003 are now deployed doesn't mean that only 5% of the IP address in 2003 are already being used. I could easily see that a lot of these servers are replacements for existing servers.

Re:Why no AMD

[Anonymous Coward]

I wouldn't say that is because of Intel influence but Intel offers better channel support for their products then AMD does.

Intel owns a chunk of VA. Is this what you mean by channel support?

No way... Amazon has already won

[Tim Behrendsen]

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.

But the reason they have won is that they won the branding war (which is the only war worth winning). They knew that they had to spend giant dollars to rise above the noise of every clown598.com.

Say what you want about Amazon, but they have succeeded brilliantly in diversifying from books. In five years Amazon will be the Wal-Mart of the web.

--

Re:No way... Amazon has already won

[sethg]

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.

And if they do that, how long will they make a profit, before a competitor with more aggressive marketing and infrastructure takes over their market share?

"I can pay off my credit cards any time I want. All I have to do is sell my car and hitchhike to work instead...."
--
"But, Mulder, the new millennium doesn't begin until January 2001."

Re:No way... Amazon has already won

[Tim Behrendsen]

And if they do that, how long will they make a profit, before a competitor with more aggressive marketing and infrastructure takes over their market share?

Well, no one said it was easy to stay on top. The point is that once they have built their brand and have diversified their product lines to a sufficient extent, they can dial back a lot of these expenditures. It's extremely expensive to launch new product lines.

I mean, you make it sound so easy ... just use "more aggressive marketing and infrastructure to take over the market share". In practice, it's not that easy. Ask competitors of Wal-Mart (or Microsoft, for that matter).

By the way, it's not as if Amazon is hiding any of this strategy. Read their financial reports.

--

Re:No way... Amazon has already won

[Tim Behrendsen]

Well, I have to admit that I didn't know about this "accounting trick", although I would prefer to see the original data rather than relying on the mainstream press to report accurately.

Still, I think the point still stands. Amazon has by far the strongest brand on the web. B&N has the overhead of real stores, so the overhead advantage should go to Amazon.

Also, you're just focusing on the books. I think most would agree that just the book business would not justify the valuations, but if Amazon can truly become the department store of the web, then they could justify their price.

I mean, it's not as if Amazon has wimpy revenues. There is a lot of room for them to improve their product fulfillment and efficiency. I just don't think they are particuarly focusing on efficiency at this point; their stated short term goals are to build brand and expand their product lines.

--

Re:No way... Amazon has already won

[SEE]

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.

Nope. As Forbes points out, Amazon's "marketing" costs include packing and shipping books and CDs, and the costs of storing things in its warehouses. That means a major part of their so-called "marketing" costs are intrinsic to each sale itself, and cannot be cut.

At the same time, the entry of competitors is going to cut into Amazon's latitude. Amazon originally discounted a larger number of their books than they do now; the result is a number of customers have defected to BN.com, which has a borader selection of still-discounted books. Amazon's book division can't turn a profit if it returns to the old pricing scheme; it also can't turn a profit (in the long run) if BN.com consistently undercuts it on the same products.

Amazon itself admits its current buisness model is unsustainable in the long run. It is simply my analysis that Amazon will not be able to successfully transition to a sustainable model that justifies anywhere near its current valuation.

Steven E. Ehrbar

Re:No way... Amazon has already won

[SEE]

Yes, Amazon has lower overhead overall then B&N. Barnes & Noble has the advantage that it actually turns a profit on the brick-and-mortar operations, which essentially makes the BN.com warehousing free and serves as "deep pockets" for on-line discount wars.

And the focus on books was just to serve as an example of what can happen in the music, DVD & video, electronics & software, toys & video games, and home improvement areas -- all units which Amazon says are further from making a profit than the books division.

I just don't think being first is going to cut it in the long term. As Amazon starts hurting brick-and-mortar retailers, they're going to respond with their own Web sites, with their own established brand names. And those web sites will be competeing with prices subsidized by their brick-and-mortar revenue streams, market research already being done by their brick-and-mortar stores, and the addition of web addresses to the ads they're already buying.

No, they won't like canniballizing their own sales -- but they'll prefer it to letting Amazon eat their lunch.

Steven E. Ehrbar

Re:No way... Amazon has already won

[Anonymous Coward]

It's extremely expensive to launch new product lines.

That sounds suspiciously like old-business-rules being applied to a 'new' company that supposedly doesn't play by those rules. If this is a new era, one where the old P/E rules don't apply, and one in which Amazon isn't severely over-valued... well, then it's an era where "launcing new product lines" is as inexpensive as putting up a new page on your site, clearing out some square footage in your warehouse, etc. Granted I am simplifying things a little, but come on!

Is this the "new era" or not? Don't try to use "old rules" where it's convenient.

no AMD at VA - sigh...

[TheGratefulNet]

of COURSE it is due to intel's influence. intel is known to yank boards and chipsets if there's any sign of allowing choice in competitors boards and chips.

but that as may be, I was never in love with VA in terms of their customer-defined configurations. I tried several times to buy systems from them, but I did need to specify the motherboard I wanted used (I'm a system builder as well but I needed a totally built and warranteed system so that I could expense it at a previous job). they refused to even try to obtain that board (an asus mboard - which is hardly a step down!). and when I wanted to buy just a RAID subsystem (disks + controller + case) they would only sell complete turnkey systems (ie, it had to be a full cpu/ram/video/keyboard/etc system). and like I said, it was years ago before they went "big time" - I can only imagine there's less flexibility now than back then.

so my business always went with local system builders due to VA's inflexibility to work with me as a customer.

on the positive side, my current company does have a few VA systems and I must admit that their cases and fans were well selected. there is so much cooling in that system, that apart from a very expensive supermicro case or server cube, their system is the most ventillated one I've ever seen. but that was before they went all-intel - so I'm not sure what their current systems are like. nor will I spend the time to find out - there are many other system builders out there; ones that are willing to build to my spec.

at any rate, as a loyal linux advocate, I do wish VA well. for many customers, the level of service and customization is just fine for them.

--

Re:no AMD at VA - sigh...

[tytso]

I was never in love with VA in terms of their customer-defined configurations. I tried several times to buy systems from them, but I did need to specify the motherboard I wanted used (I'm a system builder as well but I needed a totally built and warranteed system so that I could expense it at a previous job). they refused to even try to obtain that board (an asus mboard - which is hardly a step down!).

Sure, you can ask a local screwdriver shop to install whatever motherboard you specify. But are they going to support it afterwards? Will they do thermal studies on the motherboard to make sure it's being adequately cooled in that specific chasis? Will they have done enough testing to be sure that there aren't any BIOS upgrades necessary for Linux to work as smoothly as possible? Can you call them on the phone afterwards when something fails to work, and expect them to service it appropriately? Or will they just say, "if it boots Windows, it's OK; now go away!"?

It's awfully hard to do all of these things if you allow the customer to specify what motherboard to use, what disk to use, etc. If you want that kind of flexibility, and are prepared to go it alone when things don't work, then it may very well be that a local screwdriver shop is a better fit for the kind service that you're looking for.

Re:no AMD at VA - sigh...

[TheGratefulNet]

Sure, you can ask a local screwdriver shop to install whatever motherboard you specify. But are they going to support it afterwards?

for me, specifically, that's not an issue. I just need warrantee support if the hardware stops functioning. I never would go to VA for software support - usenet is quite good enough for me. I've survived this way for over 5 yrs now (I started with linux in the 1.1 days). and if usenet or deja doesn't have a quick answer, I am a sofware engineer so I can Use The Source(tm). yes, I admit, I'm not the typical VA customer..

BIOS upgrades necessary for Linux to work...

linux doesn't use much of the bios, so this is a non-issue.

Can you call them on the phone afterwards when something fails to work, and expect them to service it appropriatel

the local shop that I patronize has helped me out many many times. they answer questions on the phone much better, will get stuff that I need - even if they don't stock it normally, will be quick to help get a unit serviced, and have sat/sun hours as well ;-) so as long as I can handle the linux end myself, the vendor just needs to handle the hardware end. and they do - perhaps better than VA.

--

Re:Why no AMD

[fastpage]

VA Linux uses mostly Intel products. Intel motherboards, CPUs, and chassises (for their servers). I wouldn't say that is because of Intel influence but Intel offers better channel support for their products then AMD does. You can buy virtually whole solutions from Intel that "work out of the box". That statement is more true for their server products then desktop. Intel also has a fair amount of kick backs for their products. So everytime you sell a cpu/motherboard/chassis/ network card you get a kick back from Intel. Obviously this is factored into the price by Intel. Intel also offers free training to resellers big and small. They have an extensive web site for resellers. AMD is harder to support because you have to use a completely different motherboard. This is not saying AMD sucks or their chipsets suck but its that you have to do x2 work for another CPU. VA Linux only has the man power to test and validate so many products so they streamline them so its easier for them. I know all this for a fact because I use to work for a reseller that does many of the things VA Linux does. VA Linux isn't a hardware company because you can basically buy all of their components that they use off the shelf with a few exceptions I would guess. Check developer.intel.com and then look at the products VA Linux sells. If you buy from VA Linux you're buying into their Linux support/expertise as you might not get from another vendor like Compaq or Dell. I know this probably sounds like a love fest for VA Linux but I don't work for them nor have I ever bought anything from them (nor do I plan to). But its simply how things are.

What kind of consulting services?

[Duxup]

Does anyone know what type of consulting services they provide to those companies?

Re:What kind of consulting services?

[Anonymous Coward]

Well, if he's smart, he'll say the consulting consisted of the following professional advice: "Don't do it!"

Re:Put your e-mail address everywhere in your code

[chrisd]

Hi,

I don't know about the other ipos coming down the pike, but with ours those email addresses were scored and hand checked before being added as backfill on the contributor lists.

As far as spam traps went, for those that bounced back with instructions, we followed them, but it was our experience that a small number of people actually missed out. Most people who felt they deserved being included and had super spam traps emailed me and we went from there.

Chris DiBona
--
Grant Chair, Linux Int.
Pres, SVLUG

Christians shouldn't use Linux anyway

[Anonymous Coward]

It is my opinion (NOTE: MY OPINION ONLY) that Linux is not an appropriate operating system for Christians to be using in the first place. Therefore, one of the planks of your grand conspiracy joke falls through, and only the Holy Roman Empire is left standing! I think we can take care of the Holy Roman Empire. What do they have? Catapults? Roads? Oooh, we're doomed. :)

Re:Christians shouldn't use Linux anyway

[Anonymous Coward]

In your opinion, what operating system are we supposed to use?

Re:Christians shouldn't use Linux anyway

[jp93023]

Consider that God might prefer Linux on some counts -- quality of workmanship for one. See the instructions for building the tabernacle (Exodus). God is a quality freak. For that matter, look at your own person "fearfully and wonderfully made", as the psalmist says.

Imagine a world created to the quality standards common in proprietary, shrinkwrap software. No, I think God must be a Linux user -- but which distro?

Re:Christians shouldn't use Linux anyway

[Anonymous Coward]

I USE LINUX, BECAUSE I WORSHIP SATAN, YOU JESUS FREAKS CAN GO BACK TO WINDOWS FOR ALL I CARE.

Re:Christians shouldn't use Linux anyway

[pnagel]

Hmmm. If God is pro-Open Source, I suppose genetic engineering would be OK, then :-)

Re:Put your e-mail address everywhere in your code

[jezzball]

As poster of the original question, I'll let you know that my name goes in the AUTHORS file (if in the ChangeLog, it gets there very frequently - more frequently than every file). My full name goes in the source to give credit where due, not to promote myself. However, it appears I was picked because of the SourceForge beta testers, of which I was one.

Jezzball
ls: .sig: File not found.

DoubleClick and Etoys

[schmeis]

I guess even EVIL companies can use Linux :)

Re:DB Alex Brown

[cburley]

I for one am very glad that VA chose Alex Brown, rather than the less fun experience I heard was had in Red Hat's share program.

Having been through both RHAT's and LNUX's IPO invitations, I certainly agree.

I'm sure RHAT, and those (LNUX et al) who would follow, learned a lot from that RHAT IPO. I hope E*Trade learned how to better, and more consistently, do things like manage their web site, answer questions, etc.

Dealing with Deutsche Bank (during the LNUX IPO) was delightful, and, IIRC, we always got consistent and correct information.

Re:Why no AMD

[Anonymous Coward]

"It seems likely that VA must have some sort of deal with Intel "

Yeah, the deal is that Intel owns part of VA.

Re:Why

[kvajk]

I'm gonna reply to this, at the risk of pissing off the FreeBSD folks. :)

In my opinion, the reason FreeBSD hasn't caught on to the extent that Linux has is that they really don't care much about user-friendly type issues. It's no surprise that GNOME and KDE are coming from the Linux camps, for example.

