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."

Comments

50% of what?

[Angst Badger]

"Newsforge has an article detailing Eazel's layoff of over 50% of its workforce.

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.

--

economic reality and GNU

[Elivs]

With the stupid levels of development capital that was around the last few years many compaines (eg MS) got alot of money in the bank. Others grew, then lost it all.

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.

Irrational Pessimism

[Alien54]

A few years ago the chairman of the federal reserve muttered comments about "irrational exuburence".

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.

About that Somber Economic Environment

[Bruce Perens]

A lot of us went into business with very high expectations, and yes, that was because of how high Netscape went on its IPO, etc. Those expectations are very different now.

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

Re:Question For Employees Of Open Source Companies

[wiredog]

I don't know about VA, but Red Hat is actually doing OK. They're on track to make a profit this year. By paying people to develop software, they have the knowledge in house to provide superior support. Their people don't need to grovel over the code because they wrote it. Now, most of the people who post here probably don't need tech support, we do it ourselves. But for the average user, or business, Red Hat is probably the solution for support. That's in the USA. I imagine that it's Mandrake or SuSe in Europe, TurboLinux in Asia.

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.

Does anyone here actually understand support?

[alexhmit01]

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

Question For Employees Of Open Source Companies

[Carnage4Life]

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).

From somebody just laid off in the Eazel crunch...

[nullity]

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

what it really means

[unformed]

"... 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