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Lineo near Death 290

Posted by CmdrTaco
from the can't-say-i'm-suprised dept.
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.
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Lineo near Death

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  • Simple Explanation (Score:5, Insightful)

    by Dead Penis Bird (524912) on Friday April 05, 2002 @02:38PM (#3291857) Homepage
    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.
    • by 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.
      • I'm not a CEO, but I am the corporate controller for a small electronics firm, so I realizre the value of proper planning and cost minimization.

        Recently, my company moved to much nicer office space, and the rent per employee approximately doubled. But it's still much less than the $4,000 per employee cited above. Even with the inflated rents in that area, that seems excessive, and would not have approved such an expenditure.
        • by Otter (3800) on Friday April 05, 2002 @03:27PM (#3292189) Journal
          I'm not a CEO, but I am the corporate controller for a small electronics firm

          I'm wondering which is a worse sign for a business -- paying $40K/month to house 10 employees or having the Penis Bird Guy as your corporate controller. ;-)


      • A solid company with a good product will have no problem making deals happen. Example: Rackspace [rackspace.com] is located here in San Antonio.
    • Check out this NPR story on EHobbies. [npr.org] This is an example of what a company must do to become profitable. They need to get rid of their expensive digs and rent a corner of an abandoned warehouse.
    • There are likely to be many others like it.

      what? you didn't get the memo [advisor.com]? I'd say these guys are like many before them.
    • Why the hell would this company dump $40K/month into SFBA offices? They are based in Lindon, UT--one of the prettiest places in the country. There are countless advantages that UT has over CA. Here are a few

      Skilled Workforce
      • Utah: Plenty of skilled folks available at a great price. Notable schools: utah.edu (early adopter of Internet), byu.edu
      • SFBA: Maybe a few more workers available these days but still overpriced. Notable schools: standford.edu, berkeley.edu


      Cost of Living
      • Utah: Cheap, cheap, cheap. You can actually rent a real house with a real yard here for less than $3000/month! For $1100/month, I lived here [blueaspen.com], no shit.
      • SFBA: I lived in a tiny room in an old lady's house in Livermore for like $650/month.


      Lifestyle
      • Utah: Gorgeous mountains, beautiful deserts, great skiing (snow and water), hiking, Utah is actually quite cosmopolitan, "down home" friendly folk, and YES, there are plenty of places to get drunk. Park City has 5-star restaurants and is the home of the Sundance Film Festival.
      • SFBA: High crime rate. Smog. Traffic. Rude people. Drive 4+ hours to ski. Nice restaurants, though.


      Geekiness
      • Utah: High speed access available most everywhere, even up in some of the mountain towns.
      • SFBA: When I left in 98, they still had no DSL. Things have changed since then, I'm sure.


      Did I miss anything?
      • > Did I miss anything?

        Ah Utah [bbc.co.uk]! The extensive proving ground for biological and chemical warfare agents? The vast chemical weapons stockpile? The massive chemical weapons and hazardous waste incinerators? The huge hazardous and radioactive waste landfills? The bombing ranges? The magnesium plant with the record for most toxic air-polution?

        This Is Still The Right Place ... for the National Garbage.

        Regards, Ralph.

        • I drove through Utah from Colorado to Nevada once. On entering there was a sign with the state motto "The Right State". Someone obviously familiar with UT had inserted Wing between Right and State.
      • Well, for starters Salt Lake County in Utah is ranked #31 on the American Lung Associations 2001 State of the Air worst counties. San Francisco, San Mateo and Santa Cruz had no measured unhealthy ozone levels in that year. Why would they? The on shore breeze blows it all towards the inland valley.

        You missed the bay area weather. Seasonally it is very mild.

        In your "skilled workforce" section you forgot that Stanford and Berkeley are two of the top 5 engineering schools in the country according to U.S. News & World Report.

