Lineo near Death

An anonymous reader notd a bit running on LinuxGram about Lineo about ready to croak. It paints a pretty bleak view of the Linux embedded system company. Oddly enough, I'm still not exactly sure what they were trying to do.

Simple Explanation

[Dead Penis Bird]

It was also reportedly spending $40,000 a month on an office in San Mateo, California to house 10 people

It's simple why this company is going bankrupt. It's poor management like in the example above. There are likely to be many others like it.

It's time business retreats from the glitz and gets back to basics: making money.

Yes, odd indeed

[TheGreenLantern]

Oddly enough, I'm still not exactly sure what they were trying to do.

Which pretty much explains why they are going under, doesn't it? If you can't get your point across to those that are interested in what you are doing, you have no hope when it comes to the rest of the world.

Best Quote of the Article

[EraseEraseMe]

It's said a lot of embedded engineers regard Linux as "that operating system for pimple-faced computer science nerds dressed in T-shirts they brought at the last 'Star Trek' convention."

This, coupled with "Embedded experts claim the embedded space is practically impossible to play in these days if all you have is an operating system, especially when the OS is basically immaterial to the embedded designer. The fact that Linux is ostensibly free is also reportedly a hurdle to design-wins in view of Lineo's royalty proposition." would seem to indicate what I had thought all along..."Linux is not the be-all and end-all"

Re:Simple Explanation

[Anonymous Coward]

Thank you, Mr. Insightful Armchair CEO.

Unfortuantely, there's a bit of a bias in silicon valley. They like to do business with other local firms. And rent is expensive here. But the alternative is not being considered for certain deals. It's not outright stupid decision, except in hindsight.

This is just flat out *wrong*

[BurritoWarrior]

n fact, a fair number of the last paychecks of the 50 people laid off reportedly didn't clear the bank. Paychecks paid to current employees at the end of March didn't have any funds to cover them either and automatic deposits weren't made.

The people in charge know long before all the money runs out that things are in bad shape. It doesn't sound like they notified any of their employees or gave them any warning so that they could look for other jobs.

Cripes. People have bills to pay and families to feed. Doesn't anyone have a shred of decency anymore?

Any Open Source/Linux/BSD Companies doing well?

[toupsie]

There is a tendency in news coverage to hype the bad and forget the good. That holds true with Slashdot -- with a parent like VA/Whatever-they-are-calling-themselves-today how could you not?

Is there anyone out there in the OpenSource Business World that is doing it right, making a profit and kicking corporate butt? The Mandrake Club sounds like a glimmer of hope. It would be interesting to read of stories where code freedom equals profits.

Re:How can this be?

[JordoCrouse]

Somebody mod this back up... He's an idiot, but he would be right, if thats all they were doing.

But you see, they wern't selling free software. They were trying to sell closed source software leveraged off of free software, and (more importantly) the expertise to combine the two.

They failed because of their they way they ran their business, and many, many management missteps along the way.

If Redhat goes under, then you might question the intellegence of selling free software, until then, don't give the Lineo management so much credit. Put the blame where it belongs: not on "free" software, but rather really bad business.

Re:This is just flat out *wrong*

[Evro]

Yeah, I've had this happen to me [slashdot.org], and it's really criminal. Unfortunately, the people who get screwed don't usually have the money to get an attorney so basically they're SOL AFAICT. When they did it to me I was suicidal - I was already in debt and then magically, nobody got paid, and nobody offered any explanation for 2 more weeks. Meanwhile, they shifted all the corporations' assets around so that the one who originally signed our paychecks had no assets, but the stuff we worked on for months [madster.com] is still theirs.

Makes you appreciate disgruntled employees' actions more when it happens to you.

Re:Any Open Source/Linux/BSD Companies doing well?

[Zico]

Is there anyone out there in the OpenSource Business World that is doing it right, making a profit and kicking corporate butt?

