Feeds

VA Linux sees red

Cuts 100+ staff

  • alert
  • submit to reddit

Gartner critical capabilities for enterprise endpoint backup

Did They Really Say That? (Part 94)... "In the open source world companies will have to offer employees a greater level of meaning, something higher up the Mazlow pyramid," Eric Raymond told LinuxWorld Expo three weeks ago. "Basic job security and good compensation isn't enough."

However 130 employees of VA Linux, who became ex-employees of the company yesterday, might have settled for something lower down the needs pyramid. Raymond is a director of VA Linux, which has laid off a quarter of its staff after losing $13.4m in the last quarter. Despite doubling its income to $42m on the back of the rising popularity of enterprise Linux in the period, VA Linux's expenses have also doubled.

In addition to the staff cuts, which CEO Larry Augustin said would be made in "non core" areas, the company would discontinue building custom hardware. "It was never core to our business model and we can't afford those investments," he said. Instead software engineering and software customisation would attract the focus. The company now expected to be in profit next autumn, nine months later than had been mooted, although Augustin said predicting demand in the coming months was next to impossible. The company said it was budgeting for costs of $30m for the coming quarter, saving a quarterly $5m over its current burn rate. VA has $126m in the bank.

The company's online publishing and software services network OSDN (which includes Slashdot and SourceForge) accounted for 10 per cent of income, and services 8 per cent. VA Linux saw margins slip on the bulk of its business, servers and NAS, to 16 per cent down from over 22 per cent. Two large customers - hosting site Akamai and stock trading company account for almost 30 per cent of VA's income between them.

Although it invests heavily in R&D, employing a stellar team of free software luminaries, that investment is beginning to pay off, with the NAS 2230 kit being an example. VA promoted Ali Jenab, formerly a President at Amdahl, to serve as COO and President, and appointed new VPs of engineering and marketing. ®

Related Stories

Class action lawsuit filed against VA Linux
VA Linux revenues up 547 per cent

Secure remote control for conventional and virtual desktops

More from The Register

next story
Why has the web gone to hell? Market chaos and HUMAN NATURE
Tim Berners-Lee isn't happy, but we should be
Mozilla's 'Tiles' ads debut in new Firefox nightlies
You can try turning them off and on again
Microsoft boots 1,500 dodgy apps from the Windows Store
DEVELOPERS! DEVELOPERS! DEVELOPERS! Naughty, misleading developers!
'Stop dissing Google or quit': OK, I quit, says Code Club co-founder
And now a message from our sponsors: 'STFU or else'
Apple promises to lift Curse of the Drained iPhone 5 Battery
Have you tried turning it off and...? Never mind, here's a replacement
Uber, Lyft and cutting corners: The true face of the Sharing Economy
Casual labour and tired ideas = not really web-tastic
Linux turns 23 and Linus Torvalds celebrates as only he can
No, not with swearing, but by controlling the release cycle
prev story

Whitepapers

Gartner critical capabilities for enterprise endpoint backup
Learn why inSync received the highest overall rating from Druva and is the top choice for the mobile workforce.
Implementing global e-invoicing with guaranteed legal certainty
Explaining the role local tax compliance plays in successful supply chain management and e-business and how leading global brands are addressing this.
Rethinking backup and recovery in the modern data center
Combining intelligence, operational analytics, and automation to enable efficient, data-driven IT organizations using the HP ABR approach.
Consolidation: The Foundation for IT Business Transformation
In this whitepaper learn how effective consolidation of IT and business resources can enable multiple, meaningful business benefits.
Next gen security for virtualised datacentres
Legacy security solutions are inefficient due to the architectural differences between physical and virtual environments.