Now, FreeBSD can be made just as friendly. For example, you can build the Linux software (or just run the binaries using FreeBSD's amazing binary compatibility). But the point is, user-friendliness is an extra, not the default.

FreeBSD is great, but their focus has been primarily on servers and hardcore UNIX geeks, not on non-technical users, and it's cost them the fame that Linux now has.

Prices

[Duke of URL]

I know there was a question about the higher prices of VA boxes compared to other competitors (and I read it too). Sometimes appalingly higher. I'm wondering, is there anyone out there who has bought some VA servers and found that the added "services" touted make up for the price. Is it, or was it worth it to you?

Re:Prices

[dtaye]

might as well go with solaris 8 on x86 (free) and cheaper hardware - VALinux is low to mid range, but the real deal is Solaris (uptime, scalability, etc...)

Re:Prices

[technos]

I use and enjoy Solaris on Ultra, but for some odd reason every time I touch Solaris x86 I feel.. Dirty.. I suppose its philosophical, since theres nothing terribly amiss with the OS itself, though I miss the Forth.

It's kind of like the feeling you get when you walk into a gay bar without knowing it... There's something wrong, not with any one thing in particular, but with the thing as a whole, in the way the individual elements fit together. I have no problem with homosexuals, nor with getting a beer in a convenient gay bar, but the feeling you get from the place is different in a subtle, intangible way. I suppose I'll one day be using Solaris and it will dawn on me, much like the revelation that hits you when you notice that the two burly red-neck types are really dancing with each other..

Re:Prices

[NiteEyes]

My only experience with a VA Linux box was fixing one. The internal HD would sometimes not be available at boot time. Troubleshooting finally led me to opening the box and peering at the SCSI cable. The cable was pretty long for an Ultra Fast/WIDE SCSI setup... I ended up putting the hard drive on the connecter at the beginning of the cable as opposed to the middle where I found it. Never had a problem with the thing since.

What was funny about that was tech support thought they were selling Ultra2 (LVD) setups, which could support the longer cables. Maybe the builder thought so too. Oh well.

Re:Prices

[jdwtiv]

I have one of the StartX MPs (but with only one processor) I was a little worried about having a third box in my small office, because it was already getting a little warm. I was quite suprised when after a couple days I checked and there was actually cold air coming out of the machine... :) (So I would tend to believe the overengineering remark)

As for whether it's worth it or not, it is worth it to me to support companies who I believe "are doing the right thing". Things like rewarding Open Source developers, hosting sourceforge, etc. If that's not as important to you, you'd probably be better off saving some money.

One thing I did think about when I originally saw the question was mac people. For 10 years now, mac folks have paid more for identical hardware/software, I'm not a mac fan by any means, but at the same time I do respect people who are willing to pay more for something they believe in.

Finally, if price were really the only consideration, wouldn't Packerd Bell still be the #1 pc maker? So quality does fit in there somewhere :)

Re:Prices

[Hackboy]

I know there was a question about the higher prices of VA boxes compared to other competitors (and I read it too). Sometimes appalingly higher. I'm wondering, is there anyone out there who has bought some VA servers and found that the added "services" touted make up for the price. Is it, or was it worth it to you?

We've started using VA boxen at work. We stuck one of their 2x2 servers in our web rotation and tried to beat it to death. We hit it with 2x and then 4x the traffic that our normal servers would get. The box just kept humming along.

The Mayor Daemon stuff looks like it's a major win too. Being able to redirect the console output from a machine at a co-loc facility back to your desktop can make life a lot easier.

And I must say, after meeting our local VA rep, if the rest are like him, they have got to have some of the best service out there.

Re:Prices

[Duke of URL]

Well I didn't say I wanted a plastic POS box. I want a good investment, and I just had not heard enough about VA to trust them yet.

I'm looking for good solid servers and when I compared them with other well known companies I noticed price descrepancies. Thus I wanted input on what the users thought of VA's systems.

The CEO can tell me that they over engineered and put together a great product, but so will alot of other CEOs. The difference is I know the other older companies 'well enough' to know when its crap or truth. All of your comments have been very helpful. I get the idea that they are a solid company and will soon have a strong (and well knowon) reputation for quality products and service.

Thanks for your imput. I bet VA Linux is happy to see all of you answer my questions (and happy with your experiences). I'm gonna go look at their 2x2 a little more closely now.

Re:Prices

[technos]

For someone who is looking at a 100% uptime box it does make a difference.. And Augustin is right, they overengineer to death! Powersupplies often double the required wattage, extra case fans, fans on the drive rails, cable routing clips, bigger heatsinks, hi-grade cables, and everything burned way beyond norm. If you can deal with slight interruptions like bad cables, memory error, don't buy VA. But I can honestly say the party that uses that VA is oh so very happy with it..

Re:Prices

[jdwtiv]

> Well I didn't say I wanted a plastic POS box. I want a good investment,
> and I just had not heard enough about VA to trust them yet.

I didn't think you wanted a POS, the PB remark was simply to play devil's advocate and say that even though most people talk about price, there is a certain amount of quality we've all come to expect, even in the computer hardware market... :)

Re:Prices

[mindstrm]

The VA box I purchased, VarServer 1100 or some such.. (not available anymore.)... I forget the exact model. The price was comparable to similar equipment from Compaq.
The difference, of course, was that it came running linux, and all the hardware was supported. this, by far, was the biggest timesaver for me. As a corporate IT manager, I don't have to purchase the absolute lowest cost box. You don't just buy compaq over dell over VA over IBM based on price, you must factor in everything.

VA offered me a box that did what I needed, when I needed it, and it's still running smoothly to this day. (200+ days uptime).

Would the compaq have done the same? Probably. Would I have had problems when I called them for support because of linux driver issues? Probably. What if Linux didn't work on it, the way I wanted? That would have been a problem. I would have had to spend several days setting it up and finding drivers, as well. And is several days of my time worth an extra $500 on the server? YOU BET!

Re:Prices

[mindstrm]

The VA box I purchased, VarServer 1100 or some such.. (not available anymore.)... I forget the exact model. The price was comparable to similar equipment from Compaq.
The difference, of course, was that it came running linux, and all the hardware was supported. this, by far, was the biggest timesaver for me. As a corporate IT manager, I don't have to purchase the absolute lowest cost box. You don't just buy compaq over dell over VA over IBM based on price, you must factor in everything.

VA offered me a box that did what I needed, when I needed it, and it's still running smoothly to this day. (200+ days uptime).

Would the compaq have done the same? Probably. Would I have had problems when I called them for support because of linux driver issues? Probably. What if Linux didn't work on it, the way I wanted? That would have been a problem. I would have had to spend several days setting it up and finding drivers, as well.

Memory testing software?

[komet]

For example, we had an incident in November where we attempted to qualify a major name-brand memory supplier under Linux on one of the Intel server motherboards. We expected it to be easy because Intel and the memory manufacturer had already qualified the hardware under NT. Well, Linux is not NT. We could make the memory fail under Linux. In normal operation the error might show up as a system hang once every few weeks. That's unacceptable to us and our customers.

Do you have any special software you use to test the memory in this way? What is the exact method of memory testing? Anything open source?

This would be of great interest to me, and certainly to others too. I've bought duff memory several times in the past and proving (to oneself and the retailer) that it's broken is often very difficult.

Re:No PIIIs in February

[jmauro]

Remember the Register is not the most reliable source about anything. I serously doubt there will be no PIII's for that long. It just doesn't make any sense for anyone.

Open Source mentioned

[asad]

Was it really necessary to say Open Source 15 times in the first two answers ?

Re:Open Source mentioned

[Anonymous Coward]

It's not like we're little Open Source Smurfs here

BUt did you OpenSource the Open Source with the Open-Source?

Re:Open Source mentioned

[Anonymous Coward]

It now has COMPETITION from Linux (and its less stable derivative, FreeBSD).

Did you really have to mar your otherwise fairly reasonable comment with such flamebait?

386BSD derived OSes like FreeBSD don't need childish attackers.

Re:Open Source mentioned

[Anonymous Coward]

crack-head.

Re:Open Source mentioned

[Duxup]

I noticed that too. It did seem to be a bit gimmicky didn't it?

It's not like we're little Open Source Smurfs here who have to hear variations on the words Open Source in every sentence or we lose interest or gain anymore than we already have.

Re:Open Source mentioned

[Anonymous Coward]

Was it really necessary to say Open Source 15 times in the first two answers ?

Well, it was, but only if you look at it from a marketing perspective. The aim is to capitalize on the buzz and general hype surrounding all things Linux/Internet.

Open Source is just the latest trendy bandwagon that the suits and Wall St sharks have latched onto in their eternal quest for the almighty $.

When will the long-haired left-wing idealoges that support Linux climb down of their high-horses, and deal with the fact that these days, Micro$oft is not the only money-grabbing marketing driven provider of Operating Systems. It now has COMPETITION from Linux (and its less stable derivative, FreeBSD).

Once you start to see it from this logical perspective, you will come to the conclusion that Open Source should have been mentioned even more frequently.

But then, who's counting ?

dmg

Linux (and its less stable derivative, FreeBSD)??

[Anonymous Coward]

Where did that "information" (about derivation and relative stability) come from?

DB Alex Brown

[Matts]

DBAB (now BT Alex Brown) were the nicest bunch of people I've ever dealt with over the phone. I honestly expected to be treated like a "newbie" to stock trading - and believe me I am - and asked some awfully naive questions... but they were all answered with patience and respect. I for one am very glad that VA chose Alex Brown, rather than the less fun experience I heard was had in Red Hat's share program.

Now if only my govt didn't want to take 40% back off me :-/

Re:DB Alex Brown

[dillon_rinker]

If my income was high enough that the govt wanted to take 40% of MY income, I wouldn't be complaining. Or was that a humorous exageration? It's been a rough morning and I may be humor impaired...

Re:DB Alex Brown

[modred2]

I believe that proceeds from the sale of stock is consider a capital gain which, I believe, is taxed seperately from the rest of your income. The tax rate for sales of stock held for a short amount of time do indeed approach 40%.

Re:DB Alex Brown

[PapaZit]

Okay, I'll bite...

Add up federal, state, and local taxes. Now, throw in sales tax and the (substantial) hidden corporate taxes and tariffs that raise the price of items on the shelf.

I don't make that much, but if I could pay a flat 40% in exchange for eliminating all other taxes, I'd be getting a good deal.

Not that I'd like paying that much...

Re:Why

[benedict]

I think that Linux became more popular at first due to the legal uncertainties surrounding BSD at the time. The BSDs have carved out comfortable niches on the server side and tend to have neither the inclination nor the number of developers to compete with Linux for popularity on the desktop.

I believe FreeBSD runs GNOME and KDE just fine, though. So there isn't any technical impediment to using it on the desktop -- just less development momentum.

Whoops

[Your_Mom]

Someone should point out that the link to the "original story" leads you to the backslash editor for the story and not the original story itself. Whoops!

Here is the actual link

I defend Roblimo!

[FascDot Killed My Pr]

When I didn't see Larry's interview at week one I was disappointed and confused. When I didn't see it at week two I was crabby and confused. When I didn't hear anything from the /. editorship I was also insulted. So wrote a comment about it.

Roblimo, (seemingly) alone among the /. editors reads the comments and responded to me with an apology. I accepted but suggested that the rest of the /. readership needed an apology as well. I'm assuming that his comments constitute that apology.

Well done, Roblimo!
---
This comment powered by Mozilla!

Re:AMD Dodge...

[skullY]

Not to mention that there isn't a dual-proc solution out the for the Athlon yet- I want one, though 8^)

Not true. I saw a dual processor Athlon board at the Fremont Fry's last november or so. It sold out rather quickly and they haven't got more in yet, but it shows that the AMD SMP stuff is out there, you just need to find it. I think it was FIC that made the board, and the board was ~ $230. We drooled over that for darkstar.frop.org, but at the time we didn't have the cash to get it. Soon, though.

-skullY

Re:Stock price should also be discounted for risk.

[Guppy]

You're right, I omitted this point in my last post.

I'd like to point out the difficulty in knowing just exactly what Amazon's assets are, though. A quick look at Yahoo gives a "book value" of $1.24, but what does that really represent? You can assign hard values to things like cash, office buildings, and inventory, but it is difficult to calculate the value of intangibles like patents and trademarks--which is what Amazon mostly is.

PS: Are you the guppy I know?

Maybe, but your nickname doesn't ring a bell. I am 23 years old, Chinese-American, currently live in Pennsylvania, and graduated from Penn State. Need more personal info to ID?

return of the regime . . .

