October 28, 2002

Progeny has a new business plan -- and a new CEO

- By Robin 'Roblimo' Miller -
Progeny is a unique Linux company in a number of ways. First, it is the only one founded by the former head of a major non-profit Linux distribution. Second, it is one of few that is making money. Third, it has thrown off the "distribution" sales model entirely and is moving in an interesting technical and marketing direction. Fourth, it has a new CEO, although founder Ian Murdock, who also founded the Debian project, is still Board Chairman and CTO.

Progeny started out distributing a "wrapper" for Debian. The company's first product was a packaged Linux distribution that had Debian's stability with a user-friendly GUI installer and GUI admin tools added. It was easy to install (although hardware detection was not as polished as Mandrake's or some other distributions') and ran well. But as a product in the marketplace it flopped, in the sense that it didn't make any money.

Free is great, but even a world-class free software advocate like Ian Murdock needs to eat and pay bills, and his coworkers appreciate regular paychecks, so Progeny changed its business model and moved into consulting services, and from there the company has edged into the concept of "Linux as a platform, not as a distribution."

"We're targeting companies that want to use Linux but don't want to get into the Linux distribution business themselves," Ian says.
"We work with them to produce 'Linux-powered' products like appliances and set-top boxes."

This is similar to the "Embedded Linux" approach other companies have been taking for several years. There are now so many of them that there is an entire Web site, LinuxDevices.com, dedicated to them.

But most suppliers of Embedded Linux are still distribution-oriented. Note that MontaVista Software, a respected player in this area, basically offers two products, albeit highly customizable ones. This is a common pattern for companies that are specializing in what could easily be called "Invisible Linux" instead of "Embedded Linux," since the biggest common factor shared by almost all Linux-based appliances and set-top boxes is the fact that their Linuxness is not apparent to end users, who neither know nor care what kind of software is behind the keyboard or touchscreen as long as the thing does its job without fuss.

The problem with the distribution-based embedded approach for appliance and device manufacturers is that Linux distributions, like military uniforms, seem to come in two sizes: Too big and too small. Regarding existing embedded distributions, Ian says, "Typically they've been grabbing Red Hat or whatever, and rewriting to fit, either adding a lot or taking a lot out." And, he points out, "This is an expensive, labor-intensive process."

The Progeny approach is more like the Linux From Scratch concept, where each user -- or in Progeny's case, each corporate client -- ends up with a custom Linux distribution that exactly fits his or her hardware and software needs, except you can't really call it a "distribution" if it's only being used by one person or corporate client, can you?

Progeny uses the phrase, "Linux Platform Technology," to distinguish its offering from the traditional "distribution" concept. "Red Hat is a product, not a platform," Ian says by way of explanation.

In any case, Progeny has been successful at getting both platform development and consulting clients. Paying clients. The company developed HP's Linux Programmer's Toolkit (PTK) and, overall, has a respectable client list for such a small company, especially one based in Indianapolis instead of one of the tech hotbed areas.

Success doesn't get much press

"Far more attention gets paid to the negative side of the Linux business than to positive things that are happening," Ian says. "Lots of people are making money with Linux."

He's not saying it's easy: "You've got to get creative. For the last year it's been survival... keeping the lights on." But he says the effort has been successful, that Progeny "has been making a living. We've been profitable since August, 2001.

"Admittedly, we've been doing well because of the consulting. Now we're moving into this market [the platform service] because of customer demand."

Ian believes there is plenty of room for Progeny to grow. "This is just a beginning for Linux, despite what the press has said over the last year," he says. "The challenge is adapting Linux and Open Source to the world without losing the magic that causes them to be what they are."

But, Ian points out, it is the Linux people who need to do most of the adapting. "Linux needs to adapt to the world, he says. "The world is not going to adapt to it.".

Still, there is more cooperation in the world of Linux business than you might find in other fields. For example, Ian says, "We talk to the Xandros guys all the time." There is no financial or consulting agreement between the two companies, but, Ian says, "We are both examples of people building platforms that the previous generation [of Linux companies] didn't do. We're making Linux accessible to a whole new group of people."

Professional management can help growth

"We're growing. We have the resources to bring in people," Ian says. One of the people he has brought in is a new CEO, Garth Dickey.

"We've always had the technology side covered," Ian says, "and we understand the marketing. What we were lacking was the broader business sense we needed to take all this technology and turn it into a real, vibrant business." He says Garth's job is to "get investment dollars in and make sure we go from point "a" to point "b" in an organized manner."

Ian believes the lack of this kind of methodical management "was a major problem with the first generation of Linux companies," and is a problem he does not want Progeny to have. And, at the same time, he expects to chart new courses while using proven management methods. "Many technologies have failed by trying to apply old ideas to new and interesting things," he warns.

Keeping the Open Source flame burning

The Enabling technologies page on Progeny's Web site offers some of "the company jewels" for free download, and mentions the free software projects Progeny developers help maintain as volunteers. This, to Ian, is an important part of the "Magic" that adapting Linux to the greater world should not cause Linux to lose. After all, Progeny's products are all based on free (GPL) Linux, and Ian himself comes from Debian, the purest of pure major Gnu/Linux projects.

So far the idea seems to be working out. In a business sense, you can't argue with profits and growth. And in the community sense, you can't argue with a continuing effort to give back code and development skills to a variety of Open Source projects.

Hiring and growing -- and answering the phone

Ian says, "I hope this little business becomes a big business." He's putting his money where his mouth is, too. Progeny is actively hiring.

In fact, I talked to a recent Progeny hire when I called to interview Ian by phone for this story, namely Judy Brockman, who said, "I'm new with the company." She does administrative support work now, but, she told me, "I'm hoping to become office manager."

Big deal, right?

What made my contact with Judy -- and Progeny -- unusual was that when I called, she answered the phone!

We're talking an actual human voice, not a recording that said, "Listen carefully. Our menu options have changed to make them even more incomprehensible than they were before."

Judy even found Ian, who wasn't in his office, and stayed on the line until she was sure we were connected.

We hear lots of talk about how the best way to make money with Linux is to offer customization service. Note the word "service." Then the first thing we hear when we call most Linux companies (or almost any tech company) is a recording, and that is not good service. There may be a human on this planet who likes calling a company and being answered by a machine, but I have never met that person.

Ian says, "We try to answer our phones live whenever we can get to them in time."

This may be a silly little detail, but it's details like this that can help a company succeed where others have failed.

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