Linux-only firms pressed as hardware leaders invade turf

By George Lawton, ITworld.com |  Hardware

San Jose, Calif. -- Will pure-play Linux companies survive in the
face of stepped-up Linux efforts from the likes of IBM and Hewlett-Packard? That key
question was addressed at the LinuxWorld Conference and Expo by a panel of
Linux market executives.

With the consolidation of Linux suppliers under way, the likelihood is high that only a
handful will remain standing five years from now, they agreed. Furthermore, software-
only vendors are not looking kindly upon traditional hardware companies that have only
recently acquired Linux religion, but they could be running scared, too.

"Most of these companies are more hardware than software," said Ransom Love, chief
executive of Caldera Systems. Funded in large part by onetime Novell chairman Ray
Noorda, Caldera, based in Orem, Utah, was among the early software-only Linux companies.

IBM and Sun are "going to sacrifice some things to protect others," Love said. "Having
a pure [software] play is very appealing. You won't get [the same
impression] from IBM or Sun because everyone senses an agenda."

A player for every niche

Yet even companies that concentrate on software conform to a way of doing business
that, in many cases, does not reflect the rapidly evolving Linux marketplace.

"You have to look outside the traditional technology industry because we are turning
the industry on its head," said Bob Young, chief executive of Red Hat in Durham,
N.C. "We cannot use Adobe or Microsoft as an example. A good analogy is the car
industry. You have GM and Ford, but you also have Ferrari and Hummer. You will see well-
run companies earn big returns, [and] there will be equally successful
companies that focus on certain niches."

Although many news stories paint Linux as being in a David vs. Goliath struggle with
Microsoft, "you cannot define business as antibusiness," noted Larry Augustine, chief
executive of VA Linux Systems in Sunnyvale, Calif.

To survive, Linux-only companies must define and market Linux in a positive way, he
said.

In fact, according to Augustine, in the Web server market, Linux, not Microsoft, is the
Goliath. That is in large part due to the popularity of the Linux-enabled Apache Web
server, which enjoys a much greater stronghold than Windows NT.

Going into the future, embedded machines will become the next major growth market,
suggested Volker Wiegand, chief executive of German-based Linux Supplier SuSE Linux
AG. "For every machine we consider a Linux entity today, there are probably 10 devices
we don't even know about such as a microwave, mobile phone, car, or almost anything,"
he said. "The power of Linux is that it can be used in places where no one has gone
before."

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