[Anonymous Coward]

I hope you are like me and aren't taking this guy seriously. He, and VA Linux, represent a serious threat to the community. Just look at his name "Augustin". Now, the parallel that instantly comes to mind is that of the month of August. But we need to remember where that name came from. None other than the Emperor Augustus!!! The threat of the Roman Empire has resurfaced!!!

I'm not going to praise Christianity as a countermeasure to the Holy Roman Empire. After all, where is the Vatican, the "holy" capital of Catholosism? ROME FOLKS!!! It's not an alternative, it's a PART OF THE PROBLEM!!!!

This of course is not without precident. The Romans, as you know, practiced a rather stylized form of paganism. But even THAT wasn't theirs. They stole it from the Greeks, and just changed the names!!! A PR manouver copied time and time again.

The world has changed alot in the past 2000 years, but it is no less ruled by religion than it was. Only now it's not paganism or christianity that rule all business dealings and politics. It is of course scientology. The Roman threat does not represent an END to scientology mind you, it represents the ASSIMILATION of the religion we all love and hold dear!!! You will no longer be Ready to Receive the Knowledge after arduous training, all you'll have to do is PAY OFF THE RIGHT MAFIOSO. It happened to Medeterranian Pagans, it happened to the Catholics and it can happen to us too!!!

I'm not surprised that the next rise of the empire would take place from a linux company. After all, linux is driven by WORLD DOMINATION. Something wrong with this picture folks?!?!?! Look at this smarmy neo-roman; he doesn't even ANSWER SLASHDOT INTERVIEW questions in a timely fashion!!!

We must unite and assure the Church of Scientology does not not bow to Mr. Augustin and VA (Vatican Assassin) Linux. BOYCOTT VA!!! BOYCOTT THIS ARTICLE!!!! BOYCOTT THE WEST COAST OF THE UNITED STATES!!!! THEY'RE ALL PART OF HIS PLAN!!!!!

Re:return of the regime . . .

[Anonymous Coward]

Freakin aye.....what're ye smokin?

Missed Question for Larry -

[rambone]

Larry - how do you feel about VA's stock generally falling like a Led Zeppelin? Would you ever try skiing on a slope as steeply downward as your stock graph?

Why no AMD

[cgadd]

I notice the AMD part of the last question was completely ignored.

I can understand the difficulty of supporting both x86 and Alpha, but support for the AMD (being x86) is much simpler.

The lack of AMD support would seem to be purely due to intel's influence.

Re:Why no AMD

[linux slacker]

Hmm... I noticed that too.

He did say something like: "We'll keep our options open" in reference to supporting Alpha, which, in political business-speak means "We have no current plans, and probably never will - but thanks for asking."

It seems likely that VA must have some sort of deal with Intel - why else would they not move into the (presumably) easy AMD market?

Re:Why no AMD

[Darkfell]

not quite.

considering the ammount of testing that he
said they did with their componenets, i
would imagine that if they added yet another
processor family, and the whole host of
motherboards that are used to support that
processor family, the time invested in testing
and verification may not meet the expected
market. given the number of Athlon boards
and the combination of cards that work/ dont
with them its prob. not worth supporting
AMD until thing settle down a bit.

~darkfell

Re:Why no AMD

[Anonymous Coward]

Yeah, testing and validating a whole new family of chips and boards would seem like a lot of work. Work that a customer might call "service" and be willing to pay for, if the end result was right.

If enough people want VALinux-quality AMD-based servers, someone will supply them.

I guess VALinux has to make the judgement as to whether they can afford (Intel/politically, $$, and distraction-wise) to start something there before there's competition.

BTW, how come I never hear of compactPCI on slashdot? It's big in computer-telephony, and the packaging is much better than PC stuff. See the tabs on the ends of the card shown here? Much easier to remove. And I think the socket pins on the cards are set to support hot-swapping.

Same page has Tux, and Alpha too. Is VALinux watching this kind of stuff?

Re:Why no AMD

[jimiZ]

I agree that the lack of AMD support is probably from an Intel influence. I have no problems with intel, however for a company to push "Open Source" why not have an open mind with chip selection.

It seems to me that he skated the question. It is possible that with the use of AMD the price gap may drop.

Re:Why no AMD

[Anonymous Coward]

The cards are easier to remove and insert because you just rock those tab/handles at the end, and a cam action pulls/pushes the cards out/in far enough to go from seated to loose and vice versa.

Don't know if hot swap is always possible or just easier to design with the kind of connectors at the back (I think power/ground/signal pins engage/disengage in an order that helps).

Re:Why no AMD

[Deosyne]

It may have something to do with this quote from the Corporate Profile section of the About VA portion of their website: "Also during the first quarter of 1999, VA attracted equity funding from well-known Sequoia Capital and from Intel. Likely a matter of not biting the hand that feeds you.

Deosyne

Small Chance

[PG13]

The thing about the internet is that you have a huge new market opening up and everyone knows about it. Now just because of the way word spreads and the fact that people tend to do what there friends do in each internet sector some company will probably come to dominate, or at least split with a few others, the entire market. This means, if you believe internet sales are going to become a large segment of the market, that several companies are going to balloon to absolutely incredible sizes.

We should EXPECT to see new McDonalds and so forth. Small companies whose net worth climes drasticlly. This time Wall Street isn't stupid and everyone wants a piece of that company when/if it does grow huge. So in fact the companies may not be overvalued but they are EXTREMLY risky b/c they veyr well might not corner most of the market

Stock price should also be discounted for risk...

[Guppy]

Oh really? When I was studying finance I learned that the value of a stock should be equal to the sum of a series of expected dividends plus the expected price of the stock when you sell it, all of which should be adjusted for the time value of money. In other words, stock values always have and always will reflect the future projected performance of a company. Amazon didn't invent this.

The stock price should also be discounted based on the uncertainty concerning the "expected price of the stock when you sell it". In the case of Amazon and similar stocks, this uncertainty is substantial. Add to this the fact that Amazon has no dividend (No +1 on your die roll), so that the current valuation is now based entirely on future expectations. The question is -- are these high-flyers sufficiently discounted to make the risk worthwhile?

Re:desktop market

[Wah]

it's a profit margin thing. If you sell more expensive stuff, it's much easier to add a bit of padding. You might make more money with a larger volume and a tighter margin, but that requires a much larger manufacturing/distrubtion infrastructure. They are also a "service/solutions" company, not a hardware or software vendor. And Linux isn't ready for Everyman's desktop, yet (Mozilla will surely help), although the company that figures out how to make it work will make a killing.

service, schmervice... we just want the box.

[ryan_nelson]

Larry wrote:
"But you have to understand more about what we offer those customers. On the surface, people think we're a hardware company. We're not - we're an Open Source company. We work directly with those customers to solve their problems using Linux and Open Source."

...that's just not true, at least not in the case of the *entire* list of companies he mentioned.

Specifically, at StarMedia, where i'm chief systems guy, we've got hundreds of VA's boxes racked up around the world... we *love* the hardware, and love VA's ability to get us another truck full of servers delivered really quickly...

...but we don't run linux on *any* of them. Like several other companies who've been challenged to scale *way* up, we run FreeBSD. On VA "linux" boxes.

i (and other members of my team) kind of resent outside companies talking about how we need their consulting help... it *is* kind of fun to get a "sorry, we don't support that" response from such an "Open Source" company... :)

...we're not so resentful that we'd stop buying servers from VA (did you get that last order, Larry?), we just want to make sure people know there's devil stickers on top of the penguins in our cage.

Re:service, schmervice... we just want the box.

[Cellechan]

here, here! As one of Ryan's colleagues I can attest to that, VA hardware rocks, but FreeBSD is what we use. Its not that we're OS bigots. Its the fact that FreeBSD handles the job we need it to do, where linux doesn't and wouldn't.

Long Live Chuck!

Re:service, schmervice... we just want the box.

[lma]

Ryan, I apologize for the error in my statements about Starmedia. Starmedia just buys systems from us, not consulting. I unfortunately listed a set of customers without being specific about which buy just systems, just services, or both. Maybe I should apply the Open Source model? Consider these release 0.1 of the answers. I'll accept patches and post the 0.2 release. :-) Larry

Best investor's resource: Bob Brinker

[Mayor Quimby]

The best source of information I've ever found is Bob Brinker's radio program, "Money Talk." Bob Brinker is a genius and he is honest. He deserves the Noble prize in economics. I am continually amazed at the accuracy of his predictions and the soundness of his advice. His program is on Saturday and Sunday afternoon. Check out his site: bobbrinker.com for broadcast info.

Anybody agreee with me?

You can thank the SEC

[RebornData]

I'm with a company that IPO'd last year, and the restrictions on what a public company can say are tremendous. Basically, they can't share substantive information with any specific group- they have to share it with everybody in the world at once. So, it's basically impossible for him to say something straightforward and specific about any future plans, until they're ready for "the announcement". It would be impossible for him to give a straightforward answer on AMD- clearly, VA supporting AMD would be a BIG DEAL, and he couldn't say anything about it one way or the other until it's official.

I guarantee that post was checked by a lawyer before it was posted here.

blame Intel, not VA

[MattMann]

all the griping here about Intel inside VA is reasonable griping, but don't direct it at VA, direct it at Intel.

• Intel is doing what smart monopolists everywhere do.
• VA is the victim, not the perp. other victims are consumers, and Alpha/Compaq.
• What else can they do? Intel is free to invest, VA has to accept it if it's in shareholders interest

it's not as if VA is the only company offering Intel products. They are good products (as x86s go). The monopoly practices are the bad part.

Re:AMD Dodge...

[Anonymous Coward]

umm.... There are no SMP Athloon boards, fool. None. 0. Zip. Zilch. None. Understand?

Re:I beg to differ.

[Uruk]

"
Another point i'll make is that these investment banks and brokerage houses really don't give a damn how good a security ACTUALLY is. Whether you, the investor, win or lose money doesn't much affect them. They want to see maximum volume, that is how they make their money. It is in their interest in fact to keep their mouths shut.
"

Not entirely true. Sure, brokerage houses would make a lot of money if the volume simply went through the roof by reaping all of the commisions on the sale, but at the same time, this kinda reminds me of a store owner who rips off his customers is small almost unnoticeable amounts - sure, it's good for profits in the short term, but eventually your customers figure it out and go elsewhere - brokerage agencies don't just get you to buy as much as you can, but try to get you to buy what they consider to be quality - otherwise you don't come back. Repeat customers is what makes or breaks the business in any line of work - quick profits by looking out for nothing but your self interest rarely makes the most money in the long haul.

I agree

[Anonymous Coward]

That lead-in was way over the top snooty. I doubt we'll be hearing from Larry Augustin in the future.

Re:desktop market

[Anonymous Coward]

Since nobody has mentioned it yet, Signal 11 is a karma whore. Thanks.

Re:ummm... nitpick

[MattMann]

well, your post was mostly pretty good, but you did call it a nitpick and you screwed it up at the end so I feel I should meta-pick:

• "safe" is word without a precise definition. better to speak of risk which is defined as variance.
• you describe call options but they shouldn't really be compared to selling short.
• it is speculating (gambling) to purchase on the belief that a security will move in one direction. better to purchase according to overall portfolio risk/return (hedging or speculating). This has nothing to do with what you were talking about, but I feel I shouldn't go forward without noting it.
• so, if one believes that magically one can predict the future better than the market does, and then consider selling short, better to buy puts than calls. Selling calls is good, too, but has the "same" unlimited loss potential that selling short does.

Gee, there's more to say (in the money, or out?) but I'm getting tired of quibbling. Best to say that the risk adjusted expected returns of all securities are the same -- ??? yep, once you take portfolio weight and co-variances into account. :) I.e., there's a place for everybody in the market portfolio.

Moderate "What?!?" down: overrated

[MattMann]

He said undervalued compared to some other companies, and he went on to hint about the market: opensource, though it wasn't clear if he meant compared to other opensource companies or companies that do not understand opensource. So, you are wrong just starting out.

Then, saying that all other investors (the ones bidding up these prices) are wrong, and that IBM is the only company that's valued right is just ridiculous. You're recommending, therefore, that IBM is where all your money should be: good luck. That was bad advice before Microsoft cleaned their clocks.

Believe the market, all people in it collectively know better than you do. Including all of the rare downturns, recessions and depressions, the market is always the best place to put your money, and nobody has a formula for beating the market. And if anyone did? :) They wouldn't be hanging out on slashdot! :)

Re:Capitalism vs socialism/communism

[Anonymous Coward]

Stupid commie.

Re:What?!?

