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Linuxcare Businesses

Linuxcare Business Shuffle (UPDATED) 115

Posted by Hemos from the rumours-brewing-around dept.
We've heard rumors that Linuxcare's upcoming IPO has been shelved for now, and that Linuxcare's CEO and CIO have been removed. This comes right after the roadshow was delayed, which now appears to be cancelled. At this time, I haven't heard back from Linuxcare, so haven't heard their side of the story. However, several reliable sources have said that there've been "irregularities" in revenue recognition, something that the linked article also touches on.Update: 04/07 11:22 by H :I've talked with Art Tyde, Founder of LinuxCare. He confirms that the IPO has been delayed - but that they believe an IPO is in their future. He also did confirm that the CEO, Ferdinand Sarrat, has parted ways with Linuxcare, but that the CIO has remained onboard, and that the management team remains committed to the values of the community and what the company was founded on.
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Linuxcare Business Shuffle (UPDATED) More

Linuxcare Business Shuffle (UPDATED)

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  • Re:Market Fluctuations (Score:1)

    by Anonymous Coward
    As someone who works for a services company (no, not Linux-related), the IPO route is very difficult. We've been told repeatedly that our pretty linear growth curve will never hold us up as a public company. The management has been repeatedly denied in various plans to go public. Other similar service companies are wallowing around the penny-stock level. Plus the vendor we have allied ourselves with is actually our biggest competitor, and tends to sell it's services by giving licence and hardware discounts. (A similar situation with LinuxCare versus VA + RedHat?)

    Linux might be a different story because the expectation is that it will undergo a huge growth curve. However, services is still a funny, people-driven business. Could LinuxCare even keep up with the Linux explosion when it happens? How do they differentiate themselves from RedHat and VA? Are they even better positioned than the numerous companies that have been doing UNIX-related services for years and have long Fortune 1000 customer lists?

    The ultimate solution at my place was to move to become a product company, to start over from scratch. You already see this in Linux space -- RedHat selling dev tools for Windows and "secure" versions of their software. VA selling high end hardware. Linuxcare selling what?
    -a coward
  • As well they should, 20 billion market value for a company that brought in something like 10 million in revenues was nuts. A capitalization of 2000 x revenue, if I'm not mistaken. Compare this to MSFT'S P/E ratio (rhat ofcourse doesn't have earnings) of 54.

    Anyway, seems like someone made some money, check out the insider trading data [insidertrader.com]

    Bob Young sold aprox. $60,000,000 worth of shares. This is just funny, what bunch of suckers would buy at that price?

    Oh, well, as they say, these days the IPO *is* the product.

    Anonymous Cow

    ps. this is not a flame bait, it's simply critical of the get-rich-quick-scheme that the market has become. In no way does this note reflect on the quality of the Linux OS, Bob Young's character, the open source community's willingness to contribute to the wealth of a select group of investment bankers, venture capitalists, and multi-billioners, or the sex-appeal of TuX tHe PiNguIn.

  • 1) Red Hat isn't a good company because they comply with the GPL. If they didn't comply with the GPL, their company would be sacked, and their employees burnt at the stake. Not to mention, their company would be sitting beneath 6 miles of lawsuits from the x-number of thousands of people who give them a product to sell. Myself included.

    The important part is not that they comply with the GPL, but that they use the GPL voluntarily. All of the software they write and distribute (that's not subject to other people's licenses, like the RSA stuff), even when it contains no patches from people outside of Redhat, is under the GPL. They don't have to do that, and it is a positive contribution to the community.

    4) Making money in the Linux community does make you evil, if you have to answer to anyone but the community. VA answers to a board of directors, now. Not the community. Same story with Red Hat. Their job is to turn a profit however they can--and thats their only job. Thats the only thing they need to care about, and consequently, that is the only thing they care about.

    Ok, now that's just wrong. Have you never heard of people trying to do a "good job" because they want to? It's the same thing with companies. Some companies genuinely try to be good. And the fiduciary responsibility argument isn't a reason they can't be good; the CEO's of these companies are not going to be sued because they've been giving back to a community which expects to be given to. And if for some weird reason they decide in the future that they should screw over the community to help their shareholders, then you can say they're all evil.

    You hate VA for various reasons and it's your right to hate them (personally I don't agree with many of the things you say, but that's beside the point), but generalizing and saying that all companies which attempt to make money from Linux are evil is ridiculous. Are all companies which try to make money in an way evil?

    And measuring your contribution in MB is a bit misleading, don't you think? Propaganda's nice (I don't care for it too much, but other people seem to like it a lot) but its being half the size of the kernel tarball doesn't make it anywhere near half that much effort.

  • Kleiner-Perkins connection (Score:1)

    by Anonymous Coward

    OK, as I understand it the CEO may have left because they weren't reporting income/profits correctly, overstating their case to hide losses, and that he left his previous job because they made up $11Mil of income that didn't exist. It also seems that the upper suits were hired by an investment firm, Kliener-Perkins. This doesn't sound right, if this Sarrat had a shady past, why did the investment firm hire him?

    LinuxCare has been one of the bastions of the corporate-Linux movement, a one stop shop for software support. It is one of the main things that legitimizes Linux to the PHBs. I hope they get their shit together before their reputation hits the fan.

    On a related note, I noticed no information on their homepage, how reliable is this source (g2news?) anyway? And who is this CEO, some corporate Mr. Fixit? Doesn't appear to be working, I've seen a couple of disgruntled LinuxCare people post.

  • <SARCASM>That's okay. We're all supposed to interpret everyone's actions in the worst possible manner. It's called "being analytical" and is apparently an effective way to be counter-cultural. Yes sir, only conformist drones give anyone the benefit of the doubt.</SARCASM>

    'K. Enough ranting. Sorry you had to be on the receiving end of someone's paranoia.

  • Hmm. (Score:1)

    by volsung ( 378 )
    I can see where you're coming from. I've been the victim of my own rant. :( I assumed motives for your actions that were untrue. It's too bad that distrust and paranoia have to govern our actions these days. I kind of liked being able to trust people.

    Sigh.

  • >Theres a growing awareness among the real Linux community that we

    I think you make a valid point there, Bowie.
    I mean, who is the "Linux Community" exactly?
    Is it the hackers? The users? Anybody who does business and uses the word Linux?

    Y'know everybody has priorities, and as far
    as I can tell, you don't get to be a CE/IO
    because your top priority is making the world a better place.

    This country is the most religious in the world. Our god is money.
    Who can afford to be an infidel?
  • I'll have to "me too" that one. Definately one of the sites that got me started using Linux.

  • Sometimes, oftentimes, these days, I get the feeling that Slashdot ain't what it used to be. Too many American teenage jerks blowing off about liberty and communism and many other memes for which I feel they are particularly unqualified to comment on.

    Then...

    Every once in a while...

    Comes along a thread that makes you realise that it's all worthwhile, that if you want to keep your finger on the pulse, you have to be reading here.

    Heartfelt thanks to all the contributors with an inside angle who contributed to this thread.

  • All the Linux companies are either getting abandonned by their CEO's or have lost 75% of their stock value in the last 3 months. Red Hat has a larger market share than Apple yet Red Hat is trading at 1/4 what Apple is. Caldera is now $16. Linux wizardry systems is 3 1/8. The problem seems to be the margin from support and hardware isn't producing enough revenue to support application development. With all the support calls they answer, the only software RedHat can skim off their margin is installers but there's only so much you can do with an installer.
  • The local rep was in last month, with the "Linux-on-a-Business-Card" micro-CD.

    He indicated that they were, at least in the local area, having a harder time getting in the door at local businesses than they had expected.

    If the business plan assumed that they were going to have huge numbers of service contracts, and that it would be really easy to set up service contract relationships, that nicely explains the failure of the business plan, and the resultant failure of the attempt to "go IPO."

    I was pretty skeptical that they'd be easily able to sell service contracts... Of all the potentially legitimate Linux enterprises out there, LinuxCare seem to me to have the weakest case...

  • have a look at this month's issue of Fortune Magazine.

    If there is a URL, would you mind posting it? I just checked the Fortune Magazine web site but couldn't find the article. Thanks!

    E

  • a failed revenue model for the open source software industry.

    Overhyped, not failed. Most newcomers to the Linux world measure its success by its ability to generate revenue, which is not the reason Linux (or free software in general) was created in the first place.

