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Linuxcare Withdraws IPO, Cuts Staff
Eupolis writes "Reuters reports that Linuxcare has withdrawn its IPO filings, and is now cutting staff to try to keep from running out of money. " As well as the report from Reuters, News.com has an analysis of the situation as well.
VA is currently at $60, that doesn't seem too bad. (I could be wrong, I'm not well versed in Wall Street)
Finkployd
It appears that Richard Stallman has won after all. Despite the attempts of a few brave pioneers to actually make money off of "free software" his anti-capitalist shackles have once again seen off the threat of people making a living from doing what it is that they love.
In fact, it appears to me as if the only person who has really benefitted financially from the whole free software movement and its pseudo-socialist ethics is RMS himself. After all, he obviously has the money to spend his whole time railing on about the evils of proprietaty software and the naming of Linux. So really, he wins all round - he is the only person to make money off of his so-called "philosophy" and he gets to look wise and benevolent to all the people he's brainwashed into accepting his vision of the future.
Personally, I think this smacks of hyprocrasy, but I'm sure many people will blindly disagree and flame me for holding this opinion. But then again, this is /., where knee-jerk flamage is accepted as the norm.
I'm glad to see some actual market forethought and planning by a (GNU) Linux-based company. I'd much rather see them drop the IPO than end up like VA. We really need some companies to build up actual strength and worth rather than inflating their stock prices to look powerful. Rock on Linuxcare!
Of all the Linux companies, I am disappointed the most with LinuxCare.
I had originally thought that they have the best business model and would make real money since they are in services and not in selling GPL'd software.
However, it seems that their current dilemma is caused more by lack of execution and bringing in people who did not get what Open Source / Free Software is all about (e.g. Doug Nassaur, ...etc.)
Internally, there has been infighting between pro- (i.e. the founders) and anti- (read: the VC appointed management) Open Source factions.
At least there are lessons to be learnt from all that. I wish the founders the best of luck in the future.
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First, what's the deal with Linuxcare not getting any money? They're the only (dedicated) Linux support company. Is it that people don't need support, aren't buying support they DO need (because they are getting it elsewhere) or that they are getting support "from their vendor" (RedHat, IBM, etc)?
Second, what ever become of LinuxOne? All I ever heard about for around 6 months was the evils of LinuxOne and their IPO. Did they have it? Did they fall off the face of the earth?
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If Linuxcare goes under, I hope that people won't point to it as proof that you can't make money in Linux. The money to be made just isn't the traditional kind of money.
I used to contract for American Express and some folks there argued with me about Linux, claiming that AMEX couldn't make make money off a free OS. HELLO! AMEX was in the credit card business, and if they based things off a low cost OS that would positively affect their bottom line.
Most companies will never sell an OS. I can count the ones that do on one hand if I have about 20 fingers on that hand. The way to make money off Linux is to create a business, any kind of business, and use Linux to run your business. Operating systems are old old technology now. There's no excuse for a Microsoft or a Sun making billions of dollars off old technology! Obviously those companies get most of their value from new features like journaling filesystems and such, but the inner core operating system is just a commodity now. Get the simple commodity stuff for free, and sell new technology for profit. Everyone benefits because technology advances.
Eventually Linux will have every feature that could possibly be added. It doesn't yet though. Linux is what our computers *should* have been running 15 years ago, so that disqualifies it from being new technology. The fact that I was stuck with DOS until 1993 drives me nuts, because it didn't have to be that way, except for companies overcharging for 1950's technology.
Sorry about the rant. I can predict what the "pundits" are going to say about Linux Care's predicament and it makes me a bit cranky.
If tits were wings it'd be flying around.
Linuxcare IPO stopped talking to other employees. He sat long hours at his desk. No one was quite sure what he did there, but the mounds of coffee cups laced with methamphetamines couldn't be a good sign. He stopped going out to the bar with the rest of the staff on fridays. IPO felt that he no longer needed the company of his co-workers. "I know what they'll say," he thought to himself, "they'll say 'I never expected it from him . . . he was such a quiet IPO. Kept to himself. Didn't bother anyone'. If only they knew what evil lurks inside the heart of an IPO . . ."
At home Linuxcare IPO would systematically windex every photo he had of his mother (RedHat IPO). He had long since cleaned all the furniture out of his apartment. he didn't need all that glitzy stuff. Besides, he needed the space for his journals. He had kept a journal for every day since he had learned to write. He had a journaling file system so he could pull out any bit of writing at a minutes notice to reference in it. He found his writing to be insightful and enlightening.
"no one else could understand"
"no one else could know what I know"
"I've seen things"
"I understand"
"They hate me for it"
"They're trying to distroy me for my knowledge"
Months went by like that, and soon Linuxcare IPO developed a taste for flesh. It started innocently, killing the rats in his apartment and smearing thier eviscerated flesh over his own naked body. But it wasn't enough, there wasn't enough blood to hide them. He had to keep his secret safe, and blood had powers, and no one could see him behind a mask of blood, and he could be happy, and he could finally achieve what his mother had long prophesised. Yes, it was good, and it was safe and right. Linuxcare IPO knew what he had to do.
The next day at work, people noticed a change in IPO. He had been so withdrawn for so long, but now he was talking to everyone, eyes darting nervously to and fro. Then, about ten minutes before lunch, IPO pulled out the knife he had made himself, and started plunging it into Linuxcare Staff. He would cut Staff alright . . . he would cut him REAL good . . .
