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Caldera fights it out in the stock market with reverse split

Author: JT Smith

By Steven J. Vaughan-Nichols

Remember when people fought over getting Linux company stock options? Today, it’s the Linux companies fighting to keep their stock prices above water. Caldera, in danger of being delisted by Nasdaq thanks to a stock price lurking around 50 cents a share for months, is taking the radical step today of a reverse stock split. For every four shares of Caldera International, stock owners will now receive one pumped-up share.

Caldera CFO Bob Bench explains, “This will drop our number of outstanding shares from 60 million to 15 million. In theory, the price should go up four times to $2 from 50 cents. Historically, though, a reverse split usually leads to a 25 to 50% drop.” So far, as of noon (US EST) today, the stock (now CALDD instead of CALD on the Nasdaq), has dropped a mere 1%. Still, Caldera needs only to keep its stock price above a dollar to avoid delisting.

It’s essential, Bench says, for Caldera to stay on the Nasdaq rather than go to the pink sheets of the so-called penny stocks. Once there, any stock becomes less attractive to buyers at the national brokerage firms. In addition, stock buyers would no longer be able to use margin accounts — credit — to buy Caldera stock. In short, such companies’ stocks become much less attractive to buyers.

While all the publicly held Linux stocks, including Red Hat and MandrakeSoft, have taken hits in the depressed
, Caldera has faced unique problems by being the one Linux company to also embrace the old Unix-on-Intel business by agreeing to buy SCO’s Unix operations in August 2001.

At first glance, the deal has helped Caldera. SCO’s Unix products — UnixWare (now OpenUnix) and OpenServer — and its professional services division lifted Caldera’s gross revenue from $1 million in the year-ago quarter to almost $18 million in the just reported first quarter. A closer look, though, shows
that the SCO cash flow has declined and that Caldera took a $74 million charge in goodwill and intangible assets from the purchase .

Bill Claybrook, research director for Linux and Unix for the Aberdeen Group, thinks Caldera may be ready to turn the corner. He believes that the SCO merger didn’t go well, but that with some of SCO’s old personnel now gone, “the potential is there for them to get rolling. 2001 was a bad year for everyone. The real question is whether they can take all the stuff in place, and make the jump, but they haven’t made the jump yet.”

While noting that in terms of revenue, Red Hat is doing much better, he also thinks that Caldera isn’t on the same path as Red Hat. “When business people think of Linux they think of Red Hat.”

Dan Kusnetzky, IDC’s vice president for system software research, adds that in Europe, when business people think Linux, they think SuSE. Caldera, though, isn’t about direct and retail Linux sales (Red Hat) or Linux services (SuSE), but about providing business solutions using both Unix and Linux on Intel.

Claybrook also points out that Caldera has a strong reseller channel and an installed base of more than 2 million users working with OpenServer, OpenUnix and OpenLinux. Indeed, in terms of small to medium business (SMB) users, Caldera’s Unix operating systems are probably still more widely used than any individual Linux brand.

Unfortunately for Caldera’s growth, that installed base doesn’t want to move from their existing systems. Kusnetzky observes that OpenServer, a mid-’90s vintage Unix-on-Intel system that SCO tried and failed to retire, still sells more copies than OpenUnix and OpenLinux. Kusnetzky even says that the urban legends of OpenServer boxes being drywalled in closets because no one realized that there was a working server in them are literally true. OpenServer costs little, requires minimal maintenance, and can run for years without a glance. It, Kusnetzky explains, is the operating system for people who instead of boasting about their server’s hot new features, boast about having paid a few thousand dollars for a server seven years ago and never having had to spend a penny since.

Thus, one challenge for Caldera is to find compelling reasons for their old SCO users and
resellers to buy new products. Claybrook says, “For Caldera to make money, their buyers need to want to switch from OpenServer to OpenLinux.”

That’s not going to be easy. Kusnetzky says that the Unix-on-Intel business has “seen a dramatic decline. SCO’s [previous ownership] saw grosses of $110 million. The majority of that was Unix system software, training, clustering, and development tools.” Now, the most recent quarter has declined to $60 million. This, he says with understatement, is “not the sign of a healthy business.” He goes on to say that while “we can’t prove a direct relationship, but it seems that Unix-on-Intel users move to Linux with other vendors.”

Kusnetzky adds that while “Unix-on-Intel scales up, most of Caldera’s SMB customers don’t want to scale up on Intel. They want small servers. Many of Caldera’s old SCO business customers can run 40 to 50 users with point-of-sales systems or other terminal based programs on old 486s.” For them, “Pentiums are overkill.” Thus, the multiple processor and other enterprise features of OpenUnix and high-end Linux really don’t interest these customers.

