ALERT!!! Major announcement on tuesday, Microsoft shares will drop like a hot potato.... Intel, Netscape stake
Linux?
By Michael Kanellos
Staff Writer, CNET News.com September 25, 1998, 4:20 p.m. PT
Intel, Netscape, and some venture capital firms are
said to be preparing to announce a deal on
Tuesday under which the companies will take
equity stakes in software vendor Red Hat
Software, which makes a version of the Linux
operating system.
Intel declined comment on the situation, but sources
close to Red Hat said that a deal will be announced
Tuesday. At the moment, terms and conditions are
still being worked out. Red Hat is privately held.
If such a deal goes
through, it would likely
represent a shift in Intel's
relationship with
Microsoft, as well as its
software investment
strategy.
The Linux operating
system, a version of
Unix that has been
gaining ground with
users, is increasingly seen as a competitor to
Windows NT. Investing in Red Hat, a major Linux
proponent, would be interpreted as an overt
competitive threat to Microsoft.
A direct investment also would change how Intel
has worked with operating system software
companies. Generally, Intel provides these
companies technical and marketing support. Intel,
for instance, provides marketing support to Be
Incorporated, maker of the Be OS.
So far, the company has not invested directly in
operating system vendor companies, according to
an Intel spokesman. Most of its equity investments
in software companies have been in application or
content vendors.
Nonetheless, Nathan Brookwood, processor
analyst at Dataquest, did not have information on
any deal, but said it makes sense on a certain level.
Intel is trying to expand its presence in the server
market, which in turn means greater alliances with
Unix vendors.
"Intel is very interested in Linux. It's very popular in
the low-end Web server market and that is a
market that Intel cannot ignore," he said. "Intel
needs to forge other alliances."
Linux was initially released in 1991 when creator
Linus Torvalds was a student at the University of
Helsinki. It has since grown into a Net-based
software phenomenon, with millions of users
counted as converts and countless software
additions submitted to various ad hoc Linux Web
sites for use.
Executives from Intel, Netscape, and Red Hat are
currently scheduled to appear on a panel at
ISPCON in San Jose, California, on Tuesday.
ISPCON is a conference centered around Internet
service providers.
Sean Malone, Intel vice president and director of
marketing, will appear with Marc Andreessen,
executive vice president of Netscape, and Robert
Young, CEO of Red Hat. They will speak on
"Linux and the Open Source Business Model of the
Future."
The convention also will feature a public
demonstration of Linux running on Intel servers.
Intel is an investor in CNET: The Computer
Network, publisher of News.com.
Related news stories
• Business apps for Linux September 24, 1998
• Computing giants backing Linux September 10,
1998
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