To all - text of WSJ article about Linux and Red Hat.
August 9, 1999
Red Hat Initial Offering to Test
Linux's Appeal as Investment
By LEE GOMES
Staff Reporter of THE WALL STREET JOURNAL
The free Linux operating system continues to gain popularity, with tens of
thousands of fans due at a major trade show this week and with investors able
to evaluate Linux as an investment for the first time.
The highlight of the week for Linux is expected to be the initial public offering,
possibly Tuesday, of Red Hat Inc., which is trying to profit from Linux by
offering its own distribution of the software along with service and support.
But analysts say the success or failure of the Red Hat offering isn't likely to
affect the overall phenomenon, which transcends any single company.
Indeed, such computer-industry stalwarts as
International Business Machines Corp.,
Hewlett-Packard Co., Intel Corp. and Silicon
Graphics Inc., among many others, are making
increasingly substantial bets on Linux, and most
are making Linux-related announcements this
week.
The twice-a-year show, which starts Tuesday in
San Jose, Calif., was first held in March, and has
become the occasion when the state of the Linux
movement is assessed, much as occurs every
year with Comdex and PCs. One sign of Linux's
continued surge is that the exhibition has already
outgrown the San Jose facility where it was born
and will be held next spring in the Jacob Javits
Convention Center in New York and in late
summer of next year in the Moscone Center in
San Francisco.
Collaboration With Big Concerns
Linux is overseen by Linus Torvalds, a Finland-born programmer who
oversees a global network of volunteer programmers. During the last six
months, many of those programmers began collaborating with big companies.
But the friction that some people had predicted would occur when idealistic
programmers met profit-minded companies never materialized, notes Dwight
Davis, an analyst with Summit Strategies, a Boston consulting operation.
Another difference from six months ago is that in the interim, Linux has drawn
considerable attention from Microsoft Corp., sometimes to its detriment.
Because Linux zealots had always taken the technical superiority of their
product as a matter of faith, they were stung when Microsoft in April released
tests showing that Windows NT was faster than Linux on several key tasks.
Linux boosters cried foul and alleged the tests had been rigged, but when
Microsoft reran them to meet those objections, the results were similar.
Linux fans now say that while, in retrospect, the episode evidenced a certain
amount of denial on their part, the results were for the better. "There is a
tendency to be myopic, and a lot of Linux people had gotten complacent," said
Larry M. Augustin, chief executive of VA Linux Systems Inc., which makes
Linux-based hardware. "But no one in the Linux world wants to finish second,
and so there has been some renewed energy lately."
Mr. Torvalds has continued to work on his main interest, the deep internals of
the operating system, known as the "kernel," which while hidden from average
users determine the software's speed and stability. Other companies are
working to fill in pieces of Linux that are missing. For example, TurboLinux
Inc. of San Francisco is releasing a product that allows users to create a single
powerful computer out of smaller Linux PCs; companies including Federal
Express Corp. are currently evaluating the product.
Web and 'Appliance' Roles
Linux is most popular on Internet sites; indeed, the Internet Operating System
Counter, a Web site, reports that Linux runs the biggest percentage of Web
servers, 31%, compared with 24% for Windows and 17% for Sun
Microsystems' Solaris, its closest rivals. While many of the Linux sites are
smaller ones, Linux is the only major operating system whose share is
increasing, the survey showed.
While some die-hards talk about Linux one day displacing Microsoft, most
people say that the software has a smaller but still crucial role, notably on the
Internet and in a new breed of specialized "appliance" computers.
"Linux is definitely here to stay," said Wayne Caccamo, who coordinates Linux
efforts at Hewlett-Packard. "But the Linux industry has to be realistic and learn
to crawl before it learns to run."
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