    It is so far relatively unimportant for the penetration of Linux that it be able to make some company money. If only technical support, userfriendlyness, etc can continue to be finessed and standardized without a particular corporate agenda, we are going to remain immune to the rise or fall of particular companies.

  • No, you don't need anybody in particular in life, but I have to take issue on you poking at Redhat and VA.

    I work for Andover (being aquired by VA), and we work hard at trying to do things that will benefit the open source community. I suppose that maybe you had a bad experience somewhere along the line and feel slighted, and I don't know your exact situation. All I can say is that Andover is the best place I've ever worked and the people that I've met from VA are some of the most public conscious people that I've met. They do care about the community. I get paid to work on an open source project, and we do our best to help the public, and do things that will benefit the public.

    When we put out a new release of Slashcode, I make sure that any developer gets credit on any of their contributions to the code, or even ideas that they contribute.

    It's really hard to read a lot of comments here attacking the various Linux companies, when I know the truth of how hard we work at doing the right thing. All this vitriol that I've been reading about how we're just out for the money or profit, is just utter nonsense.

  • However, several reliable sources have said that there've been "irregularities" in revenue recognition, something that the linked article also touches on.

    This Slashdot news item, and the story it links to, relies too much on unnamed sources, "reliable" sources, and rumors. Maybe there's a reason no sources are willing to have their names associated with this information.

  • ROTLMAO! Maybe I am just slap-happy because the week is finally over. As immature as the post was, I am still laughing.... heeheeheeheehee......

    C'mon, someone have a sense of humor and moderate the Coward's post up a bit, eh? = )
  • Bowie, give it a rest, OK?

    It's over. Done with. History. Move along.

    _Deirdre
  • I definitley agree with you on the budget concious, and direction. Desktop support was something of a week point.
    I hoped Pat can bring things together. I never knew her. I have known alot of good Pat's though. Hopefully with her business since, and Art's people skills and vision they can turn that outfit around.
    I am not sure NT laptops were the solution. Give people what they want! If it is a dual boot NT, and Linux laptop then so be it. Or Mac and Linux! What some people don't get is that Linux can't do everything. Alot of things, but not everything. Desktops being one of them.
    The previous IT manager was a good guy. I liked him. I felt he had gotten screwed.

    Here at Apple we have a very nice mix.
    Cheers,
    WFE
    ===========
  • "Red Hat has a larger market share than Apple yet Red Hat is trading at 1/4 what Apple is."

    For all those who criticize the press for infactual information, please get your posts correct. Linux has 25% marketshare in the SERVER market. A high margin, but relativley small market.
    Overall Linux has between 3-5% of overall marketshare. Apples total market share has increased to about 7-10%. These numbers vary on who you talk to, dataquest, pcdata, etc.

    Red hat doesn't have a larger market share then Apple in the overall market. In the server market yes, everywhere else, no!!
    Cheers,
    WFE
    ===========
  • Incidentally, CDW's site is built on ASP and SQL Server.

  • Most of what you had to say was right on, but WOW is the Herman Miller Aeron a nice chair.

  • > And call me chirs, I'm only 28 for gods sake.

    So what's up, chirs?
  • Yahoo is making money. I think they have since June last year.
  • I don't think that was LinuxCare. Wasn't it LinuxOne that was shady and pumping hype?

    Goes to show, too many LinuxSomething.com's out there...
  • We didn't need them before to be happy and successful, and we sure as hell don't need them now. Companies like Red Hat, VA, and LinuxCare have only made the game more interesting...

    I think that this is a total overstatement. I don't work for any of these companies so I don't know exactly what goes on inside them but RedHat and VA Linux have netted a distinct positive for the communitty. Red Hat has always released its code until the GPL and is committed to doing so in the future. VA Linux owns Andover now so essentially they provide the money to make Slashdot go. They also do much the same for sourceforge and linux.com. Making money does not make them evil. If they didn't make money (or at least attempt to) they wouldn't be fulfilling their basic stated purpose as businesses.

    Essentially go blow it out your ass. We don't need them, but don't negate what we have gained from them.

  • ...but a buddy of mine worked at LinuxCare for a scant couple months, and left saying they "don't have their sh*t together." Anybody have other inside scoop that might confirm/deny this?
  • Well I'm no expert in the stock market but I do enjoy watching it and I can tell you that when your stock is trading at 200 in Jan and falls to 50 1/8 on April 7th that is not a good thing. True it was insanely overvalued at 200, but when a stock has as much negative momentum as this one that is not good at all.

    I'm not trying to be negative but the shine has worn off Linux with the folks on Wall Street. Now that's not to say that things won't change, after all we are in the very early stages for Linux companies but I feel very bad for anybody who bought VA Linux when it was trading in the 200's because you have probably lost a good chunk of money.
  • Whethter or not this was the specific issue with LinuxCare (if, indeed, there is an issue) revenue recognition is the beast the gores many a company: I think it is what undid the stock value of MicroStrategies. The issue is that what seems quite natural in many cases is not legal.

    It is often the case that you get a contract for services, and get money in hand for that contract. The tendency is to recognize that money as revenue. Unfortunately, you can't recognize the revenue until you actually perform and bill the work. It gets even more complicated when get money up front for software which you haven't yet delivered. Part of that money up front should be assumed development services, which you can recognize while you perform the development, part is product revenue which you can recognize when you ship. (Note: IANAL or Accountant)

  • It worries me if Linuxcare is running into trouble. Their Australian division has hired a whole bunch of good linux people (Paul Mackerras, Andrew Tridgell, etc.) who are developing a lot of important packages (samba, rsync, ppp, linuxppc for PowerMac). I would not like to see that effort broken up.
  • oh puh-lease. what the companies have contributed is arguably a helluva lot of cash for coders to work on free software, free webhosting and more PR for linux. always a good thing. youre just bitter cause VA screwed you over sourceforge but face it bub - a lot of us get free webhosting and dev tools because of slashdot and it benefits the community in turn. what have *you* ever done except propaganda (which you shut down) ? These companies have to turn a profit, but they also do help the community.
  • I think this is a bad turn...How many more companies offer Linux support contracts?

    I *know* they have more name recognition in companies. If you can call and get support==more linux used in businesses.

    Steven V.
  • This is obviously a victory for the slashdotters and in-the-know people. The public outpouring of criticism must have hit a nerve someplace or else this company would have IPOd and made big bucks as people wallowed in the buzzwords "linux""support" etc.!

    See, an organized; vocal; non-malicious approach works!

    This also shows the inherent market checks and bounds as the SEC would have been all over these people if the had any "creative accounting" going on.

    you can fool all off the people some of the time or
    some of the people all of the time
    but you can never fool all of the people all of the time
  • Your #3 comment states that "VA got smart and decided to purchase Andover".

    I do NOT think is was a very smart purchase. VA paid almost a billion dollars for andover.net. Fiscally, this is anything but smart.

    Now if VA would have bought Cygnus, or Inprise/Borland, or Corel, or LinuxCare, well... that would have been smart.

    I like VA, but since the IPO they have made some poor financial decisions. Today their stock closed at 50 from a high of 320. As a linux user it is in my best interest that they stay in business. They have some really good people there that I'd like to see working at VA. However, if they don't wise-up financially then VA will end up being a footnote in the history of linux.
  • What do you suggest they use? Remember that being a Linux/Free Software/Open Source company doesn't mean that everyone working there is accustomed to using text-based email clients. Not to mention the fact that except for the beta Mozilla, there isn't a "full featured" open source web browser/email client available.

    There are solutions on the way, but the browser & email client are two weak spots in the open source/free software lineup. Most people have just been using Netscape under Linux, but it's not Free (4.x and prior versions) and it's not a very stable piece of software.

    I would imagine that many people at LinuxCare do use Free Software when they can. But it makes no sense to berate them over someone using OE for email.

    Michael

  • A few months back, RHAT announced that they were going to have a secondary public offering of 4M shares. If I recall correctly, that is how Slashdot reported it. Upon digging deeper, I noticed that the company was selling 2 2/3 M shares, and the insiders were selling 1 1/3 M. They assumed that investors were to stupid to notice. . .

    This is pretty (at least somewhat) common, actually. The basic idea is that it's better for the stock price (and therefore, for the underwriter's reputation :-), if the insiders sell their stock in a controlled fashion, via a secondary offering, rather than just simply dumping them on the market. For this reason, it's actually encouraged, and the underwriters had to have given the insiders permission to sell before the lockout period had expired, so they could sell it as part of the secondary offering.