No Linux companies are, and Mandrake Club won't survive much longer either. BSD companies can because they have the ability to add value above and beyond the standard product to differentiate themselves while not having to give away their source code to their competitors just lying in wait for a code drop. If you're thinking about starting a company that's going to produce GPL'd software, please just give your money away to a decent charity so that at least some good might come of it before it's all gone.

Poor business model

[steevo.com]

Lineo was far too specialized for their own good.

I used to work for one of the biggest technology companies, and one of the projects I was working with was a device that was used an imbedded OS. WindRiver was used at first, then after their licencing became far too expensive, they went to Linux. Not having the expertise themselves to develop everything, they went to Red Had. I am not trying to say that RH is everything, but they offered everything this project needed, and at a decent price. If RH didn't get our account, that's OK, as they have other businesses to keep them going.

Lineo does not have that kind of diversification. They are/were far to specialized for their own good.

Re:Simple Explanation

[ghjm]

Uhhh..wait. I don't think this is all that far above market rates for Class A office space in that area, particularly if they have any facilities for a server room, break room, etc. How much do you think office space in California is supposed to cost?

Re:How can this be?

[JordoCrouse]

Every failed Linux-centric company had 'value added' proprietary software that they sold

As did every failed Windows-centric company, and every failed Oracle-centric company, and every failed Solaris-centric company.... Failure is not exclusive to the Linux world, though, the media may make you feel differently. This is an unfortunate side effect of being a media darling. They love you when you are doing well, and love you even more when you are failing.

And the reason is simple: Linux is viewed as "free software." And by "Linux", I mean the OS, the tools, everything. There is an entire subculture that finds the notion of paying for software offensive (though many of them want to get paid for writing it at their jobs).

But there also another entire group of large corporations that doe not want to pay thousands of dollars for propriatary operating system licences, not to mention costs for customized applications. If I can deliver the same application, minus an expensive licence for the operating system, wouldn't that make some sense?

Nobody ever said that Lineo was selling to the average Linux affcionado. Nobody, and I mean nobody will ever make money doing that. I would rather chew off my left arm than buy something from a company like Lineo, especially when I can write it myself.

Lineo was selling to the big boys, corporations who see the value in paying $20 an unit for an solution, instead of $120.

Re:What they were doing

[grahammm]

If I write an application to run on a desktop or server system running Linux, I can release it under whatever licence I like (subject to any restictions imposed by any libraries I may link with.) So why should an embedded system be any different? Granted, you would have to release under GPL (and thus offer the source for) the OS and any other GPL'd components (including any modifcations which may have made), but surely you could choose any licence you wish for applications you write in-house (again subject to any restrictions imposed by library linkage.)

System doesn't work that way.

[fm6]

It doesn't sound like they notified any of their employees or gave them any warning so that they could look for other jobs.

Face it, the whole system penalizes that kind of honesty. If you're running a big company, and you keep your troubles secret, you might be able to save the company -- and your job. But if you're too open, the investors will bail on you, and you'll find yourself out of a job -- even if the company itself survives. You might consider it selfish to put your own job security above that of your workers. But isn't the whole system built on precisely that kind of selfishness?

It's not just employees that get screwed, of course.

• Companies that are short of cash often resort to "Accounts Payable financing": ordering supplies they know they can't afford. If things turn around, they can pay off then. And if they don't, it doesn't really matter how much you owe, does it. Well, it doesn't matter to you. The suppliers might feel differently.
• Your customers are presumably going around assuming you'll still be in business tomorrow. If you don't tell them you're in trouble, they're screwed. But if you do tell them, you're screwed. Consider the typical airline bankruptcy. Never announced until the planes stop flying -- much to the dismay of people who haven't quite made it home yet.

Need I go on?

Re:Simple Explanation

[Anonymous Coward]

I used to deal with a company about 1.5 hours out SF. Those guys couldn't find a decent MCSE to hire, much less a Informix admin or a Notes developer (which is who they really needed). Oh, but the rent was dirt cheap, I'm sure.