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Eazel: The Honeymoon's Over
OdinHuntr writes: "Newsforge has an article detailing Eazel's layoff of over 50% of its workforce. Quite a day, eh?" And GrokSoup writes: "According to News.com, Eazel laid off 40 employees today -- or more than half of its staff. The company says it is trying to get its "... burn rate and business plan in line with the more sober economic environment," but we all know what that means. Don't we?" Update: 03/14 03:20 AM by T : And on a slightly more positive note, Dan Gillmor writes: "Hey, I stopped by Eazel today and Andy H showed me a nifty (but as yet unreleased) RSS viewer that's an intelligent icon on the Nautilus desktop ... I posted a screen shot in today's weblog."
There is one real philosophical difference between RMS and me. RMS believes that all software should be free. I want to see Free Software and proprietary software compete on a fair playing field, and there are some areas where I insist on software being free, like the infrastructure that everybody uses. So, having a proprietary product is not anathema to me.
Thanks
Bruce
Bruce Perens.
This is something to take at face value. Most of us knew that there was going to be a shakeout. Those remaining will be the ones offering real value -- possibly through consolidation. In fact, the Linux companies that can offer end-to-end solutions will do well.
I can easily see Eazel and Ximian merging -- their business plans overlap in so many areas that it just makes sense. There's even some overlap with Red Hat (cf. their new services network).
This isn't the end for Linux. It's the end of the hype. We'll live through it.
--
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1. Make a product a lot of people want and put it out for free on the web.
2. Package the same product in an easily installable format with loads of docs and a support plan.
3. Give great support.
4. Put together a serious training program and peddle it hard.
5. Make your corporate support a subscribition or contract program to ensure future cash flow and to show future investors that you have a future.
6. Keep overhead low. Cheap digs simple easy-to-navigate site and few employees full-time.
a) A couple of programmers.
b) A small but solid support staff.
c) A couple of trainers.
d) A syadmin/network admin guy with a junior.
e) Office Manager and a receptionist.
f) A small sales staff.
g) A leader with lots of charisma and the willingness to close the sale.
7. Design your program for the corporate backoffice aspects staying away from the dead e-commerce buzzwords for now.
8. Sell to your firms and then re-sale when necessary but don't base your profits from milking off of existing customers, keep selling. A year wihout new clients is a dead, wasted year.
I worked for a great small firm that designed closed software for lawyers (some of the pickiest customers ever).
They had one leader, no sysadmin/network guy (the lead programmers filled dual task), Office Manager, Receptionist, Support Manager/Corporate Trainer, two support people/part-time Q&A, 3 programmers, and one Q&A guy full-time. They made money. They have remained solvent.
The big rule. Don't get a big head. Don't expand too quick but keep a keen eye on improvement and natural expansion. Know your customers, what they want and what they need. Give it to them.
It is tough. Look at your self as a small business owner before you start seeing yourself as the next big thing. I have never seen my niche. That point where I felt I had an idea to sell where I felt comfortable enough to start my own company. I have seen a small software company survive without insane IPOs and huge falls.
It can be done.
ACK
Since Konqueror is a multi-use viewer, it has multiple homepages (called Profiles). When launched as a http navigator, it's in the profile "Web Browsing". You can change the homepage by clicking on Window, and then "Save View Profile 'Web Browsing'".
When launched as a file browser, it's in "File Management" Profile, and you can change that hame page as well, the same way. I've added the linked term window to my standard File Management profile, so I always have a full command line available in whatever directory I am graphically browsing ("rm *.o" is far easier than clicking and hitting delete on each).
Since you can add as many Profiles as you want, you can open up your Bookmarks in a left hand side frame, link it to your right window, and broswe that way as well. I have that saved as "Opera Style". One nifty thing is that this also saves the size of the window, so I have a link on my toolbar for a small browser (for looking up things on php.net for instance) and another as a full screen browser (well, one of the two screens I run on).
--
Evan
"$30 for the One True Ring. $10 each additional ring!" -- JRR "Bob" Tolkien
Partnered with Sun, Redhat, and Dell.. I am surprised they kept a sales force this long. With these they are going to get their product to 80% of the market. They are now going to be waiting for the product to start shipping. After and only after it starts shipping will there be endusers to buy services.
Get a free ipod.
Too bad they can't trim 50% off of Nautilus' memory footprint. For being a file manager, it's pretty pathetic to be grabbing 138 megs of system memory just to sit there.