    As far as whether or not the insiders should have sold, well, that's always a hard call. Even if you think that a particular company, whether it be IBM, Coke, Disney, AOL, or Red Hat, is the greatest thing since sliced bread --- holding all of your investing dollars in a single stock is rather risky, and diversifying is a good thing to do. So just because some of the employees are diversifying doesn't mean that they don't have faith in the company. They could just simply be trying to make some product investment decisions for themselves --- always a personal matter, and one for which I don't think we should give them too much grief about.

  • I thought the article was well written and to the point. You seem to be confusing negative lunix information with bad writing.

    I thought the *most* interating articel on the page was reagrding *Lynx Real-Time Systems*. Now there is a peice of technology worth bragging about. These guys now how to write a hard, deterministic, POSIX compliant real-time OS. Not some fakey add-on like the linux real time mods are.
  • Do you really think it matters if their biz guys don't use Linux?? It's obvious that Windoze still rules on the desktop market, so why not use an arguably superior office suite to make your life easier, especially if you're just counting beans all day?

    I generalized but you get the idea ...

  • A LinuxCare employee recently addressed our user group (NTLUG), telling us of the things LinuxCare was attempting, and what they were doing. His talk was from a sales/technical point of view. They are doing well on a Linux cluster. They need to break through the resistance of able managers to using Linux, mainly by establishing themselves as an on-call, always ready service organization.
    The mini-CD-ROM he passed out had a lot to offer, including reboot capability. He made no comment about upper management, and none was requested. Users are interested in useful product, not high-sounding statements. The delay in the IPO involved matters of no real interest to the user group, other than we wish them to continue doing business.
  • Good post. But it's worth pointing out that those linux stocks are still trading well above their IPO price. It's obvious that the initial fervor in demand was a huge misjudgement, though.
  • you said _met_ deirdre, not _know_ deirdre.
    once again, you are another /. poster who has no idea what he's talking about.

    you might as well have posted something or other about natalie portman...


  • This goes way beyond market fluctuations. Clearly in order for both folks to get the boot, something is wrong with the management (not the business model of Linux companies in general).

    Note that Linuxcare is a unique company from most of the other Linux IPO's to date. VA Linux started out mainly as a Linux hardware vendor and integrator, RedHat is a distributor and has now branched out into services and greater development. Linuxcare was services based from the start.

    r/

    Dave
  • As a longtime FOD and former BFOD, I find your comment inaccurate, not to mention insulting. I will be happy to vouch for both her ethics and her technical skills.

    Granted, Lizard vouching for someone else ethics is somewhat dubious...

  • Somebody moderate the parent to this post up, it was acutally funny!!!
  • Red Hat isn't dead, see (http://biz.yahoo.com/bw/000406/nc_red_hat_1.html) . I don't always think the 'stock price' actually reflects the value of the company. It might have something to do with prestige, but the money generated by the IPO stays with the company. The stock price just affects shareholders. Red Hat seems to be a pretty quality company and have not, like Linuxcare, had problems at the top. Linux may not be ready for the desktop soon, but in the server area it's going great!

  • Linuxcare Situation (Score:2)

    by Anonymous Coward
    Linuxcare is a cool place to work as long as you aren't currently in IT. Here are some more comments from the ex-employee brigade.

    Business is hard, and good business is even harder. The community supports you when you are up, and often kicks you when you're down. For example, many Linuxcare employees were papered with job offers from VA the minute the press hit. As much as I love VA, I find the "elite dude," mentality annoying on /. so why would I want to deal with that at the office.

    The CEO was a sharp mind, but extremely poor manager and brought all the old bad IBM stuff with him. He brought in the CIO sight unseen because of his paper credentials. He also (perhaps unknowingly) assembled a steller management team. Linucare was flooded with notes saying the new CIO was bad news. Rather than act on this info they gave the guy a chance. Perhaps that was a mistake... but in this community, no one seems to deserve a second chance... He did build one giant infrastructure- perhaps that investment will pay off when the company scales. As for the financial accusations, they are bullshit. The ex-CEO got nailed before for revenue recognition issues and as a result Linuxcare has been crawling with auditors since day one. Linuxcare has clean books, end of story.

    I am told that the internal morale situation is on a real upswing. Many employees feel as though the management team and founders got sick and tired of the CEO's political games and lack of cluefulness, stormed the hill and took back the flag risking both employment and professional reputation. What it says is that the LC management team is willing to do whatever it takes (including shelfing the IPO) to build the best possible business with the best people in the Open Source community. Yeah, you'll ocassionally find a Windows machine at LC and you'll also see some Sun. Many people at LC are MSCE and CNE's, hell- one of the founders is a ex-390 guy. So what does that say... it says shut the hell up and experience the reality check that is business.

    There are always disgruntled people that will say just about anything when they feel wronged. There are also people who have been casualties of the growing pains or vengeful CIO. The simple facts are, Linuxcare is an open source company that supports the community in all sorts of ways. Linuxcare dosen't flaunt that shamelessly. Most employees are satisfied with the work situation, all understand that fast growth can sometimes be painful. Over the years, the LC founders have shown that when things get in the shit, they'll do whatever it takes to fix the situation. That this is also true for the management team, IMHO, is a bigger win for Linuxcare than any IPO.

  • So what? I use Linux as my primary system, but occasionally I still have to use Microsoft or other proprietary software. Unfortunately, Linux has no (yet, I hope) full-size office tools, let alone 100%-compatible with Microsoft ones. Hell, we don't even have working browser with HTML4/CSS support, as of now (Netscape, unfortunately, doesn't qualify as "working" - it's hardly half-working). I know that's hard to do and that's not Linux fault, snd many brilliant people do their best to fix it - but the fact is it isn't here yet. Reality is you have to do unpleasant things in your life, like using Word and Outlook...
  • Yet another anonymous coward wrote:

    Now I'm going to slither out of here before Rick Moen figures out who this is...

    I don't look under rocks that small.

  • An anonymous coward wrote:

    I think the one anonymous coward was right: that was Arthur F. Tyde III, not Rob.

    In fact, Rob wrote me in e-mail and said it wasn't he -- which is good enough for me.

    Therefore, Rob, my apologies. It did sound like you, especially in post #184 [slashdot.org] (earlier in the thread -- and I notice that some other commentators felt likewise), but the recent posts seem to be from someone much higher up in the organisation.

    I perhaps should have recognised that fact, as to the latter posts, because Rob has a sense of personal ethics.

    Rick Moen
    rick@linuxmafia.com
    (speaking for himself)

  • Yet another anonymous coward took a swipe at Deeny:

    1. You are a disgruntled employee who is grinding an axe....

    You are almost certainly an employee, and very likely a particular department head with a distinctive writing style, who is attempting character assassination from behind cover of anonymity. I believe that just might be considered to speak volumes.

    I'm not going to blow your cover, sir, but I do hope you're aware that your audience includes co-workers bright enough to draw their own conclusions about the veracity and ethics of the sundry parties?

    I suggest you think twice before attempting this sort of tactic again, or I just might "out" you.

    Regards,
    Rick Moen
    (speaking for himself)

  • The rather talkative, insider Anonymous Coward in this thread wrote:

    Auditors are not HR people.

    This was in reply to Deeny's:

    So, should talking to an auditor be a firing offense? Because one of Linuxcare's IT staff was fired for apparently that. Which brings up the interesting question of what she could possibly have said that might have made that much of a difference...unless it involved things like, oh, employee emails being sniffed by the IT staff, or things that might actually get a company in a great deal of legal hot water. Or perhaps she was talking about the numerous reports of racist, sexist and (in San Francisco!) homophobic remarks from current IT management, leading the auditors to believe that the employee relations were, um, weak.

    "Auditors are not HR people", you say? What a fascinating comment.

    Rob, I'd just like to make sure I understand what you're saying, here: Are you saying that a sysadmin's having talked to auditors has suddenly become a fireable offence?

    You see, I used to be in the financial accounting business. Doing audit work, no less. And I seem to recall that auditors are allowed and encouraged by both their engagement letters and business law to ask any employee questions.

    So, now, you're admitting that your firm fired a sysadmin (or was that two sysadmins) for cooperating with routine business checks on management operations and records? And implying that this is routine and expected at your firm?

    My goodness. I wish you guys luck, but I suspect you have some quite serious fundamental problems, if this is any indication.

    -- Rick Moen
    rick@linuxmafia.com
    (speaking for himself)
  • He was invited, on the second day, I personally invited him. As to the rest, whatever, he hates us, I'm fine with that.

