Mohan: VA Linux Systems will be a HOT IPO, IMO...
Here is an Aberdeen Group profile of the company...
<<VA Linux Systems, Inc.
1380 Bordeaux Drive
Sunnyvale, CA 94089
(888) LINUX-4-U; (888) 546-8948
www.valinux.com
VA Linux Systems, Inc. - Delivering Linux Solutions
for E-Commerce
Preface
Linux is poised to become more than just a fringe player in corporate computing. Firms employing Linux for print-'n'-file, e-mail, and Web services are offering encouraging reports of the operating system's high reliability, performance, and scalability. There are also firms using clustered Linux systems for computationally intensive tasks on large data sets. Within the Global 2000, Linux is picking up speed, moving forward as a legitimate alternative OS for both server and desktop. Certainly not hurting its chances of deployment is the fact that information systems (IS) departments can significantly cut budgets in the per-server and per-client licensing fees arena by electing this Unix-like OS. Many Unix-trained folk are finding themselves attracted to Linux. The ability to use a Linux system as a development platform for their larger Unix systems is also appealing.
This Profile describes VA Linux Systems (formerly VA Linux Systems), an early entrant into the emerging Linux systems market - and a firm worthy of consideration by any IS shop evaluating Linux-based solutions.
Executive Summary
Since its founding in 1993, VA has focused entirely on Linux-based systems and servers. In the past year, VA has grown from 15 employees to more than 100. Privately held, the firm reports a threefold increase in products shipped during the first quarter of 1999. Also during the first quarter of 1999, VA attracted equity funding from well-known Sequoia Capital and from Intel. Sequoia noted recently that VA has been profitable since its inception.
In April 1999, VA Linux Systems changed its name to VA Linux Systems to emphasize the company's focus on providing enterprisewide Linux solutions. The VA Linux Labs
Division will continue the firm's Linux development efforts, which includes part-icipation in porting Linux to Intel's IA-64 chip; refining a Linux desktop GUI; com-mercializing VA's contributions to Linux; and continuing VA's close relationship with the open source community. As a company, VA Linux Systems is continuing to foster the affinity for VA's systems within the scientific and technical community, and to move VA forward in Web-based e-commerce.
Aberdeen finds that VA is on track to take a leading role in the Linux systems market because of the following:
Possessing long-term Linux systems solutions experience few other
organizations can claim;
Having a seasoned management and engineering team;
Strong ties to the Linux open source development community and a major role in fostering Linux enhancements;
Recognizing the need not only for 24×7 support, but also for on-site Linux support as well as selecting DecisionOne as delivery partner; and
Choosing a well-regarded international high-volume manufacturing partner, and Equity investments from Intel and Sequoia Capital (which backed Yahoo! and Cisco).
IS and business executives owe their enterprises a look at this young Linux firm as they evaluate new means of bringing their enterprises forward cost effectively in this age of proliferating Web-based e-commerce.
All the Right Marks for Long-Term Viability
VA astutely recognized that maintaining its high growth would require additional management and engineering talent. Some of the most notable new management additions include:
Gregg Zehr, Vice President of Engineering: Zehr has more than 20 years' experience managing engineering projects and building development teams, including nine years as Apple's Vice President of Engineering.
Leonard Zubkoff, Chief Technical Officer: Zubkoff was principal member of the technical staff at Oracle Corporation before coming to VA. Prior to joining Oracle, Zubkoff was a principal scientist at Lucid, designing for the Apollo PRISM and IBM POWER architectures.
Daniel Shore, Vice President of Operations: Shore was formerly Director of Operations responsible for several product lines at Philips Consumer Electronics, including management of its Flextronics partnership.
engineering talent has also been added, notably San Mehat, architect of Corel's Linux-based Netwinder thin-client server and desktop; Geoff "Mandrake" Harrison, a key figure in developing the next-generation GUI for Linux; and Mark Vojkovich, a longtime contributor to the Xfree86 Linux windowing system. These individuals have joined the VA Labs Division.
