Watch out. The Penguin is storming Ottawa.
ottawacitizen.com
Investor interest in new stock issues
bearing the scent of Linux will put the
spotlight on at least five Ottawa-area
companies in the near future. Bert Hill
reports.
Bert Hill
The Ottawa Citizen - December 11, 1999
Watch out. The Penguin is
storming Ottawa.
At least five companies are
developing products based on
the Linux operating system that
has galvanized world stock
markets in the past month.
And at least one, Rebel.com Inc.
plans to go public by next March.
And yesterday's 24-per-cent
drop in Corel Corp.'s share
price is not expected to slow the
action.
The penguin is the marketing
symbol for Linux, an
open-source operating system
widely seen as challenging
Microsoft's domination of
desktop computer operating
systems.
The local companies are
working on Linux-based
products for office computers
and for future information
appliances.
Rebel.com Inc. has sold more
than 1,000 small-office
computer systems based on
Linux.
"We're trying not to get
distracted by all the Linux hype,
though it's hard not to notice
what has happened to our competitors' stock," Rebel's president,
Michael Mansfield, said yesterday. Investors' demand for stock has
exploded for new issues of companies that compete with Rebel in
the server market based on Linux. Servers are central office
computers that handle internal networks and external traffic to the
Internet.
Rebel originally planned to go public next summer but now hopes
to meet stock market regulatory standards quicker.
Shares of Cobalt Networks Inc. jumped six times on issue in early
November to reach $128 U.S., giving the California-based
company a market capitalization of $3.5 billion. The stock was
trading at $135 yesterday.
And VA Linux Systems, also of California, did even better this
week when its stock jumped eight time on issue to reach $239
U.S., giving the company a market capitalization of $9.5 billion.
"We're just as excited about the response we're getting from
customers and markets around the world," said Mr. Mansfield.
"We're getting great results in independent lab tests against our
competitors' products."
Corel Corp. owns 25 per cent of Rebel. Corel stock has jumped
500 per cent this year on the strength of a new Linux operating
system that is integrated with Corel and Windows applications.
"Ottawa is definitely the Linux capital of the world," Corel Corp.
chief executive Michael Cowpland said yesterday. "We've got
more companies making real sales involving Linux than just about
anywhere else."
Yesterday, Rebel announced an alliance with Linmor Technologies,
a tiny Bells Corners networking company whose shares jumped
more than 500 per cent this week after it announced it had adapted
its network management software to work on the Linux operating
system.
Rebel and Linmor said they will work on products that help
telecommunications and Internet service providers using Linux.
Both Corel and Linmor stocks fell yesterday as investors tempered
the Linux frenzy. Corel fell $13.95 or 24 per cent to close at $44.
Linmor fell back 48 cents or 19 per cent to $2.
Corel was the heaviest-traded stock on Nasdaq, with 47 million
shares changing hands. It was also the third- biggest loser on a
percentage basis.
Mr. Cowpland said, "Our stock is very volatile because we are a
favorite of day traders."
Despite the correction, both stocks had great weeks: Corel rose
85 per cent and Linmor 440 per cent.
OE/ONE.com, a new company led by Eid Eid, former chief
technology vice-president at Corel, expects to announce new
financing and product plans early in the new year.
Mr. Eid and a group of developers have been working for six
months on a new "operating environment" that will be sandwiched
between Linux and a future generation of devices ranging from
handheld organizers and e-mail readers to television set-top boxes
and personal computers.
"We plan to make it as easy as possible for consumers to use the
Internet for entertainment, information and communication," Mr. Eid
said.
"There will be no opening screen to get through. Customers will
operate products using our operating environment as easily as they
run a (Sony) Playstation (video game machine)."
Mr. Eid started working on his new company, which will be based
in Hull, six months before the Linux wave hit.
"We could see two years ago at Corel Computer (a company that
was folded into Rebel) that Linux was the breath of fresh air the
industry needed," Mr. Eid said.
"It is robust and reliable and its provides more opportunities than
working with proprietary systems like Windows CE (a variation on
Windows aimed at small computing devices)."
The other local players in the Linux market are Newlix Corp., which
is writing software for Linux-powered servers, and the Puffin Group,
which is developing Linux software for high-end Hewlett Packard
servers.
Newlix Corp. founders Jean-Serge Gagnon and John Hansen hope
to enter the Linux market through a royalty deal with IPC Direct, a
major Canadian manufacturer of low-priced personal computers.
At the Puffin Group, Christopher Beard and Alex deVries
announced earlier this year that they are working on a Linux
operating system for Hewlett-Packard processors that drive
high-powered workstations used by engineers.
Linux's development was begun in 1991 by Finnish computer
programming student Linus Torvalds.
Mr. Torvalds made the program and the underlying source code
freely available over the Internet, challenging other programmers to
attempt to make it better.
Dataquest, a U.S. research firm, estimates that sales of network
appliances to small businesses will reach $1.6 billion U.S. in 2003
-- up from $200 million U.S. this year. |