    Chris DiBona
    VA Linux Systems
    --
    Grant Chair, Linux Int.
    Pres, SVLUG

  • No prob, I was there tuesday and thursday. for some panels I was on/moderating as part of the Linux for Suits thing. I'm not sure who was in the booth that morning, but I was mainly flying into la, doing my thing, and flying back to San Jose. (both days).

    So, there you go. I'm trying not to get myopic about how things are percieved in the outside world. It's easy within any group of any kind to lose objectivity, if you do, it's the end. But what's cool about Linux and such is that, unlike most companies we have people who are more than willing to call us on crap all the time, all we have to do is pay attention. And call me chirs, I'm only 28 for gods sake.

    Chris
    --
    Grant Chair, Linux Int.
    Pres, SVLUG

  • My post was not intended to be an advertisment. Sorry you took it that way.
  • At the risk of sounding accusatory, it seems to me that LinuxCare was focusing _too_ much on the tools surrounding support in a varieity of areas.

    Certainly giving your support team the tools to do their jobs is critical, but the impression I got was that management wanted to generate tools to actually do the work. I've seen lots of companies try to do this and fail. I have never seen such a set of tools that handle more than 5% of customer requests. What's far more important is making sure these tools document information so that they can be of use internally as well as externally.

    Hopefully I misinterpereted things, and LinuxCare is already working on these issues.

  • I don't know that, having been fired from Linuxcare, being turned down by a company while job hunting is "get around a lot." The turndown was based on my resume, not an interview, so apparently they believed I wasn't a fit. As it happens, I had already accepted another position, where I'm currently working.
  • The previous IT manager was a good guy. I liked him. I felt he had gotten screwed.

    I won't deny that there were things I liked about SM, but I don't feel he got screwed[1]. And, you have to admit that, since you were his favorite employee (hand-picked and all), you have a different perspective. Just as RonBob and BobRon (as we called the pair underneath the CIO, having initial trouble telling them apart) have about the current CIO.

    I know how other people fought to have basic respect for their jobs and themselves.

    [1] He had a long history of short stints as a manager -- 3 to 6 months, so pretty clearly he'd run into these same issues before. He's also been, just from people I know, at at least two places since. I remember hearing Talin [sylvantech.com] saying that he'd left a position not too long ago.

    _Deirdre

  • IT at LC is a trainwreck.

    Of course it is.

    If you had any management experience you would know that the person at the top sets the standards and boundaries for an entire organization.

    Is this an explanation for why so many IT managers were sexist, racist and homophobic? Otherwise, I don't get your point.

    The reason LC IT got off to such a bad start is they had a system admin team who essentially wanted to be paid to sit on their butts all day bantering with each other online. Any attempt to squeeze any real productive work was met with cries of foul and BS community posturing. The attitude seemed to be - if I am rude enough to people they will stop asking me for things. Much like their behavior on local LUG mailing lists.

    Funny, most of the LC sysadmin team stayed (I was not a member of it). And the rudest member stayed. And the one that one of the founders said was least productive is the one that is still there. Yep, you cleaned house all right. And the ones that left took higher-paying and more satisfying jobs elsewhere. The characterization of them sitting on their butts was spin control. At one point, IT was a very tightly meshed group, but management found that a threat.

    What would your position be if DN and minions were the next scapegoats on the list? Would anything but the public eviceration of the board and founders meet with your approval? Lots of complaints but no solutions.

    The reality of VC is this: when the VCs start managing the day-to-day aspects of the business, its days are numbered. They want to get their money out. It's going to be a quick IPO, damn the morale in IT. But not for YOU. Not for YOUR BENEFIT (or mine, as I am a shareholder). The point, as it has become obvious, is NOT to build a company, but rather to eviscerate one. Linuxcare has been turned down for purchase by other companies. VA snubbed Linuxcare and bought Andover for about the same amount of money. If I worked at Linuxcare and knew that, I would feel insulted. Of course, likely the staff weren't told that. It would be bad for morale.

    And why should VA or Red Hat, which have viable management structures and revenue streams in place, want to pay that much money for Linuxcare? In another few months all those geeks will be on the market and Red Hat and VA have correctly figured that they will probably still want to work in Linux companies. Why pay today when you can have it for free tomorrow?

    The point, in case you missed it, was probably best stated by a friend of mine, who said that Linuxcare, never having a viable business model other than "go IPO," was really nothing more than LinuxOne with some people (the geeks) who were sincerely trying.

    To get back to your question, the only way it has a prayer is a) slowing growth (because growth is expensive) and b) cutting costs.

    _Deirdre

  • Since this is a former linuxcare employee thread. (Not fired though, left of my own will.) Fernand brought maturity to Linuxcare. He brought in seasoned managers. Managers who knew and understood the fortune 1000. What I think happened, was that there maybe wasn't a balance with the people who understood Linux as a whole. Dave Sifry, and Art Tyde are shining examples of people who do. When I was there had an influence on Fernand. Fernand was a performance based individual. You did good you kept your job. You did bad, wham!
    I left about a month before Nasuer started. But Linuxcares IT infrastructure when I was there, had all the physical pieces in my opinion. It just needed a good orchestrator. Maybe Naseur would have been good in other environments, but not in this one.
    On the other hand starting with a certain VP of engineering, linuxcare had a habit of screwing good people. (don't read into this to much, I was not one of them.)
    Cheers,
    WFE
    ===========
  • Having worked there, I know the corporate directive was use what you know to get the job done. You don't give the CEO's secretary a linux box with GNOME. Nor do you give a graphic artist red hat box with gimp, when he has been using photoshop all his life.
    Cheers,
    WFE
    ===========
  • Their Australian division has hired a whole bunch of good linux people (Paul Mackerras, Andrew Tridgell, etc.) who are developing a lot of important packages (samba, rsync, ppp, linuxppc for PowerMac). I would not like to see that effort broken up.

    This is a situation in which a company such as VA Linux, RedHat, or TurboLinux could step in and do some real good, should LinuxCare stumble or fall. Perhaps Andrew Tridgell, Paul Mackerras, and the others could be hired by one of them, creating in part their "Austrialian Office" but more importantly able to keep food on the table while continuing to develope samba, etc.

    Whatever happens, I'm sure none of them would remain unemployed for very long, before someone (hopefully not Microsoft) would snap them up.

  • Thanks for the reply, Mr. DiBona. Didn't really mean to pick on your company too harshly in my post, but it stuck in my mind this week, and I probably went a little overboard because of the bogeyman thing. I wouldn't expect you to air the internal details here, but I do think that it's excellent that some accountability is being taken for the IW 2000 thing.

    I think that in a market -- the Linux market -- in which emotional arguments and religion play such a huge role, there can easily be a tendency to look closely at good things and just shrug off any bad events as being caused by outside persecutors. In the long run, the willingness to confront and address the bad things, like you did in your post, will be much more helpful to any company's future than will ever be any number of Slashdot posts from the fans proclaiming everything to be perfect.

    Thanks again, and just curious, but were you at the show Wednesday morning? I exchanged hellos with one guy, but I didn't check any name tags, so I have no idea who was there at the time.

    Cheers,
    ZicoKnows@hotmail.com

  • Underwriters have found that presidential elections negatively affect IPOs and so discourage them, regardless of market sector. I'm sure this is a factor in what's going on.


  • If you go back and read my response carefully, you'll see that I didnt say "Anyone who makes money off Linux is evil."

    I said, anyone who makes money off Linux -at the expense- of the community, is evil. Theres nothing at all wrong with making money off Linux. Good examples of this care Copyleft, Cheapbytes, LinuxMall and others.

    Try to read what I write a little more carefully next time. Its all too easy to fly off the handle with an opposing point of view.

    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])

  • Call up Red Hat. Tell them you're trying to get a job, and ask them if you may list someone within their company as a job reference, since your work is included in their distrib. They wont even know who you are.

    Lets suppose you did some work for VA instead. Call em up and ask if you may list someone within their company as a job reference on your resume'. The answer will be an equally flat "No." because they dont know who the hell you are either.

    They dont know who you and I are. They don't know who you and I are because they dont care who you and I are. They dont care who you and I are because they dont have to care. They dont make any money by caring. See how it works yet?


    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])
  • Well, lets see...What have I done for Linux.

