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To: puborectalis who wrote (113637)	9/9/2000 8:33:49 PM
From: puborectalis	Read Replies (1) \| Respond to of 120523

Linux: Red Hat and VA Linux Win Support, Corel Loses Toronto, ONT, September 11 /SHfn/ -- In a move that creates problems for Corel [CORL] [T.COR], a high-powered group of companies have agreed to support a Linux desktop initiative different from the one backed by Corel. The group backing the "Gnome" initiative includes Compaq [CPQ], Hewlett-Packard [HWP], IBM [IBM], Red Hat [RHAT], Sun Microsystems [SUNW] and VA Linux [LNUX]. While the agreement should boost the long-term prospects of Red Hat and VA Linux, it damages Corel's future in the Linux desktop market--a market the company has pegged its future on. Linux fever drove Corel shares to a 52-week high of US$44-1/2 in early December, but like other Linux stocks, it has had a big fall. The fall has been harder for Corel because its shares have failed to recover. After settling in the $3-to-$4 range in May, they closed at $3-55/64 September 5. On the same day, Red Hat closed at $27-3/16 compared to the $15 to $20 area it had settled in during the last half of May. From June to August, VA Linux's share price had spells in the $30 range or lower. VA Linux closed September 5 at $61-1/4. Corel sells desktop software applications like the WordPerfect suite and CorelDraw. It is trying to stake a claim in the Linux market with Linux desktop applications. Red Hat sells a Linux server operating system, Linux software development services and support. VA Linux sells Linux servers as part of a server, operating system and support package. Two previous articles detail which of these companies may have the best short-term and long-term approaches. Major hardware vendor support for the "Gnome" Linux desktop initiative is good for Red Hat and VA Linux because it increases Linux's marketability. Gnome will make developing desktop applications for Linux easier. This makes Linux more attractive as a server operating system. It also makes it easier for Red Hat to sell Linux server operating system software and VA Linux to sell server hardware. The move by Compaq, Hewlett-Packard, IBM and Sun Microsystems to support Gnome spells trouble for Corel since Corel supports the rival KDE Linux desktop initiative. Some of the first information coming after the hardware vendors announced their support is that Sun's StarOffice applications suite will become part of Gnome. This could shut out Corel from any major hardware/software bundling deals with any of the Gnome backers. Hewlett-Packard and Sun will also make Gnome the default desktop environment for their Unix PC shipments. This move is not important because of the size of the Unix PC market, which is negligible, but is important because it illustrates the large hardware vendors' Unix/Linux strategy. The main Unix hardware vendors are developing Linux support so that it will run on top of their Unix versions. In tech speak, Linux binaries will become a standard format for deploying applications to run on Unix. Having such a universal application standard makes gaining a large base of applications developers much easier. The more applications developers and applications there are for Unix, the more marketable it becomes. Right now, Unix is lacking an applications standard and applications. It is mainly for these reasons that Unix has been unable to move outside its heavy duty, back-end data center market. The hardware vendors are trying to put themselves in a position where they can sell Unix servers for more mundane uses, like servers for small office desktops. The problem for the Unix hardware vendors is many customers may decide to simplify things and go all Linux. Actually, it's not so much of a problem for Hewlett-Packard and IBM because they will also ship their servers with Linux as the server operating system. Of the companies mentioned in this article, Red Hat and VA Linux may benefit most from these Unix/Linux shenanigans. The more Linux desktop applications there are, the more marketable Linux is as a server operating system. The more marketable Linux is as a server operating system, the more Linux servers VA Linux can sell and the more Linux server operating system software Red Hat can sell. In the long-run, the big hardware vendors probably don't care whether Unix or Linux wins out, as long as they sell more servers.