Date: Tue, 20 Feb 2001 13:33:23 -0800 (PST)
From: Larry Augustin
Organization: VA Linux Systems, Inc.
To: All Employees
I'd like to thank everyone for their patience while we've gone through
our planning process.
As you've probably heard by now we will cut our operating expenses by
at least $5M per quarter going forward. We need to do that to stay viable
as a business during the economic slowdown. It's very disappointing
to have to do this, but some very large companies (Dell, HP, and GE
for example) have had to do this as well. We are not alone.
Economic growth has slowed for the economy in general and for us
specifically. We must reset our plans to get the company back on
track towards profitability, and we must reach profitability at lower
revenue levels.
In order to cut that much spending, we need to reduce headcount by
25%. We constantly hear that everyone is overworked and we are trying
to do too much. The only way to reduce headcount and not be more
overworked is to focus on what is important and drop what is not. At
the same time we must improve customer focus and accountability.
We have identified three strategic areas where we will focus, and cut
investment in other areas. Those areas are Storage (NAS), SourceForge
OnSite (SFOS), and Web server solutions. We will be increasing
headcount in those three areas significantly, and cutting headcount in
other areas as a result.
We are also making some significant organizational changes to help us
achieve success in those three areas. First, I am pleased to announce
the promotion of Ali Jenab to President & COO. Ali will focus his
attention on operational success within the company, while I will
focus on strategic direction and customers. I have the utmost
confidence in Ali's ability to manage the operations of the business.
Reporting to Ali will be these people in each of the major functional
areas:
SVP Marketing - John Hall will move to the role of SVP Marketing. All
marketing functions within the company, including corporate marketing,
product marketing, and community marketing will report to John. John
has complete control of all marketing functions and control of the
marketing budget. I'm confident in John's ability to lead the
company's product vision and positioning from this role.
SVP OSDN - Richard French will continue in the role of SVP OSDN that
he took over from John just a few weeks ago. Richard has a goal of
maximizing the amount of leverage we get in software engineering by
utilizing the Open Source community on OSDN. Richard's background in
developing Enterprise software at Oracle will be a huge benefit to us
in this role.
VP Quality, Service, & Engineering - As announced earlier, Allen Ibara
will assume responsibility for all quality, customer care, and
hardware engineering functions. Allen has proven his skills over the
past two quarters with a significant improvement in quality. Allen
also has extensive experience running mission critical support
services in his previous jobs. Bringing Allen's strong management
skills and devotion to customer quality to a broader role will help us
in engineering management.
Also reporting directly to Ali will be these senior managers in their
existing roles:
SVP Sales - Bob Russo
VP Professional Services - Kyle Spencer
VP Manufacturing - Daniel Shore
VP Human Resources - McKinley Littlejohn
Finally, Todd Schull remains as CFO reporting to me.
In addition to the structural changes in senior management, we have
instituted a mechanism for creating accountability in the company for
our key areas of focus. We have created top level P&Ls for our
important lines of business, and assigned responsibility for those
P&Ls to product line managers. Further, we are in the process of
identifying team leads for each of the major functional areas
(engineering, marketing, sales, support, and operations) within each
of those lines of business.
Over the course of the next few weeks, the product line managers will
finish building their teams and report the team leads, goals, and
business plan to the company. Ultimately every employee will have a
one-page summary for each of these lines of business so we all know
who is responsible for that business as a whole and for the functions
within that business.
First, the areas of key investment for us:
SourceForge OnSite
Headcount: 31
Product Line Manager: Adam Frey
NAS
Headcount: 30
Product Line Manager: Cheryl Sindelar
Web Server Solutions
Headcount: 9
Product Line Manager: Jay McKinsey
Our change of focus here is apparent from the resources we have
devoted to each of these businesses. We have moved away from working
on a variety of different products into focusing on these 3 areas.
In addition to those 3 key areas, we have structured the company into
6 other lines of business with P&Ls and definitions of clear
responsibility. These areas are important to our success:
Linux Servers
Headcount: 108
Product Line Manager: TBD
Open Source Infrastructure Solutions
Headcount: 23
Product Line Manager: Marty Larsen
Contract Engineering
Headcount: 13
Product Line Manager: Marty Larsen
OSDN Online
Headcount: 50
Product Line Manager: Jeff Bates
OSDN Events
Headcount: 5
Product Line Manager: Mark Stone
OSDN ECommerce
Headcount: 12
Product Line Manager: Doug Schatz
As we look at the business, there are a number of areas that we have
not funded. We had to make some difficult decisions about what
businesses we were in, and what businesses we were not in. We
selected the top three businesses and assigned to them whatever
resources they needed to be successful. With the remaining
businesses, we chose those that were least defocusing, best leveraged
our Linux and Open Source expertise, best leveraged OSDN, aligned with
common target customers, and provided us the most differentiation in
the market.
We have a tremendous opportunity in the businesses we have chosen to
target. We also have a tremendous opportunity for other products and
businesses that we have chosen not to target. Before we build those
new businesses, we must make these existing businesses work. We must
focus all of our energy behind these lines of business. Once they are
successful, we can turn our attention elsewhere to new ideas.
We are the leading company in Open Source. Deutsche Banc Alex Brown
expects corporate IT departments to spend $75 Billion dollars by 2004
on Open Source. We can be the leading company providing those IT
departments Open Source solutions. We have $126 million dollars in
the bank to do it. But we must execute. We believe that the changes
we are making today and over the rest of the quarter will put us in a
position to execute.
Slashdot Mirror
He's a gay asshole.
Can't stop laughing.
Who fuckin cares about stinkin Australia?
No, the First Post should be on the front page!