        A "few" more workers available? You haven't been out here in a while have you? You have no idea how much talent is lying around out there unable to get a job anywhere (the market *really* sucks right now). There are thousands of talented (and tens of thousands of wannabe talented) people desperate for work here. People with Masters Degrees and experience behind them are taking 60K/yr jobs, if they're lucky enough to find them.

        And as someone else mentioned, companies in the bay area like to do business with companies in the bay area. Why? They have this obsession with driving and meeting face to face I suppose. I've always been bitter about this fact. I've experienced it first hand a number of times. If they don't think they can get on the phone and arrange a meeting (and they love meetings, maybe that's why the dot coms failed, too many meetings about "what are we going to do?" and not enough doing) they don't want to do business with you.

        I love Utah, and if there were jobs there, I'd move there. I like big houses in low density housing communities. But it's not for everyone, and there is no Sand Hill Road. Your Rackspace argument doesn't really hold. It's a hosting company. They're providing a service completely different from what Lineo is trying to do. Heck, Lineo was based in utah but they had a bay area office because they knew if you want bay area companies to buy your product/service, you need to be in the bay area.
      • Did I miss anything?

        Yeah--Utah is a nasty place to live. It's illegal to homebrew, the state's run by Mormons, and AFAICT the entire place is about as dead as the rock which makes up most of the state.

        I'd rather have offices in North Carolina or southern Virginia.

    • by cornice (9801)
      Poor management? Of course it is but let's look at the pressure to do this.

      For example, a close friend of mine was working for a company working on PKI stuff. They had hundreds of millions in funding from a prominent international investment bank. They were told repeatedly that they were not spending fast enough! There were some suggestions that subsequent rounds of funding hinged upon meeting a specific burn rate. Obviously this all changed very quickly and all funding dried up and so did the company.

      So who is to blame? Yes management is ultimately responsible and no excuse is going to bring the company back but it should be noted that the decisions that were made were not as irrational as they seemed.
      • When VCs tell a company they're not burning fast enough, they want you to hire more people, and expand the business faster. A really stupid manager thinks that it literally means to burn up more dollar bills.

        From the article, I say Harris is the kind of guy that's doing the latter. Letting time run out, and having paychecks bounce, is utterly irresponsible, and grossly immature. If the investors let people like that run a 100-person company, they deserve to lose their money, and Harris deserves to be in hall of shame.

        No excuses accepted.
        • If you want to increase your burn rate, the best way would be to buy new offices. Keep buying offices and leaving them empty (maybe hire one or two token people to go in them). If the VC funding later dries up you can sell the real estate and live off the 'fat' for a while. This assumes you don't want to grow as quickly as possible and hire as many people as possible (some companies want to do that, some don't).
    • by ghjm (8918)
      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?
      • so freaking move! that's the lesson I wish our company (now bankrupt) with "marketing and sales" in San Diego. Geez, talk about blowing the money on something that could be anywhere.
        • Go tell it on the mountain, Brother!

          A company can be only an hour or 2 out of the "premier" tech areas in CA and spend 1/4 of the amount on rent. Why a startup would even think about office space in San Jose or San Diego is totally beyond my comprehension.

    • If it's one thing I've learned from Don Lapre... you don't start a business by buying desks, office space and equipment you might need.

      We live in the computer age. Videoconferencing, e-mail, cvs, IM, Talk, god dammit! Why spend $40,000 for an office? Tell the bastards to stay at home until you turn a profit.
  • Yes, odd indeed (Score:4, Insightful)

    by TheGreenLantern (537864) <thegreenlntrn@yahoo.com> on Friday April 05, 2002 @02:38PM (#3291858) Homepage Journal
    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.
    • 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.

      Well, I always just assumed they were doing custom builds of linux for the embedded market. It's not that much of an intelectual leap. The fact that CT didn't know what they did may very well have stemmed from the fact that he was a moron... (or not intrested at all)
  • If your customers can't figure out what you're trying to do, you are in a world of shit.
  • by Sturm (914)
    "Oddly enough, I'm still not exactly sure what they were trying to do."