[sethg]

On the other hand, James Suroweiki, in this column and this one, points out that not all Net-related stock values have enjoyed fantastic growth, and some have even gone down. (Including the price of Lucent, my employer, in which I have stock options. Not that I'm bitter or anything.) He thinks this proves that the Internet boom is not a bubble, since if it were a true bubble, investors wouldn't discriminate at all.

Back on the first hand, I recall seeing a paper by some academics in a finance department (sorry I don't have a link), demonstrating that companies could increase their stock value simply by adding ".com" to their names.
--
"But, Mulder, the new millennium doesn't begin until January 2001."

Capitalism vs socialism/communism

[Anonymous Coward]

In your opinion, what operating system are we supposed to use?

Well, probably anything but Linux and the rest of its open source brothers and sisters. Scripture is fairly clear on this. God's law says that we are supposed to earn our bread with the sweat of our brow, and that those who will not work shall not eat. In other words, reward varies with work. Furthermore, God's law plainly says that you shall not either envy or steal what your neighbor has. In other words, private property is absolute.

We can therefore say, with a fair degree of certainty, that capitalism is the economic system that is mandated by God. It is also accurate to point out (in my opinion) that Linux and other OSS operating systems do not fall under the umbrella of capitalist ventures. They are far more suited to socialism and (in a benign, non-political way) communism. The distribution of source code to whoever wants it is exactly like the redistribution of wealth principle that modern socialists base their entire existence on. The Linux model defies God's law by insisting that no reward come from work (other than the "reward" that you're "helping" the fellow member of the "working class".)

Don't get me wrong; this is just my opinion. I believe that I will be sticking with Windows (and soon, Windows 2000!) but I would not dream to try to tell you what OS you should use. All I should point out is that there are some very well-defined issues here that Christians must confront if they decide to use Linux. I myself was a Linux user before these issues were brought up with me at a Circle meeting. I am not trying to attack Mr. Torvalds. As a matter of fact I think that he comes across as a very nice and likable fellow. I just think that he and his operating system are on shaky theological ground.

Re:Capitalism vs socialism/communism

[Anonymous Coward]

I just think that he and his operating system are on shaky theological ground.

I've heard people complain about "religious OS wars", but this is ridiculous.

Re:Capitalism vs socialism/communism

[Anonymous Coward]

FREE BSD OUT! FREE BSD OUT! I COMMAND THEE! IN THE NAME OF JESUS CHRIST ALMIGHTY I COMMAND YOU UNHOLY OS TO LEAVE THIS PLACE! and now hymn no 24: All things right with linux, all kernels big and small, sod those other operating systems, the lord god hates them all.

Re:Capitalism vs socialism/communism

[Anonymous Coward]

God is communist, he loves our mother russia over your capitalist country.

Re:Capitalism vs socialism/communism

[HackLore]

hmmm
how's a bout Luke 4:32b

"None of them said that any of their belongings were their own, but they all shared with one another everything they had"

or Luke 4:34b,35

"Those who owned fields or houses would sell them, bring the money recieved from the sale, and hand it over to the apostles; and the money was distributed to each one according to his need."

It is is entirely false to purport that it is "God's law that no reward come from work"
and these verses that I quote do not fall into the small exception you (erroneosly) mention.

Christianity is not a blue-collar religion, it does not have social distinctions as such, viz. Galatians 3:26-29

"It is through faith that all of you rare God's children in union with Christ Jesus. So ther is no ifference bewtwen Jews and Gentiles, between slaves and free people, between men and women; you are all one in union with Christ Jesus."

Such is Christian thought (as per the new testament).

The berses you mention above are specific rules given in a specific context to the people of Isreal as warnings against laziness. At the time, the nation itself was in a time where survival was critically important, and laziness could not practically tolerated. Even still, there are warnings against laziness all through the bible, but the Bible is an enormous book with hundreds of stories, each with it's own context, albeit there are many lessons which crossover. It behooves you to know the context of what it is you quote.

We can therefore say, with a fair degree of certainty, that god does not mandate any given economic system. Both capatalism and socialism can be used in positive and negative ways concerning religion. Open Source is not a cheap door that lets robbers steal your work easily, it is a voluntary contribution to peer review and use. Even the community itself rallies against "stealing", viz. the Sun-Blackdown fiasco. Open source, linux, et al, is about collaboration for the greater good, not making money off of someobody else's back whilst one slacks off.

Christianity is certainly not capitalist, not communist, nor socialist, nor fascist.

As a member of the Christian Left, I know many people from Christian backgrounds who use linux, and you can trust us that we are not bucking for thuderbolts, god is perfectly ok with socialism, open source, et al.


Micah

Re:Capitalism vs socialism/communism

[Anonymous Coward]

Well, I pointed out several times that I was only stating my opinion. As I said I don't have any problem with Linus or Linux users at all. And if other Christians such as yourself want to use Linux, that is completely fine if you're okay with it. All I said was that I think, personally, that there are some issues to be resolved. On the other hand I must take issue with your comment about God being "okay" with socialism. I don't think that's right. But this is really not the place to argue that so we'll probably have to agree to disagree. Thanks for writing!

I beg to differ.

[FallLine]

The original poster is somewhat mistaken, however LNUX is way overvalued by any traditional measure. They've got a market cap of 5 billion dollars and they're not even profitable yet. To justify these kind of valuations you have to have HUGE expected growth, but what do they have to justify these expectations? 5 Billion dollars is a hell of a lot of money to risk on one fledgling little company without any propietary technology (well almost) of their own. What they have is maybe a marketing position, but then you'd have to ignore the likes of Dell, Compaq, gateway, etc? And can you give me any good reason why VA Linux is in any better of a position to capture the Linux market share than say ASlabs?

Another point i'll make is that these investment banks and brokerage houses really don't give a damn how good a security ACTUALLY is. Whether you, the investor, win or lose money doesn't much affect them. They want to see maximum volume, that is how they make their money. It is in their interest in fact to keep their mouths shut.

My bet (and yes, they're a dime a dozen) is that these Dot Com stocks go the way of the Bio Tech stocks of the 80s and 90s, from RedHot to the plague in 1 second, I suspect within the next year or two. No one is going to want anything to do with them. The real shame is that while these stocks Dot Coms are redhot, they push many more legitimate companies out (e.g., VCs now have a totally unrealistic time frame/turnover and growth (not real growth, but valuations rather) expectations with the Dot Coms). And when they finally plummet, the more legitimate Dot Coms that eventually emerge will find it very very difficult to raise capital. I'm counting the days....

Re:desktop market

[Anonymous Coward]

Your forgetting that most Linux users are smart enough to put their own boxes together. Your also forgetting that most Linux users pick and choose everything they want in a desktop - most people aren't happy having everything set up for them. I'm not.

Why

[crush]

is FreeBSD better than Linux for scalability?

Re:Why

[Anonymous Coward]

Yer just HIGH!.. It's all about the licenses man... all about the licenses.

Re:Why

[Anonymous Coward]

Gimme some of that crack yer smokin!

Re:Why

[benedict]

Personally (and in my capacity as another member of the StarMedia systems team), I like the unified distribution of FreeBSD. I like the way system updates can be done -- I can upgrade a system from say 3.1 to 3.4 using cvsup, make and mergemaster, and be quite confident that the system will still function the way I expect it to afterwards. I like the ports/packages system. I like the mailing lists, which enable to me keep track of what's going on almost effortlessly, and to make my voice heard when I have a suggestion.

Re:Why

[crush]

Would you also recommend it for desktop use? I've not been able to figure out why Linux caught on and FreeBSD didn't. I never heard anything about BSD until after I'd started using Linux in 1995. There must be some sort of catch. And I am _not_ trolling here. I know people get quite hot under the collar about this subject and I don't know why - I'm merely an ignorant RH6.1 user that's used RH apart from brief and unsuccesful flirtations with other distros.

Re:Why

[benedict]

Much too much is made of the licenses. Most people in my experience are more interested in working code than they are in the license.

Remember Linus' comment that were it not for that BSD lawsuit, he would never have started Linux. In other words, the difference between the licenses would not have been sufficient motivation to start Linux.

Re:Why

[softweyr]

Your comment doesn't piss me off, and I'm a pretty hard-core BSD "folk." I think you've provided a fairly accurate overview of the difference in the two communities here.

There are a lot of people who do use BSD for workstations out there, too. BSD even leads in some areas, with support for USB well in advance of Linux, and active FreeBSD and NetBSD members on many of the Open Source application teams now. This is an area in which BSD is catching up to Linux, though.

(2.) It's called the "Greater Fool Theory"

[Guppy]

2. Everyone else is doing it.

In that case, it's no different that speculating with Beanie Baby or Pokemon cards -- as an investment, its value depends on you being able to find a "Greater Fool" to buy it from you.

Of course, the whole idea of currency depends on a similar abstract concept, that someone will give you soemthing desirable for that piece of paper. And we've seen that currencies can suddenly and completely collapse when they become disconnected from that expectation of value.

Spec your system here

[jabber]

To spec your system, try Falcon Northwest. Granted, they're primarily gaming-oriented, but they build the machine to your specifications. I don't know if they're willing/able to build a high-end business system (a'la RAID), but they're a resource.

Expect to pay a premium for the individual attention though. It's someone's time, not another unit off an assembly line.

Re:How Not to Drop Names

[dsplat]

If you're trying to endear yourself to Slashdot readers, perhaps you shouldn't emphasize your ties to eToys and DoubleClick this month. Eh, Larry?

He's being honest. Yes, many Slashdot readers are annoyed at DoubleClick this week. Yes, many of us think it took eToys rather long to get around to doing the right thing. Both of them are potentially very lucrative longterm customers. And if they perceive the open source community as both a supplier of choice and an outspoken portion of their market, rather than a pack of rabid dogs, they would probably be flexible enough to listen to us. For all I know, they read or were told of the discussions here and elsewhere and rethought their strategies as a result. Let's not criticize Larry too harshly for telling us the truth. I vastly prefer uncomfortable truths to lies and evasion.

And speaking of uncomfortable truths, I will join the growing number asking that the AMD portion of the final question get answered. I'd be happy to accept valid business reasons for making a business decision. I just don't like the impression that the question was ducked. I don't think that was the impression he intended to give.

I disagree.

[FallLine]

The brokerage houses ARE collectively making a lot of money. It doesn't take a genius to see the risk involved in many of these equities. It IS going to be a problem.

Historically and empirically speaking, this has been demostrated to be a problem. The 80s and the BioTech crash is a great example of this, it's been demonstrated many times that these firms would keep on pressing them even though they KNEW they the security was fundamentally bad.

Brokering is a fundamentally different issue than selling merchandise. Brokers are merely intermediaries, they don't control the merchandise. The merchandise is beyond their control, and therein lies infinite deniability. Furthermore, most buyers understand that there is a certain amount of risk (unlike merchandise buyers, who expect an absolute gaurantee). So if the buyer were to lose 30% of their retirement money, how are they to know that their problems are the result of freak bad luck, or symptomatic of a larger systemic problem in the brokerage firms? How are they to know that their broker could have known? That it wasn't just the market?

Even without this absolute callousness issue, there is a question of risk aversion. It is not their money that they're putting on the line. A risk of 1% of these companies defaulting might be tolerable to them, but intolerable to the individual that is heavily into those securities. Their customers have to incur some risk anyways (if they want to play the stock market), they add a little more risk, and they can increase their volume by a multiple.... Never mind individual brokers whose interests are not necessarily the same as their brokerage house....Particularly when the customer needs little to no urging.

fred - va logo and ztele logo alike!

[zenzizi]

hello! this is slightly off topic, but i just noticed that a new television channel here in quebec has a logo that tremendously looks alike va's!.. here's the link : http://www.ztele.com/ they are a "science/science fiction" specialized channel on cable. they just leunched. frederic.

We want .....

[Anonymous Coward]

VA if you're listening, give us a laptop running Linux with -
128 megs of RAM
a network/modem
1280x1024 res
under 1500$
and all will rejoice.
Oh yah and the rest of the hardware has to work, .... even the sound!

Re:ummm... nitpick

[um... Lucas]

I've always believed that in order to sell something short, you need to first find a buyer. You two then make an agreement that on a certain date you'll sell that person said amount of shares at the price you agreed to agreed to earlier, no matter what the price is at day. You don't put anything up at the time you make the agreement.

Basically you both have to be in agreement it's going down. But how far down is the real question. If it doesn't go far enough, or heavan forgive, it goes up... you're kinda screwed.

With options, if it goes down, you don't need to buy. With shorts, you can't change your mind and say "oops!" never mind

Re:Stock price should also be discounted for risk.

