Business News

UK Says Linux is Viable

The United Kingdom's Office of Government Commerce (OGC) released a report stating that Linux and other open source systems were "viable products" and concluding that organizations that adopt open source software could "generate significant savings." The report, which could lead the way to UK government departments adopting Linux, was based on several open source pilot projects in government offices and other public sector organizations. The study found that the cost savings with open source were significant, and that the complications sometimes associated with open source, such as interoperability, were not as significant as one would expect. Security problems, according to the study, were less severe in open source systems than in proprietary products. Soon after the final study was released to the public, silicon.com reported that the original study by the Office of Government Commerce was even more supportive of open source, but that a final version of the report muted some of the praise of Linux. Reasons for the change are not known http://www.ogc.gov.uk/index.asp?docid=2190

The Total Cost of Ballmer

Microsoft CEO Steve Ballmer stirred up a skirmish with open source advocates recently when he sent a letter to customers outlining the reasons why he thinks Windows has better performance and a "lower cost of ownership" than Linux. Ballmer wrote "It is pretty clear that the facts show that Windows provides a lower total cost of ownership than Linux, the number of security vulnerabilities is lower than Windows, and Windows' responsiveness on security is better than Linux." He added that "Microsoft provides uncapped IP (intellectual property) indemnification of their products." The open source blogs and forums quickly lit up with responses enumerating the shortcomings of Ballmer's statement on open source. Novell posted an official letter of response to Ballmer's letter. The Novell letter states that Ballmer selectively omitted important passages in the Yankee Group study on cost of ownership he quotes in his message. On the performance end, Novell points out that the "file service" bench mark touted by Ballmer uses Windows protocols only and forces the Linux computer to emulate a Windows system with Samba. The UK's OCG report (see above) appeared soon after Ballmer's message, adding yet another chapter in the endless TCO story. http://www.microsoft.com http://www.novell.com http://www.microsoft.com/mscorp/execmail http://www.novell.com/linux/truth/response.html

Where Are They Now?

Who remembers the dot com bubble? When the bubble finally burst three years ago, many investors who used to be rich started to wonder what had become of their wealth. Some, in fact, were angry enough to sue. A total of 310 class actions suits have been filed under the US 1993 Securities Act by investors angry about IPO activities of the dot com era. For economies of scale, the cases were all placed in the Southern District of New York, and six were chosen as "focus cases" that would provide a legal foundation for the rest. According to a report in Linux Business Week, one of those focus cases is the case of VA Linux Systems, Inc. VA Linux was a popular Linux distribution from the early days that went public and quickly set a record for one of the greatest opening days in IPO history. Unfortunately, no one knew how to make money with Linux at the time. VA dabbled in various hardware and software enterprises, but they never matched the glory of those first days. The price of a share reportedly dropped from a high of US$ 300 to US$ 1.96. As you might guess, it is difficult for an investor to acheive satisfaction in the courts by suing a company that just went from US$ 300 per share to US$ 1.96. Like most of the IPO cases, this suit is actually against the investment banks that set up the transactions and prepared the IPO documents. The banks are accused of providing misleading information and earning inflated commissions. Judge Shira Scheindlin certified the VA Linux suite as a class action. Of course, we all knew the party was over, but nevertheless, the result of this great dot com cleanup could bring on still more changes in the way investment bankers present startup companies to stock investors. http://www.linuxbusinessweek.com/story/46801.htm

Open Source Advocates Launch Campaign

A group of open source companies recently launched the NoSoftwarePatents (NSP) campaign. The goal of the campaign is to stop the directive before the European Union Council of Ministers that would legalize software patents in Europe. In fact, the directive would cover all forms of computer-based inventions, including hardware, software, and other forms of so-called "intellectual property." Many members of the open source community fear the broad provisions of the directive would stifle competition and restrict the growth and development of open source. NSP is an international organization that launched the campaign in 12 languages. Participants include Red Hat, MySQL, and the software and service provider 1&1 Internet. The group will work in partnership with other open source advocacy groups, http://www.nosoftwarepatents.org/en/m/intro/index.html

Adobe Goes Open Source

CNET reports that Adobe Systems, a software vendor known for high-profile, commercial applications such as Photoshop and Acrobat, is quietly preparing to become more involved with Linux. According to the story in CNET, Adobe is preparing to hire a director of Linux market development who will "identify and develop strategies for Adobe in the Linux and open source desktop market." The company is also apparently looking for a senior computer scientist who will "become maintainer and/or architect for one or more Adobe-sponsored open-source projects." Adobe has also joined the Open Source Development Labs (OSDL). Some industry analysts expressed surprise that Adobe would be interested in open source, since Adobe's products command a higher price in the Windows and Mac environments than they could ever get in Linux. (In fact, several of their flagship tools have effectively been cloned by freeware open source equivalents.) These recent actions by Adobe perhaps confirm that open source is here to stay, and any company who is defending a market position had better find a way to get involved. http://news.com.com/2100-7344_3-5435397.html