    Maybe they weren't either?
  • While the end of the company isn't all that great. Darwin's evolution continues. It seems that this will release quite a few well trained, intelligent people into the job market that have quite a bit of experience. Given that the article also says handhelds were one of their specialities, I'd like to see some linux experts go to work for palm and try to revive it. Not necessarily with a linux OS, but use some aspects of linux to improve the palm OS and make it able to compete with WinCE more readily. Quite a few people agree with me that palm's OS is already superior, but that doesn't make it automatically a winner in the market place.
    • 1) Palm bought all of BE's assets, including the BEOS, which spawned an offshoot that Be was trying to retarget at the embedded market.

      2) Palm is moving to the StrongARM platform for high end units (i.e. corporate apps). I have a Zaurus SL5000D (206Mhz, 32MB of Ram, 16MB Rom) which is a good example of what this architecture can do with a more functional operating system like Wince 2002.

      3) Beos was an incredibly fast OS which ran in a very small footprint, so my guess is Palm will introduce it as PalmOS 6 or 7. When that happens, I'll go buy the Clie clamshell version of it.
  • What they were doing (Score:3, Interesting)

    by fruey (563914) on Friday April 05, 2002 @02:41PM (#3291878) Homepage Journal
    Oddly enough, I'm still not exactly sure what they were trying to do.

    Well, if you read the article right at the end, they made / participated in the Embedded Linux for Sharp PDAs.

    Of course, bad management is what causes bankruptcies like this. 70 staff and only Sharp on the books, with royalties coming in a year later?

    I bet they were all screwing around with cool Linux kernel stuff and forgetting to sell it to anyone as a practical application. Hehe.

    • One of the reasons they didn't succeed IMO is the GPL. There's a reason very few embedded devices run linux. With embedded devices, the hardware isn't that big a deal to develop and make; the software is. A company doesn't want to invest millions to develop a new PDA OS and have to GPL it. Their competition would quickly copy it and they'd loose profits. Embedded devices are predominately BSD, IMHO. BSD doesn't require you to release the source if you don't want to. Companys don't want to release the code, plain and simple.
      • by grahammm (9083)
        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.)
  • by fmaxwell (249001) on Friday April 05, 2002 @02:43PM (#3291895) Homepage Journal
    Ten to twenty years from now, people are going to be shaking their heads in bewilderment about the attempts to make money selling "free software." They will react in much the same way that we do when people mention "New Coke".
    • by fmaxwell (249001)
      Oh no! A negative comment about the business prospects of Linux! Quick, mod it down before anyone can see it!
    • And people will also be wondering how news and community sites gave away everything for free. Maybe the /. subscription isn't that bad.
    • by JordoCrouse (178999) on Friday April 05, 2002 @03:10PM (#3292074) Homepage Journal
      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.
      • Ignoring the childish insult, you seem to think that Lineo is some kind of odd phenomenon in the Linux marketplace. They are not. Every failed Linux-centric company had 'value added' proprietary software that they sold -- either with or without the OS. Stormix (now bankrupt) did. Mandrake does and they've had to start begging for money to keep them afloat. Sure, Lineo did more than just try to sell Embedix -- they also tried to sell tools for a free OS, but the simple fact is that the Linux marketplace has seen one company after another go belly-up.

        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). You'd have better luck getting the average vegetarian to eat a cheeseburger than you would getting the average Linux afficionado to buy expensive development tools.
        • by JordoCrouse (178999)
          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.

          • you can talk all you want, but as they say, the proof's in the pudding..Many software vendors have been _HUGELY_ succesful for other platforms. We have yet to see a single linux company be really succesful. Mind you, I'm not saying it won't or can't happen...but it hasn't yet.
            • In the embedded market look at Axis (www.axis.com) for a successful 'linux' company. Of course, they dont make a big deal of using Linux. They just use it, reap the profits and go on selling *products* rather than hyping a good way to decrease costs.
            • Many software vendors have been _HUGELY_ succesful for other platforms.

              ***

              I don't think we are going to see ANY software companies become HUGELY successful ever again. Why were they that successful? Because they had complete control of their customers. And customers are much smarter these days.