[FallLine]

I basically agree, however one minor point: dividend's alone to not comprise a companies intrinsic current value. For example, if Amazon had 50 billion dollars in cash and other liquid assets, with no debt, it would be very difficult to give them a valuation much lower than 50b, completely ignoring future earnings. Furthermore, most every high growth (tech mostly) company doesn't issue dividends, because they're supposed to be reinvesting those retained earnings. That being said, I think Amazon is way way overvalued valued.

PS: Are you the guppy I know?

Listen Up

[Rabbins]

I agree and disagree:

Amazon did not invent these valuations, and neither did Microsoft or Yahoo. This same exact speculative bubble has risen around every new medium invented. You name it... from spices to the ol' tulip bulb mania to railroads to cars to telephone to catalougues to radio to TV to one of the most recent: computers.

How many people remember how many computer makers there were in the early 80's?

I remember a few... how about Apple, Atari, Burroughs, Coleco, Columbia Data Systems, Corona Computers, Delta Data Systems, Digital Equipment, Eagle, Franklin, GRiD Systems, Hewlett Packard, Hyperion, IBM, ITT, Kaypro, Mohawk, Data Sciences, NCR, NEC, Olivetti, Osborne, Sanyo, Seequa, Sunrise Systems, Tandy, Televideo Systems, Texas Instruments, Victor Technologies, Xerox and Zenith.

Most of these companies are not in the computer business anymore, and many of them are not in *ANY* business at all. Yet, they were all trading at hundreds of times earnings (if they were earning anything at all) at one time.... Because computers were going to change the world. Sound familiar to anything we are seeing today?

Also keep in mind that some of the most succesful computer makers today had not even come into existance during this hotbed of speculation... Dell and Gateway for instance. First is not always happily ever after.

The internet will change the world. But make no mistake, it is a speculative bubble right now. It will burst. Some will make it, but the vast majority will fail and be replaced by ones yet to come. At some point, stock price *will* equal the actual performance of the company... it always has, it always will. Because after all, you are actually owning a portion of that company with your shares.

Ever read about the 20's? Ever read about the late 60's and early 70's when the so called "Nifty 50" (the majority of them, technology stocks) lead the market to all time highs and were thought unstoppable? Well, in 1972 they were stopped... and they were stopped for the next 10 to 20 years (some have still not recovered).

I choose to invest in companies that have proven they can perform and thrive in tough markets and have great oportunity for growth well into the future. The internet is a fool's market right now, and the majority of the fools will get burned. Just pray that someone is dumber than you when you sell your shares.

Re:Listen Up

[Rabbins]

Ahhh... but you only go on to further prove my point with the nifty fifty. Yes, non-tech companies such as Philip Morris, Coca Cola, Pepesico, Pfizer and General Electric were all in that group, BUT they (being non-tech companies) were the ones that fared best over the next decade.

The ones that fared worst were the tech (and they were high-tech for the 70's too) companies, such as Burrough Comp., Polaroid, Digital Equipment, Eastman Kodak and Xerox.... these were the companies that were selling at the highest valuations (their futures were though to be the grandest). They got creamed the worst.

As for a portfolio of all the computer stocks listed above? I have figured it out. Sure Compaq and Apple did extraordinary. But the combined average annual return for that entire portfolio comes to a fraction over 2% per year. Hmmm... that is not so impressive.

The point is that you stay out of such a speculative market.

Re:Listen Up

[Rombuu]

Likewise I both agree and disagree with what you posted.

First of all, I think a portfolio of the stocks you listed (not that all of them were ever listed as companies, Atari for example) would have done pretty well. There are enough winners on the list to take care of the underperformers. Granted, putting your whole wad into one of them woudl be risky, but thats true today and someone who does that deserves whatever they get.

Ever read about the late 60's and early 70's when the so called "Nifty 50" (the majority of them, technology stocks) lead the market to all time highs and were thought unstoppable?

Hmmm... The nifty 50 I'm thinking of had companies like PepsiCo, McDonalds, Phillip Morris, Avon, Coca-Cola, Polaroid, etc.. Granted, I belive IBM and AT&T were in there too, but the Goldman Sachs Ecommerce Index, it ain't.

I choose to invest in companies that have proven they can perform and thrive in tough markets and have great oportunity for growth well into the future.

Good strategy... Warren Buffet would approve. I agree as well.

The internet is a fool's market right now, and the majority of the fools will get burned.

Hard to say... you only need one or two winners of MS or Oracle like proportions to make up for quite a few tankers.

Re:Listen Up

[sumner]

How many people remember how many computer makers there were in the early 80's?

I remember a few... how about Apple, Atari, Burroughs, Coleco, Columbia Data Systems, Corona Computers, Delta Data Systems, Digital Equipment, Eagle, Franklin, GRiD Systems, Hewlett Packard, Hyperion, IBM, ITT, Kaypro, Mohawk, Data Sciences, NCR, NEC, Olivetti, Osborne, Sanyo, Seequa, Sunrise Systems, Tandy, Televideo Systems, Texas Instruments, Victor Technologies, Xerox and Zenith.

Wang.

Sumner

No PIIIs in February

[autechre]

Intel has stated that they will not be able to supply ANYONE with P-III CPUs in February (check TheRegister). What will Dell and VALinux do then? VALinux may actually be OK, since they aren't super-high-volume in sales, they may actually have enough parts in stock to cover it (their prices may also be an indication that they stock up, rather than buy only as much as they need to stay with falling prices as tiny computer OEMs do).

Re:No PIIIs in February

[mvicuna]

It depends on how you read it.

I read the article as there will be no backlog fills, i.e. you will only get your regular shipment, Intel will not be shipping you the PIII's they didn't ship you in January.

Later,
MarkV.

The shareholders will not win

[Rabbins]

Amazon is still grossly overpriced however. Even if what you say is right, and the first company to assert its brandname will succeed; Amazon needs to completely run Borders and Barnes & Nobles out of business to realize the price of its "future growth". If you buy Amazon right now... that is what you are betting on. Good luck.

Lets not forget a cheaper price is only a "click away".

Re:The shareholders will not win

[Anonymous Coward]

And tech booksellers like bookpool.com and other small specialized sites can seriously undercut Amazon and BN (a blanket ~35% discount on O'Reilly titles, for instance)

I'll never order another book from Amazon.com.

I don't need to, they're not a good deal.

Re:What?!?

[Dudemar]

This is happening everywhere. It's the way of the world. CEO's are paid huge salaries and stock options to join a company based on future expectations. First round draft picks are paid huge salaries and bonuses based on future expectations. Sometimes they turn out like Peyton Manning and sometimes they turn out like Ryan Leaf.

Whoa... moderate this up.

[Anonymous Coward]

This is one of the better rants I have seen in a while. People really do need to wake up and realize some of these things. Has history ever taught us anything? Just maybe.

Re:Stock price should also be discounted for risk.

[Anonymous Coward]

Depends. What guppies do you know?

insert Marge Simpson "Mmmmmmmmm" here...

[Anonymous Coward]

[imac.usr, logging in from a machine that doesn't support cookies]

Well, sadly, my question about PPC went unanswered. Having researched VA a little more since posting that question, I must say it would be nice to get a VA box with a PowerPC board and all the rest of their bits.

Then again, it would be even cooler to get a PowerPC box from these guys instead....

Someone who disagrees with you...

[Anonymous Coward]

Market Strategist Abby Joseph Cohen disagrees with you - check this wired story for details.

Ms. Cohen is a very highly respected, and highly influential stock market forecaster, and she says that all tech stocks are undervalued!

Of course, the fact that she makes money off overinflated stocks, and probably isn't the most impartial observer of this, has nothing to do with her views, I'm sure.

I hope when you read the above, you will take it with the amount of sarcasm I intended... while there is someone who disagrees with you, that person certainly isn't me.

VA vs. Cheapo

[Byteme]

Anyone know what the deal is with these cheap Linux boxes at Onsale? Has anyone bought one of these, or know how they compare to the VA systems? I do not want support... just a cheap box.

Who are you talking to?

[Anonymous Coward]

Based on where you attached your post, it's not clear who you're replying to.

Purpose

[NoWhereMan]

I saw value in the original question because of the confusion over how people were selected. It seems like there now is confusion over the purpose of an email address. You may Sigh!, but suggesting credit == email address seems shortsighted.

A number of people expressed their surprise about being included. There were various motives for participation. While a simplistic view might hold that IPO == credit, I prefer to think of my email addresses as a means for contacting me. Heaven forbid we might exchange valuable information ;-)

boring

[serialk]

how often do good, interesting uninhibited

questions actually get by on here ?

Re:consult what?!

[lma]

Adam, I apologize for the error in my statements about Starmedia. As you said, Starmedia just buys systems from us, not consulting. We are definitely not experts with FreeBSD. In my answers I unfortunately listed a set of customers without being specific about which buy just systems, just services, or both, with the implication being that Starmedia was a consulting customer as well as a systems customer. Larry

I've seen Corel Linux on EuroSport

[DrSkwid]

They sponsored some skiiing or lugeing or some such ice-based activity
I was at a friends house at Christmas and got a Linux surprise. I don't get Cable so I don't know how many more they've done.

.oO0Oo.

Do they get a price break, not needing consulting?

[Anonymous Coward]

Just wondering.

quibbles and bits, quibbles and bits

[MattMann]

you guys clearly know way more than average about finance and have a very good sense of it, so I don't want to criticize but you aren't using the language precisely enough and your quibbles keep requiring more quibbles. All in good fun, of course :)

• the definition of an asset is something that you own which is expected to provide future benefit, i.e. future expectations are built into asset so you don't need to quibble about it. If you want to quibble, it's book values that are wrong unless the asset is marked to market as in your cash example.
• and there isn't a separate discount for risk, but rather the discount rate must reflect the risk or you aren't discounting, you're fudging
• it is the law that companies pay dividends, and there is only an exception to retain them for growth, so expecting future dividends is reasonable.

On that latter point, the definition of valuation that talks about dividiends is simply pointing out that the only way owners can get cash value from their equity is by selling the equity or by getting a dividend from the company (and I guess dissolution?), so valuation must be based on future dividends and future value of equity.

To continue, so I can get to my editorial ; ) Dividends are paid after tax earnings, but dividends are then immediately subject to a second round of personal income tax so investors hate getting them. Investors would rather choose when to sell their equity and they'd rather pay the capital gains tax which is lower. But the IRS wants its taxes so thats why dividends payouts are required. It's highly suspect for a company at one moment to not pay dividends because they're "needed for growth," and in the next moment to buy back equity because it's "undervalued". In actuality, stock buybacks are sleazing the tax law to convert income into capital gain so the dividend taxes don't need to get paid, and so that different investors can make different choices about the timing of the income. But it is even more sleazy for the government to tax income twice, so I hate to complain about this little bit of subterfuge. The real answer is to eliminate corporate income tax altogether and simply require taxes be paid on unrealized capital gain, but I guess that will never happen. If the tax rate were flat we could do the opposite: eliminate personal income tax and just tax businesses which would be massively simpler and would end up with the same tax revenue and less drain on the economy.

By the way, if you are a reader who has not really understood what we are talking about here: It is really unfortunate because most of this is fairly simple common sense arithmetic with a few basic concepts but accountants have invented all of this terminology which is more confusing than helpful till you digest it all. suggestion for slashdot certain kinds of the accumulated knowledge I see on Slashdot should be put into SlashFAQs for Finance, Accounting, etc. It's so sad to see it drift away into the past....

Platform testing for software

[blixco]

I think the statement regarding the testing procedures VA uses vs the (implied flawed) testing that MSFT uses to certify a platform is unfair. The testing process doesn't end at certification for most manufacturers...granted, certification is a big part of testing, but the platforms undergo more than just the microsoft HCT or novell test kit. Where I work, we devote most of the platform lifecycle to testing. Forget hundreds of thousands of hours....some common components have undergone testing for longer than VA has been around. We're *very* serious about platforms being more than capable of a 99.999 uptime percentage.
The fact that you use heavier parts, bigger cables, larger capacitors, and more cooling is nice, but don't discount other manufacturers. Our linux testing is intense, ongoing, and (in my opinion) the toughest in the industry...and it's the same testing that we do on our NT and Novell platforms.

Humor vs. madness

[Anonymous Coward]

Whew. This is a very subtle troll. ( Or do you really let your emotional cloud gazing and the conmen it draws to you drive your choice of OS? I'm impressed that I can't tell.) I await further replies with interest.
-the Mgt.

Re:Jeez, Roblimo!

[Freedent]

Just curious here, but do you read the same Slashdot page that I do?

Mine's at slashdot.org, and the only thing it has in common with impartiality is the a, the t and the r.

