Feeds

Could Linux IPOs be a better bet than Web ones?

The money flowing into Linux outfits could be more justifiable

  • alert
  • submit to reddit

Providing a secure and efficient Helpdesk

With the coming to the market of a number of Linux companies - VA Linux Systems debuts this week - day traders are beginning to realise that Linux IPOs may turn out to be hotter and possibly more reliable than Internet ones. This is good in that venture capitalists and investment bankers could do more for Linux development than all the enthusiasts so far. Even hearts and mind campaigns can gain from the financial suits bringing some recognition to Linux and encouraging the stuffier enterprises to consider adopting Linux. Of course the potential changes in the development model may not necessarily be welcome to the community. A distinction needs to be drawn between distribution developers and Linux hardware vendors, so it is Caldera and SuSE in particular whose possible IPOs will be awaited with interest by the community. A first concern of many is likely to be a dislike of profit being made from the sweated labour of those who have contributed at a real cost to themselves. The counterbalancing benefit of development funding is likely to go to a partially overlapping set of developers, but at the same time the availability of some serious funding could change the ethos of the movement in unwelcome ways. How it will all work has yet to be determined, but it is not a wholly bad situation. It seems quite likely that the odd Linux support and service provider may be next to try an IPO, especially with the likes of SuSE pioneering by making a strong effort to provide enterprise-level support. Red Hat was first offered at $14, and was trading today at $220. Server vendor Cobalt Networks beat VA Systems to the market. It has a market capitalisation of $3.9 billion following its IPO at $22, and had a 404 per cent jump in its first day's trading on 5 November. This was not quite as much as theglobe.com (606 per cent) or Foundry Networks (525 per cent), but quite extraordinary and ahead of the levels seen in 1998 when EarthWeb was the top performer with 248 per cent. Cobalt is trading today at around $141. VA Linux Systems, describing itself as a provider of Linux-based solutions, filed for its IPO in October and will be traded this week, probably on Wednesday or Thursday with the ticker LNUX, which in itself could prove to be an asset. Some 4.4 million shares are being offered and a significant premium is likely over the initial $11 to $13. The cash raised is to be used for general corporate purposes. The company recently announced it was partnering with Loki Entertainment Software to distribute the Debian GNU/Linux retail package. In November, it formed a partnership with O'Reilly and SGI to distribute Debian. Of course the common feature of these Linux-based companies, like nearly all Internet offerings, is that they are not profitable, and are banking relatively little money. This situation can only last so long as the markets remain buoyant, and there are always clouds on the horizon. So far as developers are concerned, it is now possible to see the open software movement moving towards the mainstream, just as the PC market was in the late 1980s. It would make little sense to resist the new ethos: after all, wasn't success part of the original objective? ®

Providing a secure and efficient Helpdesk

More from The Register

next story
Phones 4u slips into administration after EE cuts ties with Brit mobe retailer
More than 5,500 jobs could be axed if rescue mission fails
Driving with an Apple Watch could land you with a £100 FINE
Bad news for tech-addicted fanbois behind the wheel
Special pleading against mass surveillance won't help anyone
Protecting journalists alone won't protect their sources
Phones 4u website DIES as wounded mobe retailer struggles to stay above water
Founder blames 'ruthless network partners' for implosion
Apple's iPhone 6 first-day sales are MEANINGLESS, mutters analyst
Big weekend queues only represent fruity firm's supply
Radio hams can encrypt, in emergencies, says Ofcom
Consultation promises new spectrum and hints at relaxed licence conditions
Bill Gates, drugs and the internet: Top 10 Larry Ellison quotes
'I certainly never expected to become rich ... this is surreal'
Big Content Australia just blew a big hole in its credibility
AHEDA's research on average content prices did not expose methodology, so appears less than rigourous
prev story

Whitepapers

Secure remote control for conventional and virtual desktops
Balancing user privacy and privileged access, in accordance with compliance frameworks and legislation. Evaluating any potential remote control choice.
Intelligent flash storage arrays
Tegile Intelligent Storage Arrays with IntelliFlash helps IT boost storage utilization and effciency while delivering unmatched storage savings and performance.
WIN a very cool portable ZX Spectrum
Win a one-off portable Spectrum built by legendary hardware hacker Ben Heck
High Performance for All
While HPC is not new, it has traditionally been seen as a specialist area – is it now geared up to meet more mainstream requirements?
Beginner's guide to SSL certificates
De-mystify the technology involved and give you the information you need to make the best decision when considering your online security options.