    I had a paper published in Linux Journal a few years ago, when InSight blew up. Our head coder (Hi Ben) had absolutely nothing to show for 6 months of work between late 97 and early 98.. I ended up donating my end of the workload to Gnome and Red Hat. A measly thousand icons, some music and a few icons. Anyway--back to the article in LJ.. I didnt have the money to afford a patent-filing fee, so, I let that idea (and others) go for free. Someone later built it, and added it to the Gnome CVS tree. A nice thing.

    Then theres TFUG, my local Linux users group here in Tucson. I've given more than a few talks there over the yeas, and have spent virtually every other Sunday of my life since 1996 there helping people enjoy Linux, both new and old.

    Then there was the little matter of the Gnome Style Guide in summer of 98. 3 or 4 months of my spare time went into that until it dissolved into a convoluted mess of bickering and flame. It got people thinking about the UI, at least. Oh well, can't win em all. ;)

    Oh, then theres that little thing with VA called Themes.org where I busted my ass as a volunteer for nearly two years. Was on staff at t.o for a while, and was even asked by Trae McCombs at one point to be site manager of the whole damn thing. (I declined it. I was too busy with school, running Propaganda, and working simultaneously.)

    Then theres Propaganda. a year and a half worth of work, all of it in your lap, and everyone elses lap, for free. Now you and about 2-3 million other people have a pretty desktop. You're welcome.

    Then there's System 12.

    Nowadays, theres MetaLab/UNC, Spindletop and other little things i'm quietly up to. Sure, plenty of people have done more than me. Written drivers, applications and whatnot..But an awful lot more have done less than me, too.

    So..What have you done lately?

    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])

  • Since you wrote your response as an Anonymous Coward, I cant address you directly, so..

    Sorry you feel that way.. You might want to read VA's own press release announcing ColdStorage from Aug '99. I posted the link to it a few messages ago. It sounds absolutely nothing like SourceForge. While you're at it, you can go have a look at the interview I did for Linux.Com back in November, which _does_ sound alot like what later became SourceForge. I have a feeling VA canned ColdStorage when it became clear that they were going to buy Andover. It would have been stupid for them to continue with building ColdStorage in that case. Why ColdStorage never saw the light of day has never been established. Ask yourself why.

    As for Trae, sorry, I dont talk to liars, nor do I keep them as friends. That rule applies both to my personal life and professional life. The scene is rife with people who by virtue of working with him, hold the same opinion of him as I have. You'de be surprised at the volume of email I've recieved from people who've had similar run-ins with him. I can't say I was too surprised at his effort at damage control, tho. Its typical of his style.

    Him and Tony (the ColdStorage/SourceForge guy)are best friends in real life, I later found out. It wouldn't surprise me in the least that what I told Trae idea-wise for weeks on end last year may have ended up on Tony's desk as work orders.

    So, you can go ahead and hate me for having an opinion. It doesn't really change the facts, unfortunately. Sometimes I wish it did.

    Ciao,



    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])
  • Sorry to rain on your flame, but I never accepted any money, or any hardware from VA, or anyone at VA. Trae tried to give me a computer once "to be nice", but I had a long talk with my folks about that "gift" at that time..Ultimately, I decided that such a gift would have only obligated me to do similar work for him for free, so I rejected it.

    The server that was provided for System 12 was only given to me so that I would have somewhere other than themes.org to house my project. It wasn't a "gift". Want some email for proof?

    I should note, however, I did once change my mind; When System 12 rolled around in June of 99, I felt that the year or so's worth of work I would be putting into the project justified such a gift. I finally agreed to let him send me a computer.

    No computer ever arrived.

    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])

  • I came back from vacation and discovered that I didnt recieve one of these letters, nor did about two dozen other people I felt should have deserved one but didn't recieve it. I emailed you and asked not for an invitation, but >why I wasn't sent one. You sent me one. I rejected it.


    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])
  • The important part is not that they comply with the GPL, but that they use the GPL voluntarily. All of the software they write and distribute (that's not subject to other people's licenses, like the RSA stuff), even when it contains no patches from people outside of Redhat, is under the GPL. They don't have to do that, and it is a positive contribution to the community.

    True, Red Hat has given alot to the Linux community. But the vast majority of that _stuff_ was done while they were still a privately-held company. I dont think anyone at all had a problem with the old Red Hat. Its the new one people think smells funny.

    Bleh, what do I care, i'm moving out of my apartment tomorrow. Wheeeeeee :)

    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])
  • ) Never forget that you make money one sale at a time. Every sale and every customer counts. Unless you deliver customer service that is ABOVE AND BEYOND the ordinary, your customers will shop elsewhere.

    You hit the nail right on the head. Our gung-ho economy has fostered a genre of companies that have no clue what customer service is. I can't say that one e-commerce company I've used had not fsked up at least once; none have ever responded with anything nearing an apology. BUY.COM apparently hasn't even figured out that I stopped buying from them yet because of their shoddy treatment. (And yes, I recognize that BUY is, ironically, one of the few e-commerce companies that has cut a profit.)

    I wish you luck in your business. Unfortunately, you probably won't see dividends for your committment to customer service until the economy turns south, at which point consumers become much more picky about customer service.

  • Bowie,

    Your absolutely right, Coldstorage sounds nothing like SoureForge. Thats because I was allowed to take the basic principles of Coldstorage and expand and improve on them. VA allowed me the flexibility to take the original project and turn it into something else entirely. The basic priciples of Coldstorage are found within SourceForge so if You feel the need to ask yourself "Whatever happened to Coldstorage?" Just point your web browser of choice at http://sourceforge.net

    As for your interview at Linux.com back on November 3rd, 1999. Think about it. We released SourceForge to the public on November 17th, 1999. Do you really feel that we wrote 2MB of PHP code and setup 16 servers in 2 weeks ? It isn't possible.

    As for my relationship with Trae, I don't know if we could be considered "best friends". Yes we are friends, I cannot deny that. But I'm friends with Chris DiBona, Mandrake, Raster, and San Mehat as well. The fallacy of your statement: "It wouldn't surprise me in the least that what I told Trae idea-wise for weeks on end last year may have ended up on Tony's desk as work orders." is that I don't work for Trae anymore than I work for Chris, Raster or Mandrake. He's not in my reporting structure at all. Period. And I didn't take orders from anyone concerning the building of SourceForge. Tim Perdue, Drew Streib and myself sat around after LWCE in August and came up with the principles of SourceForge. We defined the information and system architectures behind it on our own. As a matter of fact, there was only about 10 people at VA other than us that knew what we were doing and Trae wasn't one of them. So give it a rest.

    Period.
  • > it's worth pointing out that those linux stocks are still trading well above their IPO price. It's obvious that the initial fervor in demand was a huge misjudgement, though.

    Actually, it was only a huge misjudgement for whoever bought them last, before they fell.

    If you bought them at an "overvalued" price and sold them at an "even more overvalued" price, it was not a misjudgement for you, no matter how "overvalued" the price was by any rational analysis of the firm's assets.

    In the stock market, even more so than in the real world, goods are "worth" whatever someone is willing to pay for them.

    --
  • Red Hat as a larger market share than Apple

    This is a ridiculous statement. Redhat's revenues were $5.4 million with a loss of about $3 million for the quarter ending Nov 1999, Apple's sales for the same period were about $2.5 BILLION with a profit of about $183 million.

    Apple as an operating company is 500 times the size of RedHat, and has a profit stream more than 30 times the size of Redhat's total revenues.

  • That article seemed confusing and poorly written, but what I gleaned from it is that all the rumours the CIO and CEO have, as the article says, 'bitten the dust' have been officially denyed. I don't read all the linux news journals around - can anyone tell me how reliable a source Linuxgram (g2news?) is, or can link to some more sources that discuss this topic?
  • I'm not currently a moderator, but that's a good article, worth moderating up as "Insightful". (I don't know if anybody will see this, given the huge amount of noise in the above threads :-)

  • http://crackmonkey.org/pipermail/crackmonkey/2000q 1/008192.html just hope this doesn't put my boyfriend out of a job...
  • I am a Tech trainer (mostly M$ stuff) in NJ. One of the companies I teach at was going to offer Linux classes put together by LinuxCare, but when they asked LinuxCare for the curriculum two months before the classes were supposed to start, they said "We're still putting it together." I think the idea for the company is good, but the implementation is not.
  • The stock market is ruled by mob mentality. Given that, the tips by the experts tend to become self fullfilling prophecies. The experts are beginning to say that the "New Economy" model has come to an end (as before they said it was comming to and end). They say that investors are going to start worrying about the bottom line instead of the top line. It really shouldn't be long before people start listening.