I guess you're one of those people who thinks that X uses 200MB+? Reading the output of top or ps isn't going to tell you how much memory the process is using - it merely tells you how much is mapped. The problem is that two or more threads may have mapped the same memory area several times, making it look like an 800lb gorilla rather than a marmot. For example, Mozilla has around 20-30 threads active all the time. Chances are pretty good that all you are seeing is the same memory used by multiple threads in Nautilus as well.
Cheers,
Toby Haynes
Anything I post is strictly my own thoughts and doesn't necessarily have anything to do with the opinions of IBM.
Yes Microsoft was a huge corporate juggernaut in it's first 5 years too. It was started with billions of dollars and all Bill had to do was sit there. If either O'Reilly or RedHat reach 25 years (and I can see O'Reilly doing it) then they won't exactly be short of money either.
I'm not going to get militant about it, aside from this post on /. I'm probably not going to do much more than just not use Nautilus specifically to avoid using the Eazel services.
It's downright unfair and dishonourable to develop a product and a brand identification, and then once the product is out, lay off more than 1/2 the staff that had been necessary for developing it. Don't forget it's not just the coding that goes into something like Eazel (and developers were dismissed) but also the product strategy and marketing that must've gone into developing the idea behind something like the Eazal Services that they plan to offer.
This way of thinking is exploitative of workers (coders are workers too) and perhaps I was naive thinking that an open source company would be above this. I guess this happens all the time, at open source companies too, and this is just the eye-openner for me.
But to make a 1.0 release of a much anticipated product (would it have been anticipated w/o the efforts of the marketing types released?) and that very day and then turn around and fire half your staff is not the behaviour of a company that I think deserves my patronage, free product or not.
This is why employee loyalty no longer exists, because of stories like this.
Jeremy McNaughton
------ Live simply so that others may simply live.
"Where do you want to cash your unemployment check today?"
Consultants and contractors are directly paid to do a good job. They have a reputation to protect in their line of work. They are professionals that are in it for the long run because it's their own career. Because they are in it for the long run, they have an interest in doing the right thing, cleaning things up, and maintaining things.
Startups are a kind of hit-and-run business: investors want to get high returns on investment by any means, and if that can be done over a six months by hyping and without delivering quality, that's just fine with them. Much of the technologies that startups are based on (and busily patenting) wasn't even financed by the investors but by research grants (unfair as it seems, it may still be a good deal for society, since a lot of that comes back in taxes if the company succeeds).
So, no, I don't see much of a future in open source software startup companies. After those companies have extracted the excess value that free software has, they have nowhere to go, and I don't think in a startup climate they create the right kinds of long-term foundations for themselves to prosper. But I see a bright future in open source software consulting, contracting, and teaching.
Don't cry for the people at Eazel or Ximian or whatever, though. They are bright, they knew what they were getting into. If their companies fail, they didn't lose, they just didn't win big. They'll get by just fine as consultants or back in the fold at a big company.
Too bad they can't trim 50% off of Nautilus' memory footprint. For being a file manager, it's pretty pathetic to be grabbing 138 megs of system memory just to sit there.
--
Proud member of the Weirdo-American community.
Now that money has gone GNU also did well out of the boom.
We got lots of code under the GPL !!!
This is as good or better than a wad of cash in the bank. The shrinking and loss of these opensource firms is not so bad as it is for other groups. Normally when a frim shrinks or goes under the code stagnaties or dies. The GNU licence on the code is an asset for the community to weather the downturn and for other developers to use when times are lean. Elivs PS- I'd still like the open source firms to prosper, but with the GPL its no where near as important for the future of opensource.
An awful lot of the economy is in fact based on the attitudes of the public at large. Are they confident in the future, or are they victimised by FUD?
An awfull lot of what has happened over the past 6 months in terms of layoffs is part of the internet bubble shakeout. BUT a lot of it is not.
Alot of it is based on Fear, Uncertainty, and Doubt. Certain national politicians have muttered phrases generating Fear, Uncertainty, and Doubt. They have down this to cover themselves in case they mess up, and to sell their own agendas.
But what this has led to is a self fulfilling prophecy. Because part of what leads to a downturn is fear, uncertainty, and doubt, especially when there are not other factors changing the market, such as a new technology, etc.
You can call it an irrational pessimism, which is what I have seen in some posts here. I swear, you would think that people would have learned to recognize FUD when they see it.
"It is a greater offense to steal men's labor, than their clothes"
Fortunately, unlike most software businesses: if Eazel doesn't make it, their software will go on.