On the plus side, Claybrook says that “their staff is very good” and that the Volution line of network and system management tools are excellent. To him, moving Volution on the marketplace and making Caldera a brand for inexpensive, effective business computing is vital.

Kusnetzky agrees, saying that Caldera has “great products, and great people, they’re just not doing a good job of selling that to people. The power in their existing systems is amazing, at a cost per user that’s much less than a Windows-based solution and have real savings at staffing and help desk costs.” It may not as exciting, but “server-centric computing is cheaper” and Caldera needs to get the word out. He doesn’t think that Caldera’s reseller channel is helping the company do that.

Bench says that Caldera is aware of the issues and working on them. Caldera, however, still strongly believes in its reseller channel and has recently been working to improve it.

In addition, he says Caldera is working with partners on creating new business
applications that can deliver a complete business solution based on OpenUnix or OpenLinux to customers. An early example of this is its Caldera Volution Messaging Server, which is based on Postfix, OpenLDAP and
OpenSSL. These new turnkey business solutions will be sold through its reseller partners.

Bench goes on, “Caldera has been working on tactical plan to move forward and we’ve just completed some very extensive planning sessions. The specifics of this plan will be released in a few weeks.” One major part of that plan will be to produce products and services that will bring Web services to the company’s SMB customers. “These products will require vertical solution providers and VARs to put that solution together and will enable users to move from legacy applications to Web enabled applications.” From where he sits, “vertical integrators and VARs are our competitive advantage.”

Another part of Caldera’s vision is to “build a bridge for all of our customers with the old SCO projects. So that when they are ready to change, the bridge will be there to enable them to move up seamlessly.” At the same time, though, “we’ll continue to support you where you are.” Of course, Caldera hopes that its new Volution products and Web service lines will finally tempt its existing customers to cross that bridge and persuade new value-conscious SMB customers to give the Caldera Linux and Linux-enabled Unix lines a try.

Can Caldera survive to make these plans come through? Stock price or no, Bench says that Caldera actually plans to grow and acquire other companies this year. In part, Bench can make such plans with a straight face because the Canopy Group, with Novell founder and multi- millionaire Ray Noorda, still remains a firm Caldera stockowner and supporter. Claybrook and Kusnetzky also think that Caldera can make it, but that time is running out, and that Caldera must turn the corner by the end of 2002.

Privacy software makes post 9-11 comeback

Author: JT Smith

The Register reports that privacy software is becoming more popular. ”
Zero Knowledge Systems has added a low-cost surfing plug-in for Windows Internet Explorer that lets you bypass much of the junk that online advertisers and spammers use to build up user profiles. WebSecure costs $49.95 and it works by encrypting and rerouting traffic through ZKS’ proxy servers.


  • Programming

Dvorak: Is Linux your next OS?

Author: JT Smith

I. Valdes writes, “No less a personage than John Dvorak has weighed in (on PCmag.com) on the near future of Linux: ‘…Unfortunately, the Linux community spends too much of its energy on things such as nomenclature (like the name GNU/Linux versus Linux). I sense that Linux is at a crossroads of becoming very important or becoming a footnote in desktop OS history. Right now, I’m banking on it becoming very important ? and I mean on the desktop.’ “


  • Linux

Lots of Linux at Embedded Systems Conference 2002

Author: JT Smith

Anonymous Reader writes, “LinuxDevices.com has published their weekly newsletter of the latest goings on in the Embedded Linux market. It features a comprehensive roundup of many announcements from this week’s Embedded Systems Conference in San Francisco, CA. Read it here.


  • Linux

Desktop Linux: The time has come

Author: JT Smith

Anonymous Reader writes, “There are many who find it puzzling that desktop Linux has not garnered as much
market share as it so obviously deserves. There is so very little that organizat
ions cannot do with Linux, existing open source software, and
commercial software running on Linux; and with the prospect of enormous costs sa
vings it is remarkable that there are not more adopters of the platform.” Read the article at Mlug.ca.


  • Linux

Preferential treatment in distribution model not new

Author: JT Smith

Anonymous Reader writes: “Whatisnew.com has posted Preferential Treatment In Distribution Model Not New. It asserts that Apple imac distribution problem extends beyond Apple, and even impacts Linux.”


  • Linux

Open Clustering & Scyld Computing Corporation announce partnership

Author: JT Smith

James Chivers writes: “Surrey, UK, 14th March 2002 – Open Clustering and Scyld Computing Corporation announce partnership, and Open Clustering becomes a member of the Scyld Authorised Vendor program.”

High-performance cluster deployments from Open Clustering will feature pre-integrated, supported hardware systems installed and configured with Scyld Beowulf Professional Edition. Additionally, Open Clustering will offer a variety of Scyld technical support packages and training to clients of their high-performance cluster products.