              Here's another question - name a software startup (ANY PLATFORM) after 1999 that was hugely successful.
            • Redhat seems to be doing fine...
        • Actually, there are many, many businesses that have done well selling free software. However, they don't make the news because they are smaller. That's right, Linux puts power in the hands of the small business. And there is nothing wrong with that, nor anything anti-corporate or anti-capitalistic about that, though some would have you think otherwise. Successful Linux companies include:

          Cygnus, before being bought by Red Hat.

          Ada Core Technologies

          Many, many, many local consultants

          Hardware companies (though these tend to not be solely Linux-oriented, you would think that if the Linux options weren't generating profits they would be cut, wouldn't they?)
  • by EraseEraseMe (167638) on Friday April 05, 2002 @02:44PM (#3291896)

    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"

  • by moankey (142715) on Friday April 05, 2002 @02:45PM (#3291907)
    Didnt know there were still companies around that dont have a clear plan a lots of money to throw around. I thought 2001 was the year that all bad and some good companies went down for the count.

    Nothing too surprising or new to read here, just another technology company that was riding the tech boom and investor ignorance.
  • Bankruptcy. (Score:5, Funny)

    by saintlupus (227599) on Friday April 05, 2002 @02:46PM (#3291910) Homepage
    It paints a pretty bleak view of the Linux embedded system company.

    If only they'd changed their focus in time. They could have been a survivor, like VA Ice Cream And Adult Novelties.

    --saint
  • Their stated mission was to be the premier source for Linux-enabled embedded computing in the science and technology sector. We bought a few of their accelerators and let me tell you, they sucked crap off the floor.

    First, the particle reconfiguration matrices were hopelessly complicated to calculate using their UI. Second, the phase-alignment eigenvalues they used as defaults were circa 1974. But worst of all was the induction shielding--we had bitflips left and right including one memorable occasion when we lost a whole night's processing.

    I'm not sorry OR surprised to see them go under.

    • ROTFL! I see some poor moderator got sucked into ranking all that bafflegab as "informative".

      Funny, maybe. But about as informative as trying to learn physics from Star Trek.
  • by BurritoWarrior (90481) on Friday April 05, 2002 @02:48PM (#3291928)
    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?
    • I'm betting that the canopy group was dragging their feet on some promised funding - Lineo management probably expected the money to be there when they printed the checks - Note that canopy agreed very quickly to underwrite the paychecks to avoid labor law violation lawsuits. Why would canopy care if they were wanting to shut Lineo down anyway ?????
    • 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.
    • by penguin_nipple (127025) <dan@nedelko.gmail@com> on Friday April 05, 2002 @03:27PM (#3292193) Homepage Journal
      Cripes. People have bills to pay and families to feed. Doesn't anyone have a shred of decency anymore?

      From my experience I can give a resounding 'no' to that. There is no decency unfortunatley. I was a research devloper at a Canadian University [www.wlu.ca] in the dept. of physics and computing. Our research group is/was a "Center for Excellence" and we developed two fully functional laser simulators of the Quantum Well and VCSEL variety. Things were progressing for 2 years, and the projects both reached decent beta stage.

      Our entire research group was summarily laid of on a lovely friday afternoon at 5:30. No warning, no heads-up, no consideration.

      Personally I was insulted but I can tell you, I am not the first, nor the last that this has happened to...

      Mind you the educational institution referred to here had no problem highlighting our research group and some of my other research projects in glossy fliers in order to attract attention to new students and the general populace.

      Oh the irony of being highlighted in promo material by the marketroids and concurrently bitchslapped by the accounting dept. in one fell swoop.

      • That's what you get for being at work at 5:30 PM on a Friday. If you'd left early to party (like any self-respecting physicist) they'd have had to wait until monday to fire you.

        And would probably have waited until the next friday, to "avoid incidents"; if you had left early then too, and every friday since, I bet you'd still have a job.