Villeneuve did quite well, getting back at those flag-waving guys.
Yeah, a lot of things are forged in Italy.
Italian Steel?? It's used in the tyres, right?
Date: Tue, 20 Feb 2001 13:33:23 -0800 (PST)
From: Larry Augustin
Organization: VA Linux Systems, Inc.
To: All Employees
I'd like to thank everyone for their patience while we've gone through
our planning process.
As you've probably heard by now we will cut our operating expenses by
at least $5M per quarter going forward. We need to do that to stay viable
as a business during the economic slowdown. It's very disappointing
to have to do this, but some very large companies (Dell, HP, and GE
for example) have had to do this as well. We are not alone.
Economic growth has slowed for the economy in general and for us
specifically. We must reset our plans to get the company back on
track towards profitability, and we must reach profitability at lower
revenue levels.
In order to cut that much spending, we need to reduce headcount by
25%. We constantly hear that everyone is overworked and we are trying
to do too much. The only way to reduce headcount and not be more
overworked is to focus on what is important and drop what is not. At
the same time we must improve customer focus and accountability.
We have identified three strategic areas where we will focus, and cut
investment in other areas. Those areas are Storage (NAS), SourceForge
OnSite (SFOS), and Web server solutions. We will be increasing
headcount in those three areas significantly, and cutting headcount in
other areas as a result.
We are also making some significant organizational changes to help us
achieve success in those three areas. First, I am pleased to announce
the promotion of Ali Jenab to President & COO. Ali will focus his
attention on operational success within the company, while I will
focus on strategic direction and customers. I have the utmost
confidence in Ali's ability to manage the operations of the business.
Reporting to Ali will be these people in each of the major functional
areas:
SVP Marketing - John Hall will move to the role of SVP Marketing. All
marketing functions within the company, including corporate marketing,
product marketing, and community marketing will report to John. John
has complete control of all marketing functions and control of the
marketing budget. I'm confident in John's ability to lead the
company's product vision and positioning from this role.
SVP OSDN - Richard French will continue in the role of SVP OSDN that
he took over from John just a few weeks ago. Richard has a goal of
maximizing the amount of leverage we get in software engineering by
utilizing the Open Source community on OSDN. Richard's background in
developing Enterprise software at Oracle will be a huge benefit to us
in this role.
VP Quality, Service, & Engineering - As announced earlier, Allen Ibara
will assume responsibility for all quality, customer care, and
hardware engineering functions. Allen has proven his skills over the
past two quarters with a significant improvement in quality. Allen
also has extensive experience running mission critical support
services in his previous jobs. Bringing Allen's strong management
skills and devotion to customer quality to a broader role will help us
in engineering management.
Also reporting directly to Ali will be these senior managers in their
existing roles:
SVP Sales - Bob Russo
VP Professional Services - Kyle Spencer
VP Manufacturing - Daniel Shore
VP Human Resources - McKinley Littlejohn
Finally, Todd Schull remains as CFO reporting to me.
In addition to the structural changes in senior management, we have
instituted a mechanism for creating accountability in the company for
our key areas of focus. We have created top level P&Ls for our
important lines of business, and assigned responsibility for those
P&Ls to product line managers. Further, we are in the process of
identifying team leads for each of the major functional areas
(engineering, marketing, sales, support, and operations) within each
of those lines of business.
Over the course of the next few weeks, the product line managers will
finish building their teams and report the team leads, goals, and
business plan to the company. Ultimately every employee will have a
one-page summary for each of these lines of business so we all know
who is responsible for that business as a whole and for the functions
within that business.
First, the areas of key investment for us:
SourceForge OnSite
Headcount: 31
Product Line Manager: Adam Frey
NAS
Headcount: 30
Product Line Manager: Cheryl Sindelar
Web Server Solutions
Headcount: 9
Product Line Manager: Jay McKinsey
Our change of focus here is apparent from the resources we have
devoted to each of these businesses. We have moved away from working
on a variety of different products into focusing on these 3 areas.
In addition to those 3 key areas, we have structured the company into
6 other lines of business with P&Ls and definitions of clear
responsibility. These areas are important to our success:
Linux Servers
Headcount: 108
Product Line Manager: TBD
Open Source Infrastructure Solutions
Headcount: 23
Product Line Manager: Marty Larsen
Contract Engineering
Headcount: 13
Product Line Manager: Marty Larsen
OSDN Online
Headcount: 50
Product Line Manager: Jeff Bates
OSDN Events
Headcount: 5
Product Line Manager: Mark Stone
OSDN ECommerce
Headcount: 12
Product Line Manager: Doug Schatz
As we look at the business, there are a number of areas that we have
not funded. We had to make some difficult decisions about what
businesses we were in, and what businesses we were not in. We
selected the top three businesses and assigned to them whatever
resources they needed to be successful. With the remaining
businesses, we chose those that were least defocusing, best leveraged
our Linux and Open Source expertise, best leveraged OSDN, aligned with
common target customers, and provided us the most differentiation in
the market.
We have a tremendous opportunity in the businesses we have chosen to
target. We also have a tremendous opportunity for other products and
businesses that we have chosen not to target. Before we build those
new businesses, we must make these existing businesses work. We must
focus all of our energy behind these lines of business. Once they are
successful, we can turn our attention elsewhere to new ideas.
We are the leading company in Open Source. Deutsche Banc Alex Brown
expects corporate IT departments to spend $75 Billion dollars by 2004
on Open Source. We can be the leading company providing those IT
departments Open Source solutions. We have $126 million dollars in
the bank to do it. But we must execute. We believe that the changes
we are making today and over the rest of the quarter will put us in a
position to execute.
Thanks,
Larry