Cheaper than a Compaq box

[A nonymous Coward]

I bought a dual PII box a year and a half ago, and to my surprise found a similarly specced Compaq box (NT of course :-) which was MORE expensive, by $500 or so, 3 months later. Not exactly the same equipment, but very close.

--

consult what?!

[firestarter666]

Larry, I do not appreciate your false statements that VA Linux provides consulting services to StarMedia.

As Ryan Nelson, my most senior sysadmin, points out, we do love your hardware immensely, as it suits our purposes well. However, the fact of the matter is that we use FreeBSD, not Linux, which is not where VA's business is focused. As such, we have really not had much involvement with VA outside of ordering hardware, as your team does NOT have the FreeBSD expertise that we require.

In fact, perhaps the only consulting that has taken place was with MY team consulting YOUR team on alternate hardware components to replace those pieces of the host which have no supported drivers under FreeBSD, thus enabling us to continue to use your hardware to meet our needs. Yes, we were offered additional help in developing a FreeBSD driver for the unsupported hardware, for a serious premium.

If you were truly committed to Open Source, you would offer to develop drivers for other popular free Intel-based Unices without any type of monetary demands. This would, in the end, help you as well, as members of other communities outside the Linux community would turn to you for their hardware needs, thus driving your business further among competitors.

Don't get me wrong, I love Linux, and in fact use it at work and at home for my desktops. However, it should be noted that for large-scale operations, Linux does not always meet the requirements, and I would think you'd like to corner the market on these large-scale operations as much as possible.

Sincerely,
Adam Firester

Re:desktop market

[Mija Cat]

Read the prior answer again. Nevermind, I'll tell you what it was.

PROFITS!

The markup on a desktop is very small.

The markup on Intel-based servers is much larger, and the parts remain in production longer.

VA Linux is (wisely) spending its' time certifying the expensive stuff, building up an in-house knowlege base (and staff) that later can be leveraged into high-end desktop.

It's all a question of planned growth, which should certainly satisfy any stockholders.

Meow

(I don't own any VA Linux stock..but I wish I did!)

AMD Dodge...

[Tower]

Well, the AMD question was really answered in the earlier answers, if you look at it. If they have to test everything, right down to the memory chips to make that everything is fully linux stable, then the testing of (still immature) Athlon motherboards is going to take a lot of time, manpower == $. Not to mention that there isn't a dual-proc solution out the for the Athlon yet - I want one, though 8^) The BIOSs for the majority of the Althlon boards could be better, and with the history of the BX chipsets compared with the ever-revisionizing (not a word) AMD chipsets, you have to look at it as a Good Buisness Decision for right now. In a while, things might become as stable, but the number of things to retest (every card, memory stick, etc) with a new board would be quite cost prohibitive...

Re:desktop market

[Signal 11]

You're not Wah! =)

Yeah, I know. I'm just saying the CEO said there was lots of market opportunity... but why is he focusing on such a small part of it? I think his shareholders ought to be asking this question!

Re:What?!?

[warpeightbot]

Something subtle was missed here. LNUX is overvalued by traditional measures, sure. What Larry said was (reading between the lines here) they're not overvalued with respect to the rest of the market. Perception is everything on The Street. If Dell sneezes, Compaq and Gateway get colds. If Bob Young screws the pooch, ESR loses a few mil on paper. It's not really what's going on under the hood, it's what you can get the men in pinstripes to believe. Bob Young has them believing in Open Source as a business model. Therefore anyone who can survive the IPO gauntlet is worth five big ones with a B, simply because that's what The Street THINKS they'll be worth somewhere ages and ages hence.

Mar-ket-ing. it's that simple. Convince the suits its real, and it is. Doesn't mean I begrudge any of the beneficiaries their money. It's just the reality of the situation.

--
In 1999, the CEO of SCO called Linux second-rate hackerware. In 2000, SCO announced they were supporting Linux. Wonder if that makes SCO a bunch of second-rate hackers?

Re:No Windows Policy?

[Phil Gregory]

A while back (well before the IPO), a couple of VA people did a presentation for the local LUG. According to them, they run Linux exclusively, from their techs to their marketing people to (of course) their servers. One specifically pointed out that they didn't have an ERP system until they found one that ran with Linux (they may have funded the development of it; I don't remember exactly). If only I had the money to buy from VA.


--Phil (Most of my computers are assembled from used parts--much cheaper that way.)

Re:What?!?

[jareds]

He didn't say that they're undervalued on an objective basis, he said that they're undervalued with respect to other overvalued companies.

What?!?

[um... Lucas]

He feels they're UNDERVALUED?!?

No. VA Linux, just as every Linux, .com, software, hardware and tech company are grossly overvalued. Really. There used to be a day when companies were valued based on their actual performance. Amazon suceeded in corrupting that definition so that it included their future performance.

Now, every company out there seems to believe that they should be valued based on what they think they can do rather than what they are doing now.

It seems that IBM is about the only tech company that's valued anywhere near the levels it's revenue would reflect if it were in any other industry. They actually trade a lower PE ratio than General Electric.

I mostly liked everything else he had to say, but due to the order of teh question, i was set off by him. Build a company. Get the sales. Get the PROFITS. Then you'll get your valuation. Any other order is just insane.

Re:What?!?

[Anonymous Coward]

"It seems that IBM is about the only tech company that's valued anywhere near the levels it's revenue would reflect if it were in any other industry.

That's like a utility company complaining that their stock would be valued higher if they were only in the media business or something.. silly.. "

Let's take a look at comparing IBM or a large Computer manufacturer versus VALinux.

VALinux has mindshare with their IPO. They have capital to expand, and they have 50-100 really good open source programmers.

The largest part of the trilion plus technology windfall coming down the pipe will be in services. Larry says that 95% of the servers for 2003 aren't purchased yet and he therefore has a lot of room to grow.

Since Linux is OpenSource(repeat 30 times for effect) the competitive advantage of using that operating system with your competitors is almost null. So you must succeed in hardware and services.

Let's start with hardware. Dell has an outrageous evaluation because they have a direct model and a negative growth cost rate. That is almost every other company except Microsoft must spend more money to make more money. Not Dell. They get your money for the computer and they get the parts just in time so they don't have to pay the parts suppliers for another couple weeks. That's why they can grow so fast. IBM has gotten out of the PC in stores game to adopt the direct model after losing 1 billion in 1998. Wal-mart sells 70% of their product before they have to pay for it. They plan to sell 100% of their product before they have to pay for it by 2003. In low margin/low product differentiation businesses the supply chain is everything.

Can a bunch of Open Source people do that? Maybe, but it certainly is a different skill than writing code.

Let's look at their services business. A quick look at their site reveals they have some very impressive talent. It is quite possible that this is the best group of people to tweak and fix your Linux related server. That is as far as those 100 people can be stretched. After that the talent gets dilluted and they too are better off turning to the community at large to solve their problems rather than doing it in house. After all the Linux community won the best support award a few years ago(not just the people working for VALinux).

Let's compare VALinux to a company like IBM and look at some of the advantages each has. VALinux has better Linux talent and is small and nimble with huge amounts of capitalization. IBM produces a lot of OEM parts that are used by companies like ACER, DELL, and IBM to name a few. So they can tweak the hardware and the software for Linux before they release their products. IBM is manufacturing the new transmetta chip which is relying on mobile Linux. This will give them an advantage. IBM is also porting all four of their server platforms to Linux. It won't take too many years before the thousands of IBMers who will be selling, marketing, manufacturing, and programming Linux will be a serious challenge to VALinux.

Likewise VALinux threatens some of IBM's most profitable hardware with their scalable servers and clustering technology.

I can't predict the stock market. I don't remember the oil crash in the 70's but I know people in my family who lost their retirement. I do remember the wild real estate evaluations in the late 80's that didn't crash until the first couple of year in the 90's.

If that were to happen and VALinux didn't have as efficient a process as IBM or Dell they would hurt very badly very quickly. With respect to services it is going to be interesting seeing the new employees join to get options worth negative hundreds of thousands while their colleagues vest and can afford to just do open source for fun.

It should be interesting.

Cheers,
Amazon

Re:What?!?

[um... Lucas]

I guess you don't understand stock options then, because they're far away from being guarenteed. CEO's should be paid in stock options. The more the merrier. In fact, I don't even thing many of them should even receive a cash salary or golden parachute.

Option get issued usually at the price of the companies stock on a given day. When they vest you can then buy them at that price. If the stocks went up, yay! you can buy them a discounted price. If it's went down... Well, you're screwed then.

Yes, CEO's should be paid in stock options exclusively. Maybe not in all industries but the tech industry, yes. Maybe then they'ed care about what they were doing. Witness Gil Amelio with his high salary and golden parachute - how motivated was he when he was at apple.

It's worth noting that NBA rookies are surer bets than most of the high flying companies. There's often clauses in their contracts that say "if you don't play so and so many games, well, you're out this much." They can also be traded away, but who'll want them if they don't perform?

Here's a poll idea for Rob:

How many slashdotters:
A - got rich with stock options
B - got taken advantage because of stock options
C - never even got stock options
D - prefer cash over stock options
E - prefer stock options over cash
D - Rob sucks, Petrified Natelie Portman Beowolf cluster rule.

Re:What?!?

[cyanoacrylate]

No, stocks have always been valued at what their expected performance will be. In the case of VA, RedHat, Amazon, etc. expectations are that these companies will become huge profitable ventures within a very short period of time.

Weather you agree or not should determine weather you want to buy in, or short sell the stock.

Crispin

Re:What?!?

[SEE]

Actually, companies have always been valued partly on their current earnings, partly on their assets, and partly on their expected future earnings. For example, a company that is expected to earn 10 million next year will be valued at less than one expected to earn 100 million, assets and current earnings being equal.

No, what Amazon did was convince people that a long term buisness plan and a brand name were worth billions of dollars despite massive losses in a rapidly changing sector of the economy.

My prediction: Amazon dies in five years having never turned a profit and having been killed off by smaller, faster, smarter rivals with less debt. The brand name is sold to another retailer by the bankruptcy court, and eventually fades away.

Steven E. Ehrbar

Re:What?!?

[Rombuu]

There used to be a day when companies were valued based on their actual performance. Amazon suceeded in corrupting that definition so that it included their future performance

Oh really? When I was studying finance I learned that the value of a stock should be equal to the sum of a series of expected dividends plus the expected price of the stock when you sell it, all of which should be adjusted for the time value of money. In other words, stock values always have and always will reflect the future projected performance of a company. Amazon didn't invent this.


It seems that IBM is about the only tech company that's valued anywhere near the levels it's revenue would reflect if it were in any other industry.

That's like a utility company complaining that their stock would be valued higher if they were only in the media business or something.. silly..

I mostly liked everything else he had to say, but due to the order of teh question, i was set off by him. Build a company. Get the sales. Get the PROFITS. Then you'll get your valuation. Any other order is just insane.

Hey, if you so damn much smarter than the market, you should short the stock. You should make a killing when the stock goes in the tank, right? Or are you just shooting your mouth off?

Bitter much, Rob?!

[Anonymous Coward]

That intro seems awfully harsh. Larry doesn't answer to /. any more than Roblimo answers to VA. Larry would probably like to spend his few free moments a day with his wife and kids; cut the man some slack. And get over yourself.

Re:Bitter much, Rob?!

[eAndroid]

Larry didn't have to agree to the interview. But Larry did. I think Larry is as much to blame as Rob portrayed.

Advertising Linux

[Flat Feet Pete]

I'm fairly sure I've seen an advert for SuSE on the side of a black cab near Holborn (Central London). Is this kinda thing common elsewhere?

Maybe part of the problem is that net based advertising targets the desired audience more precisely.

market-talk

[mjankows]

I guess when you convince the wall-street clowns that your company is worth its weight in gold, you get to talk like some sort of highflying marketing fool. Larry doesn't need to sell VA to the slashdot audience, he needs to let us know they're not gonna be screwing us over. IMO, that post did the contrary, and they've already "sold out"....

You are right about one thing :)

[Rabbins]

If they can lose money at books and CD's, they can probably do a great job at losing money in other areas.

Mostly Fools

[MattMann]

The point is that you stay out of such a speculative market.

No, the point is to invest in the market portfolio. Don't blame me if you don't like the following advice, but you should know that a number of Nobel prizes have been awarded for it. You should spread your risky portolio around and invest in absolutely everything, with each fractional investment weighted by the weight of that security's market cap. That is, if the market valuation of IBM is .5% of all companies in the world, you should have .5% of your money in IBM (including bonds). I said "risk portfolio" because you may choose to have a portion long or short in debt to adjust the overall level of risk.