At the Ready - Service, Support, and Consulting Expertise
DecisionOne, an international services firm, works with VA's own service/support call center to ensure VA's Fortune customers timely 24×7 on-site support in North America. VA itself trained DecisionOne's technical personnel on Linux to ensure that these feet-on-the-street folk are well prepared. Plans for the remainder of 1999 include expansion of support and service to the European market. Already strongly regarded for its ability to customize Linux solutions to meet clients needs, VA added more consulting muscle through the acquisition of Electric Lichen. That organization's professional services staff includes cofounder Jim Gleason, president of the New York Linux Users Group. The New York Linux Users Group has been a beacon for financial services firms interested in learning about Linux. Gleason will manage VA's East Coast offices.
Build-to-Order Partnership with Business-to-Business Manufacturer
VA has chosen Flextronics to be its contract-manufacturing arm. Orders will be taken by VA and transmitted as on-line business-to-business transactions to Flextronics, which will then custom-build and test the systems. Already well known for its manufacture of WebTVs, Palm Pilots, and Cisco routers, Flextronics has the international manufacturing capacity and expertise needed to back VA's expected rapid growth curve. Equally important, Flextronics is skilled in delivering product where innovation, time-to-market, and continued cost reduction are key.
Linux.com - A Portal That Aims to Be a Major IS Resource
VA is taking aim at providing a major Linux information resource that hopes to answer general and technical questions about Linux. Distribution-neutral, this site allows IS to inquire about any Linux distributions - Red Hat, SuSE, Debian, Caldera, and Pacific HiTech. Given VA's reputation for tuning and optimizing Linux, Aberdeen expects the "tuning" information being made available to be a major draw.
Leading-Edge Involvement in Port of Linux to Intel's IA-64 Processor
In March 1999, VA announced it had received an equity investment from Intel. Intel also tapped VA as the open source community leader for the IA-64 Linux port. Other Intel development partners on the IA-64 Linux port are HP and SGI. Aberdeen expects the port of Linux to the IA-64 to propel Linux forward in high-end server and workstation markets. Further, Aberdeen expects that, just as VA quickly delivered systems based on the Pentium III Xeon chip, VA will be early to market with IA-64-based Linux solutions.
Product Lines of VA Linux Systems
All of VA's products are Linux-based and use Linux's stability, reliability, and ease-of-customization as key selling points. VA works with its customers, tuning and optimizing the latest version of the Linux kernel for the particular business system needs of firms. Customers can also download, free of charge, the latest custom-configured versions of the Linux kernel. Moreover, customers can elect either the latest version of Red Hat or SuSE Linux installed, tested, and configured for any VA system, in addition to the customized Linux kernel.
VA's current product offerings span the enterprise space - from workstations to mission-critical servers. Offerings and their targeted customer arenas include:
For mission-critical enterprise needs, the VARServer 4100 - 150 GB of disk with an additional 270 GB available via a Mylex eXtremeRAID 1100;
For client-server workgroup needs, the VARServer 3000 and the VARServer 3500 aim to solve the needs of customers with computationally intensive projects;
For Web server needs, the VARServer 500 is available in a compact 2U rackmount case configuration; and
For developer desktop needs, the VARstation 28 is attractive for its low price and the VARstation XMP for strong price-performance. (XMP can be optimized for compute-intensive applications with additional cache.)
Aberdeen Conclusions
As businesses move forward in exploiting the Internet for e-commerce, they need to ensure themselves of best-of-breed solutions for competitive advantage. Linux has proven itself to be a viable alternative OS for the enterprise - reliable, robust, and scalable. With its Linux system lineup, VA is taking direct aim at the customer's need for customized cost-effective solutions. The firm designs its systems with high performance in mind. Already, the firm counts among its customers several high-profile e-commerce endeavors, as well as a growing base with ISPs. Not investigating VA potentially means overlooking a natural springboard for adding Linux to the infrastructure via a customized VA system solution.
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