    I have my faith that the market will soon recover and that people will start rewarding business potential (aka the top line--revenue stream independent of initial operating expenses) like they did when this New Economy started. But I also imagine that the investors are going to be a little more selective in the future. Strapping a dot-com to your company name won't be enough to have a sky high stock price. And between now and then, there is going to be a time when it is bad for high tech companies to enter the market because investors will be weary of all companies that might make up the failing New Economy.

    Having said that, I think that LinuxCare shelving their IPO is actually a good thing. The linux community doesn't need to see a company fail because it couldn't get enough of its needed startup funds from its IPO. On the other hand, I think that it does need to see some companies fail. But, I'd rather see a company fail because of a failed business plan, or something else that other companies can learn from. Kind of like an open source economics... Everyone else sees how everyone else operates. The good stuff rises to the top.

    I'll stop now, I am reverting to straight rambling.

  • LinuxOne is another company; perhaps you have confused LinuxCare with them?

    LinuxCare has done some genuine useful work.
  • ... a failed revenue model for the open source software industry. From the sound of the article, the problems stemmed from personnel choices, but I can see the mainstream and M$-friendly press fueling the FUD machine with this.

  • Re:Clean up your own house first (Score:3)

    by chrisd ( 1457 ) <chrisd@dibona.com> on Friday April 07, 2000 @09:20AM (#1145276) Homepage
    No, you're absolutely right. If Linux companys want the support of the community they can't do a poor job.

    And I assure you that someone is being called on what happened at InternetWorld. It was poor showing for us. I could give you reasons and such, but I'm not going to talk about internal things here.

    That said, obviously I can't ocmmment on the stock stuff, just to say I don't think that a valid effort has been done on the part of wall street to understand linux really, and for that matter linux companies should be doing a -much- better job of educating our finance folks in New York and elsewheree on why it's a better choice and is a good buy on the market.

    I've said this before, although not here, if Linux companies want to succeed they have to be realy really really good at what they do. VA , for the most part, is really good at what we do, but we make mistakes and right now, we've not made a huge amount of them, but we are addressing it, I assure you.

    Chris DiBona
    VA Linux Systems
    chris@valinux.com
    --
    Grant Chair, Linux Int.
    Pres, SVLUG

  • This is only the beginning.... (Score:3)

    by Electric Eye ( 5518 ) on Friday April 07, 2000 @09:42AM (#1145277)
    Not neccessarily for Linux-based companies, for for a butt-load of tech companies shooting for IPOs. Take a look at what's happening, people. Everyone's lost sight of what *business* is all about. What the hell are companies like pets.com, E-Machines, LinuxCare, ad nauseum going public for? What so different about a business simply because it's got a ".com" name to it? Apparently, we're finding out it's "not a whole lot." The IPO now seems to be what everyone gives a shit about and it's payback time, baby. You thought a lot of companies were getting hit now in the stock market, keep your eyes open.

    LinuxCare is yet another joke of an example. Shady accounting practices (duh). No real business plan (duh). And really shows no potential of being a formidable business.....EVER. Same goes for the companies mentioned above. You can drop in almost any name, btw. Look what happened to Eprise (EPRS) and E-Machines. They went public 2 weeks ago, and their charts look like divebombs. WHERE'S THE MONEY?? WHERE ARE THE REAL REVENUES? WHERE IS THE REAL GROWTH GOING TO COME FROM?

    Every one of you should get your hands on a copy of FORTUNE Magazine from 3 weeks ago. It goes very deep into the schemes dot.com companies are pulling just to get funding, boost their IPO...only to base it all on ficticious/not-very-solid business. It's really sad, but greed is going to let out a lot of the hot air out of the dot.com bubble. And this garbage with LinuxCare is your typical reason. Good riddance.

    Sorry for the rant....

  • Re:Linuxcare Situation (Score:3)

    by deeny ( 10239 ) on Friday April 07, 2000 @08:55PM (#1145278) Homepage
    Ghods, I do so love spin doctoring. This sounds more like a piece from one of Linuxcare's current management than from an ex-employee. I'll take these slightly out of order:

    He [DN, the CIO] did build one giant infrastructure-perhaps that investment will pay off when the company scales.

    Please do yourself a favor and take corporate finance. Until you do, here's the rule of thumb you learn on the first day of class: What kills a business in the short term is cash flow, what kills a business in the long term is capital budgeting (i.e. long-term assets).

    Any investment needs to return, in cold hard cash, the amount invested plus the cost of capital (which, in this case, includes the expected return on investment for the venture capitalists, which is NOT SMALL). In other words, the $5M they've pissed away on Sorcerer (I've heard it's more than that, but I'll be charitable) is something where if they don't actually make, over less than two years, $25M from it, they will be making a losing investment.

    If it won't pay off until the company scales, re-evaluate the project when the company scales. Invest the money now in something that will have a quicker return if possible. Linuxcare has an immense staff for it not to have "scaled."

    Another point of any investment is that it reduces one's choices of other investments. In other words, given the revenues they had, they'd probably have been much, much, much better spending the money in acquiring more sales staff or increasing the efficiency of the sales staff they have.

    The CEO was a sharp mind, but extremely poor manager and brought all the old bad IBM stuff with him. He brought in the CIO sight unseen because of his paper credentials.

    Actually, that's not true (about the sight unseen). As far as the management goes, he was brought in by the board, who had a long, hard look at his past. Evidently, they felt he was an appropriate match.

    The ex-CEO got nailed before for revenue recognition issues and as a result Linuxcare has been crawling with auditors since day one.

    Everyone who files for an IPO is crawling with auditors. The prior history of Fernand was common knowledge when he was hired. Yet, the management hired him anyway to legitimize their IPO. That's how it was spindoctored when he was hired. So amusing to see it go the other way later. "Oh, we didn't know [cnet.com]." Yeah right.

    So, should talking to an auditor be a firing offense? Because one of Linuxcare's IT staff was fired for apparently that. Which brings up the interesting question of what she could possibly have said that might have made that much of a difference...unless it involved things like, oh, employee emails being sniffed by the IT staff, or things that might actually get a company in a great deal of legal hot water. Or perhaps she was talking about the numerous reports of racist, sexist and (in San Francisco!) homophobic remarks from current IT management, leading the auditors to believe that the employee relations were, um, weak.

    I am told that the internal morale situation is on a real upswing.

    That's the beauty of scapegoating -- you can temporarily improve morale by getting rid of one person and spindoctoring it so that people who don't know better believe it. And geeks, being generally naive about people, unfortunately tend to.

    Over the years, the LC founders have shown that when things get in the shit, they'll do whatever it takes to fix the situation.

    You mean over ONE year, don't you? The company hasn't been around more than a year. Its formal introduction to the world was 13 months ago at Linuxworld. As for the sentiment, there was a time when I believed that and got burned by my faith.

    I think Linuxcare has a chance, but not given the course they've apparently chosen to take. The next round of scapegoating will likely be the last.

    PS - "fix the situation" in this case means "get the investors their money back as quickly as possible" - quite possibly to the detriment of other stockholders, such as the Linux geeks that are the pillars of the organization.

    _Deirdre

  • Re:Clean up your own house first (Score:3)

    by deeny ( 10239 ) on Friday April 07, 2000 @10:41AM (#1145279) Homepage
    I don't think that a valid effort has been done on the part of wall street to understand linux really, and for that matter linux companies should be doing a -much- better job of educating our finance folks in New York and elsewheree on why it's a better choice and is a good buy on the market.
    One of the things I managed to do this semester was take some finance classes, including one on options trading. I didn't realize how much of it was people-intensive and how much of the stock market is simply attention span. I happened to have the luck to have Paul Lane, an Order Book Official for the Pacific Options Exchange, as the instructor. In that class, we got to know what it was really like as a business from the inside. I heartily recommend it (it's offered through Berkeley extension) to anyone who has to do investor relations. Really an eye-opener.

    The people in the market are mostly sheep, even the market makers. The market makers go where the action is. If there's a lot happening at one station on the floor, that's where they'll be. They make their money on the spread, so they care a lot about volume. And they have to be really aggressive.

    So, while the education campaign would probably help, it's still a business where a large chunk of the movers and shakers have VERY short attention spans and try and cover or close their positions within the day where possible, within the week if not. Institutional investors tend to have longer attention spans. Individual investors are the group most subject to panic. Unfortunately, a lot of the Linux investors have likely been individuals. A lot of people were buying Linux because Microsoft's future looked bleak. But not bleak enough apparently.