Now, since such a strategy is difficult to implement, you should be heartened to know that a portfolio of 40 or so diversified equities can be constructed that will perform the same as the market to a few digits of accuracy. This is what index funds are for. BTW, don't forget to include significant (at least 33%) foreign investment or currency risk will predominate.

Now, I realize I haven't explained the whole thing sufficiently to convince anyone, but perhaps some of it will sound like advice you've heard before, and knowing that top economists in the world actually agree on the answer will get a few people to stop listening to this month's flavor from the Mostly Fools who predominate in the personal finance biz.

Re:Mostly Fools

[Rabbins]

You would probably do well investing this way. I think you can do better.

There is such a thing as over-diversification. You do not need to own everything under the sun to get the best results.

A few examples:

Why on Earth would you want to invest in gold or other precious metals? Graph out a performance of gold over the past two years and it has been a nice steady decline (not even taking into effect inflation, which would kill it).

Why would you want to own utitilities (mainly speaking of the power companie), the industry is so over-regulated (even including recent rulings) that real growth (including inflation)is next to nil. While their dividends may be nice and high, they can barely afford to pay them... check net profit vs. payout. Interest rates also have the ability to fuck over the utilities (because they are so highly leveraged).

I like to stay away from luxury items and other cyclicle industries. The other day I was at the
Apple Bagel, I ordered a bagel and coffee, got my bill and it was $7!!!! What the hell, when we go through a little tougher times, how many people are going to pay that much for a bagel and coffee!?

I also trully believe that long term bonds, notes and CDs have no place in a retirement portfolio. It is a fact, that over the long term, and we are talking 10 plus years, bonds are more risky than stocks (as measured by the S&P 500). And the reason is inflation. If you get locked into a 30 year bond at around 6.6% (todays rate), and we go through another decade like the 80's, where inflation reached as high as 20%... you are royally screwed.

With quality, individual stocks, you do not have that problem. They are able to set their prices to keep up with inflation.... so they are AT LEAST going to do as well as the standard rate of living, even with absolutely no growth.

Coca Cola did not raise their price from 25 cents to 75 cents over the past decade to increase their profits... they were merely keeping up with inflation.

I personally choose not to invest in foreign equities, and instead focus on US companies with a foreign presence. Rules and of accounting and disclosure are so much more strict in the United than any other place in the world, meaning I can trust the numbers better. The world market is a guessing game... which eceonmy will be number one next year? Well, the US is consistently in the top 10, and I believe serves as a model for other economies to follow. It has less severe down turns and recovers much faster.

Nobel Prize winners do not apply to the real world, and never will. I would listen to Warren Buffet (who has never once owned any of the "flavor of the month" companies), Fayez Sarofim, Jeremy Siegel and Peter Lynch before I would take the advice of a Nobel Prize winner.

NOT diversifying across the board and using sound fundamentals is how you flourish... through good times and bad.

MODERATORS: Don't fall for this guy!

[Stiletto]

Check the so-called-CNN link before you moderate up. He is a TROLL.
________________________________

Re:MODERATORS: Don't fall for this guy!

[Anonymous Coward]

The amusing thing is that in meta-moderation this will look like a perfectly okay post... unless you click on the link of course.

Ah those cweative wascawy twolls...

Some new market for VA Linux?

[Anonymous Coward]

The receipe VA Linux + Xybernaut + Crusoe
would IMHO give birth to one of the hottest
markets for computing, the world has ever seen.

VA Linux would have the money, Xybernaut would
have the know how (and some nice patents) and
Transmeta would have the right piece of silicone.

Imagine a Linux powered wearable computer with
wireless connectivity to the Web. Any thoughts?

major sites on the Internet like eToys,

[Anonymous Coward]

"We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia. "

oops. :)

Correction

[Rabbins]

Graph out a performance of gold over the past two years...

That should be two HUNDRED years.
Sorry :)

I hate vagueness

[emmons]

SELL OUT!

The number one thing that I hate about companies that IPO is that they immediately become "corporate". Now, don't just go "duh" and ignore me... think about it. What's the difference between corporate management of a public company and Privately Held Company X? Honesty.

It's not that the managers are not honest people, I have no reason to believe they aren't, it's just that the stock market requires that they don't talk about certain things, skew other things in the company's favor or be intentionally vague. A perfect example is the AMD question. If VA were still private, there is no reason (ignoring intel, of course) that he couldn't have said, "Well, we're thinking about doing something with AMD..." However, now he's forced to be an asshole and ignore the question until a formal statement is made. Another example is all the marketing crap he put into his response. He can no longer talk about faults of the company which he is looking to fix, rather he must try and sell the company and pretend to ignore anything that's not as good as the competition.

I don't see why it has to be this way. If VA were really true to open source rather than the almighty dollar they wouldn't limit themselves they way being a public company does. There is no reason that a private company can't do the same thing that a public company does. (UPS) They just have to really kick ass is all. Is that so much to ask?

-----

old news

[MattMann]

With quality, individual stocks,

I was actually using "flavor of the decade" to refer to investment strategies, not particular companies. But, using it the way you interpreted it, the flaw is you have simply substituted the flavor company of the decade for the flavor company of the month. If you only look at "quality" companies based on past performance, you will never get to invest in new companies with new ideas that will take over markets from old dinosaurs. You will always dismiss the new "flavor" as "risky", so your money will be in IBM till after it's clear that Microsoft will cut them down to size, and then you'll sit in Microsoft till RedHat has cut them down, Intel till AMD, Howard Johnson's v. McDonalds, etc. etc.

You will earn money, but by not taking risks you will miss all new trends. If some newcomer got you to pay $7 for a bagel and coffee, it sounds to me like they know what they are doing, or maybe the rent on that streetcorner is high. What, you want to invest in people who get you to pay 26 cents for a 25 cent cup of coffee? I say, shop there a lot, but only invest a little. If Coke can change their price from 25 cents to 75 with changing times, why can't Apple Bagel change their prices as demand changes... or maybe, like Starbucks or Ben and Jerries, they'll make the new prices stick?

The people who run Apple Bagel have all of their money in it and they are paying very close attention to that market. I'm not endorsing their particular strategy. Rather, collectively all of the bagel companies have created and captured the value of the entire bagel market which you are dismissing as a bad investment. I'm saying it is worthy of its share of the market, and McDonalds its share. The problem with your advice is that it offers no particular formula but is based on your opinion, which you form over a long time instead of a short one.

I personally choose not to invest in foreign equities

If your investments are dollar denominated and you earn a healthy 15% return, but the dollar drops 10% against other currencies, guess what? You didn't earn 15%, you earned 5. In your retirement, you'll be the same as your neighbors, but not as well off as you could be. Yes, there are risks in the world economy, but the point is that "hiding" your head in the US sand does not protect you from currency risk. What about the giant size of the collective European economy, achieved from essentially zero at the end of WWII? You don't want to participate in that growth? What about Japan, phenomenal for decades, slow for the last one. What about China? You are going to ignore the growth of a huge economy. You won't realize what you missed since the US economy will also grow, but the rates of return in China will be higher.

Investment returns come from the productivity and ingenuity of people, everywhere they are allowed to create value. And what would your recommendation to Europeans be? To the Chinese? Put all their money in the US like you, or none of it? You are propounding a random collection of thoughts which happen to work OK because you live in a healthy economy, but they are not principles that can be followed all the time, anywhere in the world to maximize return and minimize risk.

Nobel Prize winners do not apply to the real world, and never will.

That's funny... Wall Street hires them, pays them, and listens to them, and hires their students. Wall Street pumps money into economies everywhere. When Wall Street asks for your opinion, it's so that they can design and market an investment flavor to you. Once again, this is not my opinion, this is what is learned and taught by and to the people who run the economy that you love to invest in.

Re:old news

[Rabbins]

That's funny... Wall Street hires them, pays them, and listens to them, and hires their students. Wall Street pumps money into economies everywhere. When Wall Street asks for your opinion, it's so that they can design and market an investment flavor to you. Once again, this is not my opinion, this is what is learned and taught by and to the people who run the economy that you love to invest in.

just real quickly... I am super busy right now, but have you ever heard of Long Term Capital???

Two Nobel prize winners were in charge of that dismal failure.... remember the banks of the world getting together to bail that disaster out?

You can not "figure out" an effective model to the market. Economists think they can, and they are ALWAYS wrong.

Also, this healthy economy has created "experts" out of a lot of people. I do not claim to be one. But I have studied as much as I can about the 30's and the 70's. I am confident that what I do is the best method considering the entire history of the market.... during good times and bad.

Simply Put:

Buying quality companies (at a well-valued price of course) that have proved they can change with the times and weather the storms. Buy on the dips, and NEVER sell. Patience is the key to the most succesful investors.

I will write more later, but if you are interested in debating a bit more... go ahead and e-mail me.

Re:old news

[Rabbins]

I was actually using "flavor of the decade" to refer to investment strategies, not particular companies. But, using it the way you interpreted it, the flaw is you have simply substituted the flavor company of the decade for the flavor company of the month. If you only look at "quality" companies based on past performance, you will never get to invest in new companies with new ideas that will take over markets from old dinosaurs. You will always dismiss the new "flavor" as "risky", so your money will be in IBM till after it's clear that Microsoft will cut them down to size, and then you'll sit in Microsoft till RedHat has cut them down, Intel till AMD, Howard Johnson's v. McDonalds, etc. etc.

Not sure how you went from talking about portfolio management and buying bonds and everything else under the sun to buying the new, but I will follow:

I do invest in newer companies... but I do not jump into a speculative market. My computer industry post from previous proves that is a losing game. You spread yourself too thin by buying everything, and no one can pick and choose the few companies that will finally be able to dominate the industry. Buying Compaq after they had proven to be succesful, would have yielded much better results. Even with their recent correction.

I will invest in the company that finally proves that it can dominate. The one that has created some monopoly power for itself.

IBM has continued to grow at an excellent rate, despite Microsoft. On the other hand, you did not need to buy Microsoft in the early 80's to ride their success. Ten years ago, Microsoft was a great, proven company. 5 years ago, it was a great, proven company. If you bought that "late" you still would have done incredible. Redhat is a neat, unproven, over-hyped, over-inflated company. It may pan out, a lot of people will make a lot of money... but I am willing to bet they do not completely faze out Microsoft and that Microsoft will continue to perform, just as IBM has continued to perform.

Funny that you mention McDonalds. In the late 80's, everyone in the investment community was hyped up about Russia and the Eastern Block countries turning over communism. Mutual funds that invested in the new companies that were springing up were selling like hot cakes... everyone wanted them because it was such an excellent opportunity for growth. Well, now we know that was a foolish thing to do. Those companies did not grow at a phenomenol rate for the main reason that they were communists. They had no idea how to make money! Instead what you should have been doing at that time was investing in McDonald's. Let McDonalds go over there and run their business. They have proven that they know how to do it! And that would have yielded you incredible results.

Companies like AMD and Amazon have continually proven to me that they know how to lose money. When they prove that they can do it on a regular basis, I will consider investing a larger percentage in them.

Every year, there are certain economies that will outperform the US. But again, that is a guessing game. If you spread yourself too thin, yes, you will get the handful of winners, but you will also get the countless losers. It is no mystery that the US is the business and financial capital of the world. The US economy has weathered and bounced back from tremendously horrible events better than any other country in the past two hundred years. Like the companies I choose, the US has proven it knows how to succeed.

Other markets have done phenomenal. But I do not know those markets as well. Some of the things about them make me nervous. Japan was riding high on doctored financials and profits... they payed a heavy price for it. I am glad I was not a part of it. The US is extremely stringent about its companies, more so than any other government.

But this really is fine with a portion of your money. Ideally, with 80 - 90% of your portfolio
in these quality, individual, proven companies (and you only really need about 10 of them). With the rest, go ahead and have some fun... I am certainly guilty of it. But 99% of the time, the tried and true method will outperform your "guessings" the market.

And yes, these principle have worked around the world, for the past two hundred years. Better than any thereom our model any economist has ever brought out.

Give me Graham and Fisher any time over that crap.

Limitations

[sallgeud]

I can't imagine why a company would want to limit itself to Linux. This is not to say that Linux is a bad OS...

Limiting yourself to one OS seems almost hyppocritical. Throughout history OSes have fallen, others have rise, and still some linger in the background. By limiting yourselves to only one OS, you're doing the exact same thing you hated the big boys for doing... (only carrying microsoft). I love the idea of providing a higher level of support, and think that it will be the one clear advantage that VA Linux will have... but this advantage is no good without some sort of flexibility. For all we know, what is OS X today could become the next major OS, running on all types of machines, while OpenBSD may be preferred by customers looking for the highest level of security and cryptography.