There is a lot of money to be made in Linux and Free Software. But that does not change the fact that being a start-up now really sucks. Because of that, a lot of the money is going to be made by old-line companies with a lot of cash and the patience to weather bad economic times, like IBM and (if I can do anything about it) HP. And the little companies that do succeed are going to be the ones that keep their expenses way down until they are profitable, rather than ride the more extravagant venture capital road. That means keep your day job while developing your next product.
Thanks
Bruce
Bruce Perens.
20 or so years ago Jerry Pournelle, writing in Byte, said that in the future (i.e. now) the money wouldn't be in selling software, it would be in selling support (like Red Hat) and documentation (like O'Reilly). He was right.
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Support is not a 900 number to call for technical support. Support is not for end users. End users buy a pretty little box with Wizards when they want "support". Support refers to business support.
What does this entail?
I'm developing a UNIX application aimed for Enterprise clients. I know that one of the platforms that I want to support includes Redhat Linux. I could count on my programmers spare time knowledge of Linux, but then it costs me a fortune in lost time if there is a problem. As a result, I pay them $20,000 for their special documentation which includes known bugs, etc., and a live number to talk to one of their kernel hackers to find out the problem.
Next scenario, I decide to migrate my expensive, but aging, HP-UX system to a modern, inexpensive system. I see that VA Linux will sell me a server for about the same price as Dell. VA Linux, however, will send out a technician (who as access to their knowledge base) and migrate my system for $6,000 including server. Otherwise, I risk losing my system for a few days while they iron out bugs.
Final scenario, I have 15 servers up and running, with a sysadmin that manages them including server side support for my IT guys. My IT team is writing software to improve our core business. However, they need DB support, etc. My sysadmin, however, spends 4 hours/day reading Slashdot/following bug news, applying patches, etc. That means that half his day is spent not aiding my core business.
As a solution? I could get another Sysadmin ($80k/year), or I pay Redhat $1000/server/year and they provide me with their enterprise system. Each of my servers are setup in their system, and all updates/bug fixes are automatically applied. I pay them $15,000, and I save the $40,000 of half a sysadmin.
That's support.
As a hobbyist, I don't mind spending 15 hours playing with my system until it's right. As a consultant, if I spend 15 hours on a problem, my company lost the ability to make $1500, and if a $500 or $1000 solution solves it? Well, we'll open the checkbook.
Alex
I have always puzzled over the business plans of companies like VA Linux, RedHat, Eazel, Ximian and the like that plan to make money of selling comodity software. Specifically I'd like to know how they justified their plans for IPOing or spending millions in VC money from peddling GPL software.
I'm not an MBA but it is painfully obvious to me that GPLed software is unfavorable towards reaping rich financial rewards. Take software for instance. Lets say RedHat spends $1 million on paying kernel hackers and writing GPLed software and plans to make up for this in support. The fact of the matter is since RedHat's software is free of licensing costs and is GPLed, anyone can create a value added service from their software and spend less than they do but provide better support and/or extensions to their software by working off what RedHat has already done without having to invest the same amount of money.
The same is true of hardware. VA Linux thought it could become big time selling Linux servers but failed to realize that anyone can put together a Linux box and sell it. Once Dell, IBM, Compaq, etc decided to invest their considerable experience, market knowledge and distribution chains into the Linux server market it simply became who could afford to spend the most to make the most (just like Walmart vs. your local grocery store).
What I'd like to know is exactly how people were convinced that these companies could make money? If you work or have worked for one of these companies, please can you explain to me how they planned to make a profit?
PS: I am pro-Open Source and have worked on Free Software and plan to give away a considerable amount of software (20,000 code application in a few months) but I can't see the sense in believing that Open Source translates into corporate profits unless you plan to use Open Source products as a hook to selling your actual product (e.g. IBM).
Just in case people take this wrong, it really was a hard situation. It wasn't really like "good job, you've finished 1.0 and now you are expendable". Things are really cranky in the market. In my case it was probably because I'm part-time and it was more important to hang onto full-time engineers. It hurts of course, but situations can be really hard.
:-/
Also, in a way Eazel showed that Nautilus development is its core. Most of the cuts happened in areas other than Nautilus development. A few of the people at the VP have turned their salaries off, etc. Things are really tight, but for the sake of GNOME and Linux on the desktop I honestly still hope Eazel will pull through (and of course, I will continue to work on Nautilus).
Here's to better days
-Seth
"... burn rate and business plan in line with the more sober economic environment," but we all know what that means. Don't we?"
yep, gotta start drug testing.....and that's why they had to lay off half the workforce