    _Deirdre

  • Re:Moving on (Score:3)

    by deeny ( 10239 ) on Friday April 07, 2000 @01:46PM (#1145280) Homepage
    I spent a 5 week period at Linuxcare this year. What I saw there was pretty ill. It was a rats nest of clueless managers slinging NT laptops spending money as fast they could. The CIO was a greyman drone who created a police state atmosphere where people were afraid to point out the insane path the company was on. I am very happy to have cut my losses and got out quick. There were many smart people in SF but nothing could make up for the inhuman working conditions and venomous politics. I am happy to be out.

    When I was fired, after some panic from upper management, I was given three options: Come back and work under the CIO; Resign; or Remain fired.

    I pointed out that I couldn't, in good conscience, work under the CIO (I had offered to work under another group, such as the one Art Tyde had headed at the time). The CIO had a plan and none of us who were there were a part of that plan. Resigning had negative financial consequences (I wasn't going to pay money to leave, especially since I would have preferred to stay working there) and I considered it an after-the-fact misrepresentation of what happened. So I accepted being fired.

    But working at Linuxcare before that was so different: there were problems, but not venomous politics OR inhuman working conditions.

    There were people using Windows (and MacOS), but most people used Linux. People used what they had to to get the job done. A lot of people, for reasons that should be obvious, needed compatibility with documents like Office 2000 in order to get contracts hashed out, etc. Office 2000 document compatibility isn't really available on Linux yet (last I checked).

    I needed a good drawing program and the best one for my purposes ran on MacOS X Server (Glyphix rocks!). So one day, Linus Torvalds walks by my desk and peers at the screen. I felt about 6 inches tall at the time.

    But as far as your characterization of what it was like under the CIO, I couldn't put it in better words myself. I know people working there who were just ducking their heads down, marking time until the IPO. That's not the kind of attitude that makes a company a good place to work.

    Linux, after all, is the ultimate skunkworks [whatis.com] project. Management that respects and fosters the skunkworks model would clearly be an advantage at a Linux firm.

    _Deirdre

  • Re:Moving on (Score:3)

    by deeny ( 10239 ) on Friday April 07, 2000 @12:36PM (#1145281) Homepage
    Fernand brought maturity to Linuxcare.

    Very much agreed. When he first showed up, I thought, "this guy's been at IBM for 20 years. He's never gonna fit in." At one of the first company meetings, he fired someone with a nerf gun for running on too long. At that point, I realized that it might work after all. And I think he really did take a bunch of geeks and form a real organization.

    Since the announcement's been made about the Office of the CEO replacing the position of CEO, I will say that I think Pat Lambs is awesome. I remember her from the brown-bag luncheons.

    I left about a month before Nasuer started. But Linuxcares IT infrastructure when I was there, had all the physical pieces in my opinion. It just needed a good orchestrator.

    Linuxcare's IT infrastructure at that time consisted of a handful of people and not a whole lot of equipment. I think with a good overall manager who was somewhat budget-conscious, they would have done very very well with about double the staff. As I'm sure you know, they needed more desktop support and some direction.

    On the other hand starting with a certain VP of engineering, linuxcare had a habit of screwing good people. (don't read into this to much, I was not one of them.)

    I knew you weren't Roger. :) But yes, the prior IT manager was a nightmare. Two for two.

    Btw, glad to see you're doing well. We hadn't heard a peep from you after you left. And yes, I did figure out who you are. :)

    _Deirdre

  • Clean up your own house first (Score:3)

    by Zico ( 14255 ) on Friday April 07, 2000 @08:27AM (#1145282)

    You bring up FUD in the same breath that you drag out those favorite Slashdot bogeymen, Microsoft (wow, that "M$" spelling sure is original) and the mainstream press. The Linux companies need to get their own acts together, and the Linux community needs to recognize its own flaws before whining about other entities.

    Just as an example, I was at the Spring Internet World this week. VA Linux was there, but somehow they didn't manage to make it into the convention's regular program, but rather some flimsy black and white "Addendum" that few people probably read. I stopped by their exhibit, and it was a medium-sized one, meaning that they actually did spring more cash for it than a lot of the smaller booths. However, it seemed totally devoid of any purpose. They had a cool-looking rackmount system, but it didn't look like it was doing anything but performing as eye candy, and the 4 or 5 VA Linux guys there were just standing around smiling with their hands in their pockets. It was definitely the least interactive of any similarly-sized booths at the show.

    Was this due to poor and late planning on VA Linux's part? (I only went on the first day, so if they ever improved their booth, I didn't see it.) Anyone have the answer? Anyone here bother to call VA Linux out for this shoddy display? Apparently not -- I guess it's just easier to trot out the old bogeymen.

    As I'm posting this, Andover.net is down a full point, Caldera is down more than half a point, Corel is unchanged, VA Linux is down 3.75, and RedHat is down more than 3 points. (The lone bright spot I see is Cobalt, up 6.) This is all while NASDAQ as a whole is up over 124 points. Is it any wonder why a Linux-related company would be hesitant to try a Linux-related IPO? Is the mainstream press not supposed to report on the obscene levels at which the Linux stocks are tanking? It sure doesn't sound like you're looking for objective reporting.

    Cheers,
    ZicoKnows@hotmail.com

  • 1) Red Hat isn't a good company because they comply with the GPL. If they didn't comply with the GPL, their company would be sacked, and their employees burnt at the stake. Not to mention, their company would be sitting beneath 6 miles of lawsuits from the x-number of thousands of people who give them a product to sell. Myself included. I may not have any mission critical code in Red Hat's distrib, but my contribution to the distribution itself is fairly large -- 11 MB.

    2) Slashdot was doing fine (some would argue, better) without support from Andover, or VA. They arent necessary to Slashdot's existance, and never were.

    3) Before VA got smart and decided to purchase Andover, they were planning on building a Freshmeat clone, to compete with it for community mindshare, and ultimately push Patrick and his project out of existance by sheer force. Rather than allow or encourage Freshmeat to prosper, they wanted it to destroy it and replace it with something they had direct control over. Don't believe me? Read this [linux.com] press release from August '99. Don't be surprised if its gone by the time you read this. By August '99, Freshmeat was already the established watering hole for new software in the Linux community. What reason, other than greed, would VA want to reproduce what already existed?

    ColdStorage never saw the light of day. Think about it---why pay your employees to build a site from scratch and spend alot of time and effort trying to compete when you can just buy your competition outright? Sound familliar?

    4) Making money in the Linux community does make you evil, if you have to answer to anyone but the community. VA answers to a board of directors, now. Not the community. Same story with Red Hat. Their job is to turn a profit however they can--and thats their only job. Thats the only thing they need to care about, and consequently, that is the only thing they care about.

    It is a fundemental betrayl of the very principles which made Linux even possible in the first place. Cooperation, mutual respect, and community effort. Not competition, hidden motivations, and monopolization of utilities. When one company owns what you read, what you download, and what you use, its time to ask questions. If you dont, you are doing a grave disservice to yourself. If VA truly is a good-natured company, they will stand the test of time.

    I don't see that as being the case, here.



    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])

  • There's one good thing about all this..Theres a growing awareness among the real Linux community that we are in the middle of a pool of sharks--People who care less about the people involved than they do about turning a goddamn profit. Now you're seeing what happens to these people. They begin to fail, because their intentions are anything but pure and innocent.

    We didn't need them before to be happy and successful, and we sure as hell don't need them now. Companies like Red Hat, VA, and LinuxCare have only made the game more interesting..The total sum of what they've done for us is negative, not positive. Whatever they have "provided" for us, was not made by them. It was was made by us. For free, without hidden motivations.

    We don't need them.



    Bowie J. Poag
    Project Founder, PROPAGANDA For Linux (http://metalab.unc.edu/propaganda [unc.edu])

  • Re:Moving on (Score:3)

    by ezmo ( 31106 ) on Friday April 07, 2000 @12:56PM (#1145285)
    I spent a 5 week period at Linuxcare this year.
    What I saw there was pretty ill. It was a rats
    nest of clueless managers slinging NT laptops
    spending money as fast they could. The CIO was
    a greyman drone who created a police state
    atmosphere where people were afraid to point
    out the insane path the company was on. I am
    very happy to have cut my losses and got out
    quick. There were many smart people in SF but
    nothing could make up for the inhuman working
    conditions and venomous politics. I am happy
    to be out.

