Has TurboLinux Collapsed?

An anonymous reader writes: "UnitedLinux already is short one founding member. Linuxgram reports that TurboLinux has collapsed." The sources mentioned are all anonymous so far; the TurboLinux website is functioning, and offers no indications that the company isn't also.

Comments

Re:Talk about being responsible

[bje2]

i don't see this as irresponsible journalism on slashdot's part...slashdot just provides its users with whatever news the editors feel is relevant to reprint...if you want to blame anyone for being irresponsible, then blame the folks over at Linux Gram, who actually reported the story...and from what i read in the story, they seem to have multiple (albeit anonymous) sources...so, i'm fine with slashdot posting this...

Re:This is for real

[Marsala]

HAH.

Kashif, I'm sincerely sorry to hear about your brother, but he's not the first person at TL who's gotten the shaft for what is basically leadership ineptitude. Hopefully, he'll be one of the last, though.

What strikes me as ironic, though, is that I had a conversation about this back in November of 1999 (and I left the company the next day for this and some other reasons) with the (then) CEO where I warned him about this. My immediate supe warned both him and the board this was going to happen and had his foresight rewarded by being marginalized in the company's decision making structure until he finally got sick of it and left a few months after I did. If I see an article anywhere claiming that the company was blind sided by this or that they blame it all on "market conditions", I won't know whether to laugh or cry.

In the popular street vernacular (at least for 1992 :-), let's kick the ballistics. And keep in mind that the costs of development and number of units shipped are just theoretical here and used only to illustrate a point. I didn't have any access to any hard numbers since TL was most definitely not an "openbook" shop and absolutely loved to keep secrets.

Any rate.

You are a small start up company, and you have three (arguably two) products. The first one is a Linux distribution you sell as a the "desktop" version for $50 a shot. To date, in the US, you can claim about 100,000 sales of this particular product. If you focused on this product and this product only, you'd spend about $400,000 to produce it (salaries+benefits, cost of printing the cds, advertising).

Your second product, you bill as a "server". You charge $700 for this product, which is the same as your desktop product except you strip out stuff like XF86, GNOME, kde, pcmcia support, and other things that don't make sense to have on a server. You set up contracts to bundle third party software (like say a commercial mail system, database, or whatever) as a bundle. Since you're not actually developing a whole lot of new stuff here, you can piggy back most of the costs (salaries+benefits) on to the cost of the first product... so the actual cost to produce is around $200K. And today, you've sold a couple hundred units, so an expectation of shipping 1000 units isn't too far beyond the scope of believability (we're keeping numbers round here to make the math easier).

Since there's a lot of overlap, both of those products can arguably be considered the same thing (but from a sales/revenue standpoint, they're distinct).

And now you have the last product. A load balancing product (clustering is beowulf, folks) that can nominally do the same thing as some of the hardware offerings from companies like Cisco.
Let's be generous and say that you will need another $200K to develop this product (probably an underestimation) by itself. It's not taking into account that you'll still need the distro to be the vehicle for delivering the product, or a full swing ad campaign. Let's say you've had that on the market for 2 months, and you've only sold 5 copies at about $2K a pop.

So, here are the numbers (sorry about the periods, but there doesn't seem to be any good way to set up a table in a comment with slashcode):

Prod___Units Sold__Price___TtlCost__ Ttl Profit
desktop.....100,000........50......(400,00 0)....4, 600,000
server.............1000......700......(20 0,000)... ..500,000
cluster.................5.....2000..... .(200,000). ...(190,000)

Now, suddenly, the dot-com era begins. VCs are throwing money at you like a Div I schools throws hookers at an all-star quarterback. You get a nice chunk of money, and you have to decide where you invest it. Do you:

a) invest more in the desktop/server product by
hiring more developers and try to increase
those sales number by improving your product
and going head to head with other commercial
distros who are doing the same thing?

OR....

b) invest money into building up a sales and
marketing brigade dedicated solely to the
cluster product in the hopes that you some day
will be able to ship 100,000 units of that at
$2K?

If you chose "a", then you're not qualified to be a TL executive. The answer is "b". And not only do we choose "b", but we start giving away our desktop product for free by reducing the price to $40, giving retail stores a $20 rebate on top of the $10 discount we already give them, and then a $10 rebate inside the box for the customer. That way, we can eliminate that troublesome "revenue" crap and turn our only source of real income into a cost center (because it's about $5 to actually make a boxed product).

And, oh yeah... let's piss off the community by trying to close source everything we can lay a claim to that isn't GPL'd (like our cluster product), release a marketing announcement for the most pedestrian of accomplishments, and generally try avoid supporting our customers with stuff like security updates.

I brought up these concerns and said, "I think it's a mistake to focus so many resources on cluster and ignore the base distro". I was told, "I don't see us being a billion dollar company without doing it."

Have you ever been in a conversation with someone and then just suddenly realized that the person you were talking was going to end up drinking the poisoned Kool-Aid and nothing you said or did would ever keep that from happening? It's a fscking eery feeling, let me tell ya.

Any rate.

To John: don't think about it, or you'll just get frustrated. To Cliff: Toldyaso. To Lonn: please stop before this happens again. And to Rok: thanks for dropping my name from the CREDITS file even though 30% of TL 7 uses RPMs with my name in the changelog, dork.

To everyone else involved in the debacle, best of luck to you and I hope things work out for you.