The reason the poster called them a laughing stock is that ... and correct me if I'm wrong... VA Linux's stock rose very high ($300+/share), then dropped very low (to about what it is now) all in one day. It was the highest rise and fall in one day.
$60/share is fine, but dropping from $300+ makes swallowing 60 (especially if you bought in around the high point) very painful.
When Linux first started getting attention from the market, the prevailing wisdom was, "Well, if you can't make money selling the software, then the way to be profitable is to sell support."
Linuxcare, unfortunately, approached support in the least imaginative way; selling support to end-users (or vendors), just as the proprietary software vendors and support companies had been doing. But it turns out that Linux users don't really need that kind of support. This is a different market.
There ARE companies approaching the "support" issue in imaginative ways. Cygnus/Red Hat, Lineo, Transmeta, etc. sell "support" by providing custom development and specialized implementations. That's probably the approach that will work best.
Wtf?! Does everyone around here have the attention span of a gerbil? Ohmygod, (insert favorite Linux company name) is not making gazillions of $$$, so IT'S THE END OF THE WORLD!
To the folks at Linuxcare, I wish you the best, hope all goes well.
To /.ers, expect successes and failures for Linux companies. Name me a company that doesn't go through its problems. This industry is no different.
IBM used to be The Enemy. Today they are more friend than foe. In the early 80s, IBM had something like 400,000 people working for them. Their staffing at one point dropped to half of that. Point is, change will happen.
Final point to consider is that this is only the beginning of the commercial side of the Linux revolution. There will be more of the proverbial "bumps in the road". Yet, if you look where things are today, overall, things look pretty darned good. Imho.
first_post
Live it. Linux.
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Live it. Linux.
Whether or not DotComCompanyX has a good business model or not is another matter. But never doubt that people will pay for support and advice when it matters to them.
I have used linux (along with GNU and a lot of other free software) for quite a while now... long enough that I can't quite remmember when was the last time that I used a not free operating system. As i have sat here and watched the growth of the linux industry over the last few years (and let's face it, 1999 will long be remmembered as the year of the penguin) I can't help but have this strong feeling towards the industry.
First, a bit of background, I work in the IT industry (obviously) but I have migrated to a job that does not really give me much time to program, I am mainly a big hovering brain, spitting out ideas and thoughts, however all of the lessons that I have learned (and am learning) from the open source movement, are ideas that I incorporate into any endeavor in which I am a part of. At the companies that I have been involved, we have used free software extensively, and we have built great products upon the foundations laid down by Linux, RMS, and the bunch.
However, I was doing this (along with a LOT of other people) way before the Linux craze hit! It isn't just in the last year that apache has become the "leading web server" it isn't just in the last year that BIND has become the "backbone of DNS on the internet." These products, this code, this art, was great and around way before VC money, and artificially inflated IPO money was around to fund it!
I can not help but have this feeling of "SO WHAT" towards the rises and falls of the open source INDUSTRY... the movement will always be here, as long as I can type, I plan on using open source software over closed source, I plan on submitting bug reports to open source software, and I plan on releasing (no matter how pathetic lately) any utilites, applications, ideas, etc... that I have in a manner which can be utilized by other programmers, by other developers, by other artists...
If people make money off of open source, WONDERFUL! more power to them! I am very much for people making money... if however 3 years from now the market fizzles and we realize that quite frankly, open source software did not become the cash cow that microsoft enjoyed in the 80's and early 90's... well, so be it! I have learned my lessons, so have most of you! The ideas have been spread, the concepts have been tought, the seeds have been planted... I am using a FREE o/s with a free web browser to post this comment... we might lose the battles of economic success, but the war of freedom, in my mind, has been won.
I think the difficulty with regards to actually turning a profit when supporting Linux systems is because of a few different points:
1. Companies / People running Linux generally have a higher calaber of support people internally compared with another company running running an NT server for example.
This means that you have to have very very excellent people. To keep them you have to pay them a good salary. Which in turns means you have to charge more.. A viscious cycle unfortunatly. Is there any solution to this?
2. How hard is it to take your computer to a place and get them to "fix" your win9x box? Pretty easy and pretty cheap. Now if you do not like the service you get for whatever reason you go 1 block and try someone else. With Linux support who do you go to? Where do you find them? What happens when you finally find that support and you are unhappy with it? You eventually give up? Any solutions?
3. Linux is rather robust, rather stable. Which translates to less support. Unlike an NT4 box where it needs constant TLC to keep it running happily. Do we even want to contemplate a solution here? I don't
4. There are a lot of very very excellent tools / help avenues on the net for walk throughs configuration, problem solving etc etc etc. How long would it take you to find a rather decent walk through on how to setup a video card? Chances are not long. Take NT4 for an example where do you go for a walk through to setup the same card? Generally you call up a place and get them to do it because there is not one. Again causing less support calls etc. Once again do we want a solution here?
I think what it generally comes down to is you have to be a very professional outfit to succeed. No mickymousing around. You must even from time to time dress the techies up in a shirt and tie (have fun, and if you manage to get a photo journal of that put it online).
My 2 bytes.
One of my Linuxcare friends had a job interview this morning that I helped set up. If you're one of the LC people looking, I now have even more contacts. Feel free to email me at deirdre@deirdre.net and I'll pass along what I know.
While the prognosis for everyone there is good, the early birds will have more choices.
If you're one of the ex-Linuxcare staff, I'm also asking the companies to show up at the next BALUG meeting as well. And, if you're a company that I missed somehow, just show up. :)
_Deirdre