        The moral of this story is obvious ( /me looks at watch- one more hour :)
        • hahaha....I'll keep that in mind in the future, but naturally like most people we were given the option to continue working the projects. Unfortunatley there would be no more funding, wonderful pill to swallow when it comes from a guy making in excess of 100K/year.

          Also, since I was a lowly RA, no automatic paycheques into said bank account, had to have time sheets signed with work logs as well....

          I am fairly sure you are glad you don't have my life :)

      • You experience agrees quite well with what I have seen and experienced working in the private sector in the U.S., for example, when I worked for General Motors we always got the "pink slip" notification of indefinite layoff on the last day of our employment. I went through several layoff and recall cycles with that company on those terms.

        What surprises me is that a University would behave like that. In my current job working for the University of Central Florida, I have never seen any faculty laid off without first receiving a one-year "terminal contract". There is always at least a one year warning - much more civilized than the private sector.
        • There is a fairly nasty loophole at my (now former) institution. Research Associates/Assistants are not technically employed by the academic institution, we are hired by the 'supervising' professor. This gives the school a number of bonuses (from their POV) - no benefits for us, labour laws do not apply to us (and this is stated in the Ontario Labour Law guidelines too), no sick leave, no perks of a financial nature.

          This is fairly easy for them to get away with as many of RA's do it for love and fun rather than financial gain (read: we are easy to mess with). I think most institutions might class RA's as 'staff' which would entitle them to normal staff treatment. But as it stands, we are essentially a group with no rights and no benefits. It's for that reason I have decided not to purse it as a 'career' (if you could call it that) any longer and am currently consulting and looking for a (preferably) research job in the private sector.

          I have no idea what may come of it, and I continue to work on my own research at the school (grid, beowulf, distributed computing) but it's my own research , no pay , only for the love of the work.

          Any available positions at the University of Florida? (much nicer climate than waterloo)

          =)

          *sighhhhhh*

    • 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?

      Some companies handle this very well. In early 2001 I was working with RJ Mical at a company called Red Jade [digitalgamedeveloper.com]. We had a decent business model and a good start on a compelling product but launching a new game machine to compete with the GBA is a very expensive and risky proposition. When Ericsson decided to pull the plug and we couldn't find alternate funding due to the dot-com collapse, we had a big company meeting. There was a month's warning before the company officially shut down during which everybody got their expense reports and final paychecks paid and we got severance pay after that in proportion to seniority - I got a month of severance.

      Coming back to pick up my check I found RJ had had some shirts made; they said "I joined a startup and all I got was this lousy T-shirt!" :-)

      It was sad to see the company disappear, but as such things go, it was handled very well.

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

      (This is not an anti-US flame, just an observation...)

      Well, the "hire and fire" business paradigm actually enforces this management style...

      Many industrial nations have laws against this type of abuse and/or effective unions that are well respected and have a real force in protecting workers against this.

      Just look at Europe.

      But whenever Americans are pointed to this, they shake their collective heads and denounce this as modern-day communism...

      But I have to admit that I certainly prefer living under my "oppressive socialist governemt" (quote from an US reader) than in a work environment where I can get a pink slip out of the blue and be told to leave the building within 15 minutes, guided by security guards.

      Things aren't all peachy here, of course. The .com boom and whimper has lead to a union-free zone of media companies that also practiced the "hire and fire" style because they could...
  • Oddly enough, I'm still not exactly sure what they were trying to do.

    Taco still says the same thing about the night he walked in on "those gross naked people"!

    Sorry, it was too easy a softball to leave alone...

  • by toupsie (88295) on Friday April 05, 2002 @02:55PM (#3291979) Homepage
    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.

    • Red Hat, Ximian, and the Kompany all appear to be doing well...
      • From RedHats SEC 10-Q Filing [tenkwizard.com].
        • Gross Profit on Subscription and Services: $40,565,000
        • Total Operating Expenses: $150,509,000
        • Net Loss for 9 month period ending November 2001: $-97,965,000

        That doesn't seem that healthy to me, especially since 1 year ago the net loss was $-62,495,000. And Open Source Services only counted for $13,641,000 of the revenue.