Naming a company VA Linux is like Dell calling themselves Dell Windows... it's silly and limits your scope of sales.

oh fuckin' well, just my $.04

Re:Limitations

[softweyr]

I agree. In point of fact, VA Research used to sell (and preinstall, I believe) FreeBSD on their systems, but stopped about the time they became VA Linux Systems. This differs from Compaq or Dell offering nothing but MS trash on their systems not one iota, and claims of "VA Linux" being an Open Systems company are marketing lies. They walked away from their Open Source stance to become VA Linux.

No Windows Policy?

[Anonymous Coward]

I read that there is a 'no windows' policy there. I wonder if that's true... that would be cool, but it might be difficult for sales/marketing folks.

Re:Stock price should also be discounted for risk.

[Rombuu]

Yeah, I forgot to put the risk premium in there... what can I say, its been a few years...

I will also grant that the formula is kind of useless for companies that don't issue dividends and have no plans to do so. As for this:

The question is -- are these high-flyers sufficiently discounted to make the risk worthwhile?

Well, thats the big question, isn't it?

Etrade sucks rocks

[Anonymous Coward]

Yeah, I actually got in on the VA one, whereas I was denied by Etrade's perl script, so I didn't get in on that. Etrade sucks - any recommendations for an on line broker?

Re:Etrade sucks rocks

[Anonymous Coward]

The other actually suck worse than etrade.

Why Intel?

[Anonymous Coward]

This is not saying AMD sucks or their chipsets suck but its that you have to do x2 work for another CPU.

Well, then given the current price/performance levels, it sounds like they should just drop Intel altogether so they can concentrate on support Athlon systems alone.

Just kidding. That's not really an option until the SMP Athlon motherboards come out. Then Intel will be truly fucked, since small companies who can only afford to work with one chipset, will have to make a decision that is weighted against Intel.

Advertising - what I should have asked

[Micah]

It seems like most of their advertising is "preaching to the choir" - banner ads on Linux related sites, Linux Journal, etc.

What I'd like to see VA (and Penguin, etc.) do is start taking out big 8-page glossy ads in Computer Shopper. THAT would get people's attention. :-)

Maybe spend 2 or 3 pages extoling the virtues of Linux in general, then the rest of the ad talking about their systems and all the quality and support they build into them.

Do they have plans to do that?

ummm... nitpick

[Anonymous Coward]

Let's see LNUX is 131 a share today.... Would you buy it at $90/share in 6 months? But you need to pay today. That's how shorts work.

Shorts don't work this way. When you short a stock, it means you borrow it from your broker and sell it at current market value. Later on you buy real shares from someone at market value and give them back to your broker. If the price goes down, you make money; if the company goes out of business, you make a killing. If the price goes up, you are screwed because by selling short you can actually lose more money on the market than you put in. Sell 100 share of redhat at 130 today; if the price goes down you buy at 100 and make 3000 dollars. If the price goes up to 150 however you have to pay back not only the 13000 you put in, but the 2000 delta.

What you are probably thinking about is options: you pay a certain amount of money in exchange for the right to buy shares of a stock at a pre-arranged price on a future date. For instance, offering 100 shares of redhat at $120 on 7 Feb. The best case is that redhat goes up to $600 in the next week; you still get it at the option price of 120. If it goes down, you don't have to buy it- but you forfeit the cash you laid down for the option. So it is safer to buy options than to sell short, but the rewards are somewhat less.

hope this helps...

UK Govt: Capital Gains Tax

[Matts]

It's a killer: 40% on all profits (over a small limit - something like £5000) gained from shares or stock trading, or even if someone gives you the money out of the goodness of their heart. Not nice.

Put your e-mail address everywhere in your code!

[Raphael]

After reading the paragraphs in which Chris DiBona explains how the developers were selected for the IPO, I conclude that the list of people was based on the number of times each e-mail address appeared in the 11 GB of source code he had selected. Or more probably, on the number of files in which the addresses appeared (it would be too easy to cheat by inserting your e-mail address a thousand times in the same file).

I understand that it is not easy to find an objective way to select the developers who contributed the most to the Open Source community. It is especially difficult to have a process that could be automated as much as possible. And it is extremely difficult to be fair.

But still... Now I realize that modesty does not pay when you write your code. Instead of inserting your e-mail address only once at the top of the AUTHORS file (and in the ChangeLog) but not in any source file, it seems to be better to include your e-mail address in every source file that you touch. Sigh!

And of course, don't use spam-traps if you want to get the opportunity to participate in some IPO. Sigh!

Hmmm... As far as I am concerned, I think that I will stick to the old habit of being credited only once or twice, not in every source file.

Worth the wait.

[Shoeboy]

This was beautiful, and totally worth waiting for. If Larry had rushed things, we might have gotten short, coherent answers. Fortunately the man is a perfectionist, and we got a total dodge of the AMD question, a lot of vaugeness and 135 repetitions of the phrase 'open source'.
Great.
--Shoeboy

no AMD or Alpha support anymore...

[garcia]

We dropped Alpha well before the Intel investment because we didn't have the resources to support Alpha and Intel on Linux. However, we're always exploring all of our options.

hmm, no response about AMD though. Hmmm ;)

Re:no AMD or Alpha support anymore...

[garcia]

my bad, the prior post about AMD didn't show up when I wrote this hehe.

Opinions differ

[Uruk]

Opinions differ as to whether or not the stocks are actually overvalued or not...I've heard a lot of people including many slashdot posters claim that there's going to be a bloodbath probably this year on the stock market and such.

As it happens, I have a lot of relatives in the securities industry in one form or another. (People who work in pension plans, stock brokers, and so on) They seem to think that the market may be in for some type of "correction" but nothing like a major bloodbath or crash for a long time.

Specifically, I was told that "When your shoeshiner gives you stock tips, it's time to get out of the market" I.e. when everybody and his brother is borrowing money to play the stock market because they've never seen anything BUT a bullish market, you know that it's time to get out, because stocks are being used as a money-making tool completely independant from the company that you're investing in. And that's where the real shit hits the fan. Fortunately, in the opinion of many I have talked to, that hasn't happened yet.

Oh, one other note - maybe that whole stock overvalued thing is a moot point now - check the current price on VA stock (symbol LNUX) - they've been in a tailspin for a while. Mind you, they were so high that you can be in a tailspin for quite a while and still have a decent stock price, but they've lost a lot of ground nontheless.

But there are yet more clues!

[Anonymous Coward]

Don't forget, the domain suffix for the Vatican is *.va*!

You say there is no connection between *VA* Linux and the Vatican?

I THINK NOT!!!

THE CONNECTION RUNS DEEP MY FRIEND!!!

Bad grammar alert, sorry Starmedia...

[chrisd]

Hey all, when larry said:

We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia

It was badly formed. Starmedia doesn't buy consulting services from us, but they are a big customer of ours. I can think of a bunch of different ways to say it appropriately, but it was a simple mistake, sorry.

Chris DiBona
--
Grant Chair, Linux Int.
Pres, SVLUG

You're a different guppy, but...

[FallLine]

In my opinion, what differentiates Amazon from the competition is not so much their intellectual property (well, except for the Amazon trademark, possibly), than it is their marketing position (e.g., brand "loyalty") and having this huge equity base from which to draw (as long as the DotCom's don't phase change to dogs--like the BioTechs of yesteryear). Both of which I have my doubts about, even though it's hard to see how future competitors could one up them--they can certainly put a great deal of price pressure on them--I don't see a decisive victor on either side on the horizon.

PS: You're a differnet guppy, but I too currently live in PA, just outside of Philly, essentially the same age, and likely similar studies/profession. Cheers =)

Well...

[FallLine]

I'm not a big fan of quibbling, particularly when it comes to academic terminology. However, the definition of asset depends largely on your audience, and widely considered, in financial circles atleast, to be anything with commercial or exchange value. Furthermore, when I modify "asset" with "liquid", that implies, that, it can be re-sold near that stated value in a relatively short period of time. Thus while cash is most definetly a liquid asset under just about anyone's definition, liquid (depending on just how liquid it is) assets can include (or exclude) a great deal more than just cash (e.g., t-bills, bank deposits, money market shares, etc.). Generally speaking, in a corporate financial statement, liquid assets primarily include just: cash, marketable securities, and accounts recievable. When I refer to liquid assets though, I'm not adhering to GAAP, as it can be misleading.

Dividend policy is highly controversial, as you well know. We could get into the theory for several pages worth each, but i'd rather not. Empirically speaking, however, one look at firms listing on NASDAQ gives you a good idea of what you can 'reasonably' expect. Amazon is, of course, in the red, and as such they can not reasonably issue dividends anyways.

Just for the record, i'm of the opinion that most companies don't pay out enough dividends, but many of these high growth firms, particularly technology firms, really do not have the luxary of issuing them. One thing you must remember is that their cost (not to mention timing) of acquiring capital is higher. Their product/sales are not nearly as stable, nor do they tend to be as diverse, and as such can't necessarily be considered sufficiently sustainable. Many need to reinvest in new projects (e.g., R&D) before the previous one starts paying off significantly. When it comes to liquidity, many are also faced with the possibility of immediate mergers and acquisitions (in addition to growth prospects), making dividends less necessary. In short, they're in a fundamentally different position.

I do agree with you about tax policy for the most part though. =)

PS: Nit pick: In regards to your stock buyback statement(s), it is not unheard of for companies to buy out smaller investors to cut down on paper costs...there are other perfectly legitimate reasons for buybacks as well, but I digress. Cheers =)

Re:How much Raster Worth?

[Hall]

They're only "paper" rich at this point. Since they're employees, I don't believe they are allowed to sell their shares until later on (I remember 6 months being mentioned in regard to RedHat; 2 years in regards to the infamous LinuxOne).

By then, the price may greatly "normalize".

Any of you stockholders have ulcers?

[Electric Eye]

Kinda sucks that the stock price has dropped more than 150 since opening. I guess it's still a nice chuck o' change, but you ain't as rich as you thought. = )

I disagree...

[chrisd]

What? This makes no sense, Linux -is- open source. Just because we don't ship BSD preinstalled doesn't mean that Linux stops being open source.

Chris DiBona
VA Linux Systems

--
Grant Chair, Linux Int.
Pres, SVLUG

He's like that in person: True Believer

[Anonymous Coward]

No kidding.

AMD and *Alpha* dodge

[RelliK]

He also said they dropped Alpha before Intel's investment. I am pretty sure this is incorrect. I believe I saw Alpha systems on their web site for a little while after Intel's investment. But don't take my word for it -- it was a long time ago and I don't claim to have perfect memory.

I would like to hear what he has to say about AMD though. And it's not just Athlon. Penguin Computing offers K6's in their low-end systems. Why not VA?



___

How Not to Drop Names

[Sebbo]

We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia.

If you're trying to endear yourself to Slashdot readers, perhaps you shouldn't emphasize your ties to eToys and DoubleClick this month. Eh, Larry?

How much Raster Worth?

[Anonymous Coward]

Considering that Raster has worked at both Redhat and Va Linux in the past year and both companies went public, I would think that he is worth some coin. Anyone have an idea?

valuation

[whileone]

i dunno. i think the old view of price/earnings really should be replaced with price/(earnings + research + marketing) it's *far* from perfect. but i think it's more representative of what a companie is really worth. research counts. witness at&t, ibm, xerox. like it or not, marketing counts. witness pepsi, microsoft, fox.

as i said, it's not perfect. but i do think it would let companies grow in a way that makes a bit more sense than pure p/e. we've neglected the long term benifits for quite some time - this may force the issue on wall street.

desktop market

[Signal 11]

I'm alittle suprised VA doesn't want to play in the desktop market. It's obvious many slashdotters here regularily scan VA's offerings but are consistently priced higher than other companies. Per unit sales may be more on the server market, but for sheer volume desktops blow them away. I'd say if you want a larger net value, go with the desktops.

As you said yourself, Chris, there's tremendous market opportunity here. Why limit yourself to servers? Perhaps an indication linux is still not ready for the desktop... only time will tell, however...

The extras are nice

[mosch]

I've spec'd quite a few VA boxes in random consulting jobs and have always had spectacular performance and reliability with them, but the one anecdotal reference regarding service that I'll give is this.

We hooked up the box to use as a little firewall, and it wouldn't work. When I mentioned 'never mind, it's probably something flaky with our router, thank you for your help' they asked what kind of router it was, and offered to get somebody with Cisco knowledge to help. And this was for free. This was the first machine I ever bought from them, and was the incident that sold me on them for life. (the issue turned out to be a bad cable. DOH! that part of the incident convinced me to buy a good cable test kit)