Cobalt Networks files for IPO

A reader wrote in with the news that Cobalt Networks has officially filed their S-1 to the SEC on 9/8/99. The full story is online, although quite brief. Be interesting to see how this one goes.

Comments

Is Cobalt following the path of OpenSource?

[LL]

Well basically Cobalt sells standalone server appliances and rackmount systems, a niche area eminently suited for Linux due to hands-off maintenance and need for long-term stability. Rather intrigingly, they use MIPS-based chips (is similar to SGI) which, despite corporate x86 fixation, is a very cost-effective and efficient processor. If one ignores benchmark pissing contests, MIPS chips actually produce very good real-world application performance per dollar. Some generic reviews can be found by searching zdnet for their products. While I have no clue as to their success in the wider market, I note that several ISPs offer bulk CPU/storage/network based on amortised capital cost + (storage+bandwidth) operational charges. This may be a good choice for companies looking for a place to park their corporate data without worrying about the fine details.

The interesting question for /.ers is should Cobalt be viewed as a company that supports the OpenSource philosophy? Despite porting Linux to use MIPS, as far as I'm aware, they have not contributed their port back into mainstream (correct me if I'm mistaken). Despite distribution hiccips and angst, RedHat have recognised the value of the Linux community by releasing a portion of its IPO shares to the hacker community but then their success is directly tied to the availability of high quality source. Cobalt is not exactly the same situation being more a vertical integrator rather than Linux distributor/support.

I suspose the point of all this musing is to think and explore the relationship between traditional businesses and the OpenSource "gift economy" as detailed by ESR. Would insisting on a gift (of shares) be considered boorish? A "gift" which is automatically expected suddenly shifts from a voluntary exchange of appreciation to a compulsary tithe on the future goodwill (ie thou must give away x servers or else!) which could shatter the easy-going nature of the OpenSource community. While individuals can be expected to keep social balances in their heads (e.g. cousin x gave y last Xmas so I'll give z in return where y~=z), corporations are run on tough balance sheets principles under recognised accounting rules with the sole objective aim of increasing "value" to "shareholders". This creates an unresolved issue in dicussing how corporations can both support and benefit from OpenSource without being seen as overly exploitive (which could potentially lead to loss of goodwill). What do people think?

LL

Enlighten me

[Analog]

So the news story says Cobalt has net losses of 8.2 million on revenues of 7.7 million. A couple of questions:

• What are they spending all the money on? If it's R&D, maybe I can have an "investing in the future" warm fuzzy, but if it's manufacturing or something else I have to wonder how they're going to get costs under control.
• Of the many companies that have IPO'd with such numbers, how many have actually come back and made the investment worthwhile? And how many of those have been software companies, where the fixed costs are relatively low?
• Kind of a follow-on to #2, many software companies have proven to be good for short term stock gains despite the lack of long term profits; have any hardware manufacturers?
• And lastly, the obvious question that must be asked - how do these guys stack up against VA and Penguin, and are they really even competitors (it seems to me they aim at a somewhat different market)?