        • However, you have to remember that most of that is "paper-money", not a cash loss.

          When you buy a company for stock, the cost of that transaction is based on the value of the stock when you bought it, and it gets depreciated over a few years. When Red Hat bought Cygnus, it's stock was worth around $300/share. So, for the next several quarters, Red Hat had to expense off that transaction, resulting in a paper (not real) loss. Had Red Hat made the purchase when their stock was worth $10/share, over 100 million of those "expenses" would not have been recorded.
    • 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.

      • 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.

        See, the thing is that the Open Source and Free Software developers don't care that much about your company if you take in BSD-licensed code and sell it closed-source, such as Microsoft and Apple have done. This practice does little benefit the the OS and FS communities, and so these communities see little reason in promoting or helping such companies.

        With companies like RedHat, however, I feel great about paying them money for their RedHat Network service, and providing code for the OS/FS community RedHat participates in, since I know that I'm helping the community in the long run.

        • You'll have to ask yourself the question below from the standpoint of a corporation. This is because you, by yourself, don't matter. There's not enough people in the world that give a fuck about open source software for anyone else to matter, either. And there quite likely will never be. People don't generally think of publicly-traded corporations as charities, and it seems rather unlikely that they ever will.

          That said:

          Would you, the one who must answer to your shareholders and their families and dinnertables, rather feel good about what you're doing for the GPL community and see how long you can tread water, or bring home a few dollars selling BSD?

          • Would you, the one who must answer to your shareholders and their families and dinnertables, rather feel good about what you're doing for the GPL community and see how long you can tread water, or bring home a few dollars selling BSD?

            I'm not trying to say what companies should be doing, but trying to point out that once you start selling proprietary software (e.g., originally BSD-licensed), you will lose community support.

            The reason that we have good, free bazaar-model-developed software is because the code is OS/FS. Once it is 'taken out of the loop', as a community we start losing. Personally, I don't see any benefit for the community writing or promoting BSD-licensed software, unless you don't see anything wrong with things turning non-free.

            • Just ask Indrema, Loki, or VA Whatever. In fact, of the main Linux distributions, Red Hat is way up there in terms of being criticized by the Linux community ("The Microsoft of the Linux world," and other such charges), yet they've been the most prosperous of all of them.

  • As far as I can tell, Canopy invests in companies to piss off Microsoft, and doesn't do much to ensure that the companies it has invested in succeed.

    Maybe I'm wrong, but that's how it seems to me.

  • Capitalize? (Score:3, Funny)

    by alanwj (242317) on Friday April 05, 2002 @02:57PM (#3291990)
    "recapitalized going forward and a new capitalization structure worked out with existing investors."
    So how come the whole quote is in lowercase? Or is lowercase their new capitalization structure?

  • by Anonymous Coward
    It uses Lineo's version of Linux

    As seen here:
    http://story.news.yahoo.com/news?tmpl=story &cid=73 &ncid=73&e=2&u=/zd/20020404/tc_zd/5105778
  • The Lineo [lineo.com] web site is still up, with no indication that they've tanked. Of course, that may just mean that everybody was laid off and there's nobody to update the web site.

    There are a surprising number of dot-coms in that situation. If the web site was outsourced, it can outlive the company by months, until the hosting service gets around to deleting it.

    My old BWUNN [bwunn.com] web site, which was a takeoff on the promotion for the movie "AI", is still up, even though I closed the account with the hosting service long ago, and they stopped billing me. The labor time to flush accounts may be more than the cost of keeping them up until the equipment gets retired.

    Are there co-located servers from dead dot-coms still in place and running? Those might survive, forgotten in some hosting facility, for years. See if you can find any.