    -ezmo

  • Re:A growing awareness of getting screwed.. (Score:3)

    by tytso ( 63275 ) on Friday April 07, 2000 @11:58AM (#1145286) Homepage

    3) Before VA got smart and decided to purchase Andover, they were planning on building a Freshmeat clone, to compete with it for community mindshare, and ultimately push Patrick and his project out of existance by sheer force. Rather than allow or encourage Freshmeat to prosper, they wanted it to destroy it and replace it with something they had direct control over..... ColdStorage never saw the light of day.

    Actually that's not true. ColdStorage was the original idea.... and it turned into SourceForge. When a developer uploads a new release into SourceForge, it doesn't overwrite the old release's tarballs; those are archived for all eternity, so people can always download older versions: for historical purposes, in case they want to prove prior art in some patent dispute, or any other reason.

    The argument that Cold Storage was created to compete with Fresh Meat is somewhat laughable. ColdStorage, as originally envisioned, was completely different from FreshMeat. Freshmeat was (and is) a place where you can find out where you can find the latest stuff. Coldstorage was going to be an archival mechanism. So it was totally different, and wasn't about trying to force out Freshmeat at all.

    It's just that while ColdStorage was being developed, it turned out that it was just a small piece of what could be much more useful to developers. And so the CVS tree, and the bug tracking, and all of the rest was added. And so SourceForge was born.

    As for the accusations of greed, I'll point out that the disk space and network bandwidth needed to support something like SourceForge (or the original ColdStorage idea) is non-trivial. And VA Linux is making this service available to Open Source developers for *free*, as a public service. Sure, it helps VA in that it's an Open Source company, and to the extent that there's better Open Source out there, the more likely it is that people will want to use OSS, and so we expand the market for our hardware boxes and our professional services. But why would VA want to compete with someone else to provide the same (free) service? And if you think having direct control helps, look at how responsibly (IMO) VA has handled sites like www.linux.com. If you think VA hasn't behaved responsibly to the community, do please say how. From what I can see, VA has been one of the more responsible companies in terms of remembering its responsibilities to the community, and making sure that it gives back to the community. SourceForge is one of those ways.

  • I've read a few posts about overvalued IPO's and failed businesses. Although this bodes ill for LinuxCare and other startups and their IPO's, I don't necessarily see all Linux companies heading out the door. While it's true that many Tech Stocks are on their way down the toilet, this is mostly the .com's that spent their venture capital on advertising and trying to build a brand name for the services they were selling

    As it stands, I don't think this has been the case with most Linux startups. (Quick, name me the last time you saw a Linux commercial?) - Now it sounds like this CIO and CEO may have blown the finances in other ways, so that may have an impact on THIS company. I'm not prepared to give up yet on the Linux business model just because every CDNow, Amazon and 2000 other .com's are losing money. They were spending their dollars in the wrong place, that's all.

    For a great article, read the latest column on Abcnews.com's Silicon Insider - http://abcnews.go.com/sections/business/siliconins ider/siliconinsider.html - (if this doesn't reference Silicon valley and IPO's, run a search on SOMA - that'll bring it up.) Very informative and shatters many of the illusions around the Valley at this time.

    Unless the Linux start-up companies are following business models like these, they should be able to maintain some level of profitability

  • Linuxcare have a great brand name but don't use free software themselves. I applied for a sales role with them and got this set of headers on their correspondence:

    [snip]
    X-Mailer: Microsoft Outlook Express 5.00.2014.211
    X-MimeOLE: Produced By Microsoft MimeOLE V5.00.2014.211
    [snip]
    Patrick,

    I regret I will be out for most of the week at CeBit and will have to
    postpone...call me at end of week.

    Best Regards
    --
    Barry Cochrane, General Manager
    Linuxcare Ltd.
    +44 (0) 1189 880289 ext 773 tel, +44 (0) 1189 880389 fax

  • Re:linux companies going all the way ... down?? (Score:4)

    by Mr. Frilly ( 6570 ) on Friday April 07, 2000 @08:05AM (#1145289)
    And they'll keep dropping (Redhat, VA Res^H^H^HLinux, etc.).

    I wouldn't say these companies are doing badly, yeah they're still bleading money, but remember it takes most startups 5,10, even 15 years to start turning a profit. Can you name a .com company which has turned a profit? I'm sure there are a couple, but I can't think of any.

    It's not that the Linux IPO's were of bad companies. They were just the subject of rampant hype and speculation, fueled by a public which knows Linux is the next thing but without any companies to invest in. I would expect these companies share prices to bottom out below $20 a share (which is still probably overvalued), and then slowly rise as they expand.

  • Revenue reporting (Score:4)

    by Rupert ( 28001 ) on Friday April 07, 2000 @07:52AM (#1145290) Homepage Journal
    How can there be irregularities in revenue reporting? Everyone knows that Linux companies don't have any revenue.

    Maybe that was the irregularity - he was actually reporting some revenue?

    Score -1: Not funny.

  • Market Fluctuations (Score:4)

    by kirn_malinus ( 159763 ) on Friday April 07, 2000 @07:50AM (#1145291) Homepage

    With the whole Microsoft thing upsetting the stock market, especially tech stocks, I really don't think that now is the best time for an IPO anyway. If the rumor is true, and they are shelving the IPO, I don't think that it is necessarily a very bad thing.


    ________________________________________________ _______

  • official linuxcare press release (Score:5)

    by ehovland ( 2915 ) on Friday April 07, 2000 @11:02AM (#1145292) Homepage


    Rumor no more [newsalert.com].

  • How to make a .com make money (Score:5)

    by cjsnell ( 5825 ) on Friday April 07, 2000 @08:41AM (#1145293) Journal
    Bikeworld.com/weathertools.com/gpstools.com did over $4M in sales last year ($1M in December alone) and we've never had an unprofitable year.

    How do we do it? The formula is quite simple:

    1) Don't piss away money. We don't have fancy-shmancy offices with pinball machines and conference rooms full of $900 Herman Miller chairs. Nope, we build most of our own office furniture.

    We don't waste tons of cash on super-duper high availability server solutions. We don't have fibre-channel disk arrays and loads of CPU power? Why not? Because we don't need them. You don't need a highly dynamic, CPU intensive e-commerce application to sell a lot of product. We use static HTML for the most part, which helps us save on equipment costs.

    We don't hire five people to do one person's job. You see this all-too-often at internet startups. When you hire tons of people, they tend to get *less* work done. They spend most of their day in meetings argueing about trivial things.

    2) Pick a business model that actually has a chance of selling something.

    If your business model relies on advertising for revenue, give up now.

    That blowthedotoutyourass.com thing had it right on the dot (no pun intended). "ButIdontwantmytoothpastedelivered.com". The only things that people will buy on the Web are things that are not readily available in their local market. Amazon does so well because comprehensive book and music stores are still somewhat of a rarity. We do well because most local bicycle shops have very small inventories and ridiculously high prices.

    3) Never forget that you make money one sale at a time. Every sale and every customer counts. Unless you deliver customer service that is ABOVE AND BEYOND the ordinary, your customers will shop elsewhere.

    4) Be weary of outside investment. It's a lot easier to piss away someone else's money than your own.

  • Moving on (Score:5)

    by deeny ( 10239 ) on Friday April 07, 2000 @08:02AM (#1145294) Homepage
    I was an early employee of Linuxcare, fired by Nassaur last November. I think others can now see why I consider this a peculiar sort of honor.

    I hadn't suspected that the CEO was on the way out, but I knew that the CIO was likely to be. His very expensive infrastructure was completely inappropriate (and unnecessary) for a Linux services firm, and all the geeks knew it at that time. Instead of focusing on Linux, he focused on expensive, proprietary software and ridiculous hardware implementations. It was the geek equivalent of buying a Lamborghini when you really needed a Honda.

    This is the main part where the article erred -- Sorcerer wasn't the "heart" of the business at all. Nassaur *wanted* it to be. Of course, he would go into a company, spend a bajillion dollars and be out in a year (read the S1/A for his history if you don't think so...). What did he care? He had his equity and his high salary and was out of there.

    What Linuxcare desperately needs, if it is to survive, is a CEO & CIO who care about the Linux space AND about actually building a Linux services firm that serves its customers, not a few people at the top. My resume is in the mail. :)

    I'm sure, given appropriate people, that Linuxcare can be a much better company after this. My heart goes out to all my friends there after this shocking blow.

    Breathe deep folks,
    _Deirdre

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