  • A revolutionary new program, and it wasn't even written by Microsoft:

    $ spell
    An anonymous reader notd a bit running on
    notd
    $

    How hard can it possibly be?
  • by steevo.com (312621) on Friday April 05, 2002 @03:25PM (#3292171)
    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.
  • by Michael_Jarvis (10688) on Friday April 05, 2002 @03:32PM (#3292219)
    As a former employee of Merinta [linuxdevices.com] (an embedded Linux company that went under in May 2001), I am very sympathetic to the Lineo employees. I guess I was fortunate--at least Merinta never bounced a paycheck, and our CEO (Camillo Martino) gave us a heads-up before we actually ran out of money.

    Linux shows so much promise in the embedded market, but it will never get there until companies wise up and start using sound business practices. I am so sick and tired of seeing companies with great ideas and talented people fail because they have incompetent management with poor spending practices.

    Having millions of dollars in venture capital funding does not mean your company is "successful" or "wealthy". It means you have been trusted with money to make your idea work. Don't go out and blow the money on Aeron chairs, fancy offices and glitzy parties. Spend it wisely, and use it to get your product out the door. When your company is generating REAL revenue and profit, THEN you can consider celebrating.

    Blowing venture capital on stupid things is about the same as maxing out a personal credit card on luxury items in my book. It's just plain stupid.

    I feel so passionately about this issue because I've seen so many companies go under, where the workers suffer because of poor management. Enron is a really big example, but there are hundreds if not thousands of "dot-coms" that did the same thing to their workers.

    I hope TUXIA [tuxia.com] is still doing well, and I hope they learn from the mistakes of others in the marketplace.

  • by Greyfox (87712) on Friday April 05, 2002 @03:53PM (#3292379) Homepage Journal
    Everyone talks about how you should make money with services. Well a few years ago, I set up a guy with a linux based web server and hacked out some scripts to keep 4 modems dialed out and bonded at the same time. Just recently I ran across his E-Mail address and sent him an E-Mail asking him if I'd pissed him off or something since I hadn't heard from him in ages. He told me no, and the machine I set him up with was still running great.

    Having to keep finding new customers is a royal pain in the ass. You're much better off with Windows, where they keep coming back...

    • You have to sign them up for a support contract. You simply tell your customer that for a modest monthly fee you will monitor the machine, make sure the backups are running, etc. You can also throw in a limited number of "free" emergency service hours or whatever it takes to hook them into signing up.

      You then write a cron job that does all of the actual work and sends you an email with a nice report on the overall status of the box. Once a month you forward some of these reports on to your customer along with a little message telling him that everything looks good. You might try to use the information to sell him more hardware or software. Phrases like "disk space is getting low," and "your machine spends a lot of time under heavy load" are very useful for selling these types of added services.

      If you are careful with this kind of customer and don't gouge them, you can guarantee a steady income. And since the amount of work required is fairly low, you can have all sorts of customers, all of them completely convinced that you are the most competent computer expert on the planet.

      If you are selling Windows solutions, on the other hand, you constantly have to worry that one of your competitors will sell him a solution that actually works. Get a reputation as a hack, and then it becomes impossible to find new customers.

      Most small businesspeople have no problems paying for solutions that work. With Linux you can easily undercut your competitors and still make a nice profit.

  • by Restil (31903) on Friday April 05, 2002 @04:02PM (#3292454) Homepage
    They sell, among other things, a full linux compatible embedded system that fits completely on a single simm chip (30 and 72 pin varieties). Along with 10mbps ethernet, there are several I/O lines available for interfacing with the outside world. The systems I have run at 33mhz and use extremely low power as well as a sleep mode that uses even less. Basically, it can easily function off of nothing more than a small solar cell. It only needs something like 70 mA at 3.3 volts, even less if ethernet isn't being used.

    The big problem with its design is, I don't think it scratches a big itch. Its primary useful application is for prototyping. Any company that makes embedded products might want to develop their software using such a device for testing, but if they plan to produce anything remotely resembling significant quantities, they'll lay out their own embedded design to better fit the application at hand.

    Also, except in the tiny portable computer market, extremely low power doesn't make much sense. If the product being developed has no power restrictions tied to it (it gets power from the outlet for instance), then the entire advantage of this device is thrown out the window. I've done an analysis of the chips on their board, and it could be built for 1/4 the price if more power hungry versions were used instead. Also, if this
    device will be primarily used for prototyping, and there IS a market for such devices, there's no reason to make them work off solar cells. As long as they remain compatible with low power models, they'll be just as effective, and a whole lot cheaper in the long run. And if they're less expensive people will purchase a LOT more of them.
    Even the hobby market could support them if only they were priced more reasonably.

    But regardless of all of that, face the fact, Lineo is a legacy dot com company. They spend more money than they have, and it shows.

    -Restil
  • Lineo was trying to sell an embedded linux to a group of people that can roll their own embedded linux distribution with 3 hours of time after lunch. embedded linux from scratch is far from rocket science and is actually more powerful than anyone's pre-packaged setup. I tried lineo, I reid Hard Hat, I tried pico-linux, I tried midori..

    I have better stability, results and faster development with building the whole embedded OS by hand for each project. My projects have a similarity (slackware based filesetup... the only correct filesystem structure) but each is completely custom. from the robot-cam I am chasing the final bugs out of (and to prove to alot of "engineers" at work that you can do amazing things with a 386 + linux that cannot be done with windows) to the amateur rocketry ground control telemetry system I made for the local highschool.. all custom made.

    If I made a product that I was going to market I surely would have never bought lineo or any pay-for product.
    • I just ran out of mod points, sorry.

      The point of free software is you can easily cut out the blood-sucking middle man.

      Power migrates in the direction of the end-user. Lineo tried to be a blood-sucking middle man, just like so many other failed companies.

      It's the big end-users who are willing to say "We can support this ourselves, we don't need third party services" who could provide a niche for GPL'd software. There's not many around just now, they need to wake up and employ a couple of C coders.
  • It's said

    By whom? Microsoft spekeperson for Windows CE, that is trying to pretend to be an embedded system for many years already?

    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."

    There aren't "a lot of embedded engineers" in the whole world -- even though, embedded systems are widespread, designing them is a relatively rare occupation, just like while plastics are everywhere, chemists and companies that develop them aren't that numerous.

  • Lineo wound up owning DR-DOS after the split from Caldera, which just kep the Linux stuff. So what will happen to DR-DOS now? It was always a better DOS than Microsoft's. Here's hoping they turn it loose, along with thier DOS web browser (which, to be honest, was really doggy.)

    It's too bad that Caldera caved in to Microsoft and settled instead of holding their feet to the fire - the DR-DOS suit evidence that was buried by that settlement would have made the antitrust case far stronger than it was anyway...
  • FYI. I just read this article [linuxdevices.com].
    http://www.linuxdevices.com/news/NS4958883656.html
  • Oddly enough, I'm still not exactly sure what they were trying to do.

    WTF? I realize that slashdot editors aren't known for being well-informed, but doesn't it bother anyone else that they seem to be flaunting their ignorance on the front page?

    CT doesn't know what Lineo did. So what? He doesn't own an embedded systems company does he? He wasn't exactly their target market. What Lineo did is quite clear from their website [lineo.com], they were a service company that would help you put Linux on embedded systems.

    So if you designed pda/mp3player/gps/whatever hardware and thought putting Linux on it would be a good idea, you would go to these guys and get them to hook you up for a fee. A couple years later, when you came out with a new model or something else or whatever, you'd go back. It's not that fucking complicated. And the fact that the 'average' slashdotter might not know what they do didn't matter, because they couldn't give a shit about you either.
  • Lineo did something useful; they made a range of perfectly all right "SnapGear [snapgear.com]" embedded-Linux Internet sharing router widgets. Basically, these things can do the same stuff that cheaper non-Linux plastic-box Internet sharers can do, but they have funkier features as well. I reviewed one of the SnapGear boxes here [dansdata.com]; I'm still using it.

    Lineo spun off [lineo.com] their hardware operations late last year, though, so that they could more easily do... uh... whatever it is that they now do.

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