Scyld Computing Corporation develops and supports software for high-performance computing. Their Scyld Beowulf software is the next generation in high performance computing cluster operating systems. It provides simplified cluster integration and setup, minimal administration, and seamless scalability. It also fills the need for a stable, standard, supported platform for the deployment of advanced clustering applications. CTO, Don Becker, technical leader of original Beowulf project team at NASA, states, “We are excited to be working with Open Clustering. The combination of the Scyld Beowulf with Open Clustering’s products along with the support of both of our technical teams will provide a very powerful, high quality solution to meet the needs of commercial users.”

“Our intention for Open Clustering has always been to offer an unrivalled array of solid enterprise platforms. Coupled with Scyld’s professional backup and support, our client’s have a direct line to knowledgeable engineers and into the heart of the team who develop the Beowulf product.”, announced Mr James Chivers, Open Clustering’s CTO, “Our clients demand a very high level of professional cluster installation, customisation and training – our partnership with Scyld will enable Open Clustering to fulfill these demands.”

Open Clustering’s flagship product – the Samurai Blade Server – is fully tested and certified as 100% Professional Beowulf compatible – ensuring that clients receive a stable, reliable and high-performance enterprise level platform.

Open Clustering URL: http://www.openclustering.com

Project Liberty is coming; Sun’s answer to Passport?

Author: JT Smith

bryam writes: “Sun releases SunOne platform for network identity; read it at Yahoo!. One of the first initiatives related to Project Liberty.

‘Network identity solutions help enterprises manage and control their most vital assets — identities. These identities can be customers, employees, partners and equipment and with the Sun ONE solution, productivity and secure access are controlled via a single sign-on. The Sun ONE identity system facilitates open, secure authorization and authentication services, streamlining access and increasing productivity. Managing network identities allows organizations to build stronger, more tailored relationships and services — built to widely different levels of security, including capabilities such as biometrics, depending upon requirements.'”


  • Programming

The Linux Virus-Writing HOWTO

Author: JT Smith

Teledynamics Communications reports on the preliminary release of a Virus Writing HOWTO for Linux and the Linux Documentation Project’s ethical dilemna in posting it.


  • Linux

Realtor group houses all kinds of Open Source projects

Author: JT Smith

By Daniel P. Dern

The more than 800,000 real estate professionals who constitute the membership of the
National Association of Realtors — the largest trade association in the United States — and the tens of millions of commercial and residential customers they serve probably won’t realize it, but many
will soon be benefiting from Open Source software, thanks to projects being done
by the NAR’s Center for Realtor Technology.

Intriguingly, many of the center’s projects involve Open Source software other than Linux and some,
although they contain or are code, are intended as reference standards rather
than as off-the-(virtual)-shelf software. NewsForge first reported on one of the center’s projects, a “real estate office-in-a-box” project, promoted during a Linux trade show in November.

Founded in August 2001, the center’s goals include “advocacy, implementation
and information,” according to Mark Lesswing, center v.p. “The NAR wanted
a section to hold up the technical side of real estate.”

Implementing ideas

“Advocacy” includes suggesting vendors that implement
features based on their usefulness to the NAR’s membership, rather than marketing
features easiest for vendors to implement, as well as encouraging members to make greater use of technology. “Information” includes surveying members, offering opinions on technology directions, and reviewing products from new and smaller vendors such as Sharp’s Zaurus Linux PDA and Danger Inc.’s HipTop “convergence” device.

“Implementation” is where Lesswing, along with strategic architects
Aubrey Jackson and Keith Garner, plus developer and system administrator Ian Smith and others come in, as do the Open Source initiatives.

The NAR has a mandate that agents should be able to download listings
off the Multiple Listing Service. RETS, the Real Estate Transaction Spec, defines the XML database for these transactions. However, that’s simply a standard; users need
actual implementations.

The center is not directly in the business of creating software;
that role is served by software developers, system vendors, integrators and other
parties. “We provide reference implementations of features for use by our members
and by the vendor community,” states Lesswing. “We look at new feature sets and
new business models, and provide a reference implementation — our goal is to
make these production-quality.”

For example, Lesswing explains, “When we began looking at RETS projects,
only a few vendors’ implementations conformed to the spec. This meant they couldn’t interoperate, because different vendors hadn’t implemented the spec properly or had been selective about what parts of the spec they would support. There’s no compliance testing within the RETS community.

“The center’s RETS project gives developers and vendors a reference
implementation, so they can know how to conform to the spec. It helps the vertical
industry — Realtors — if its vendors all do it correctly.”

Helping to create working software

These reference implementations are working software.
RETS is an Open Source XML project done completely in Java, for both Windows and Unix/Linux platforms.

“The standard is already defined, we’re doing code that implements it,
as a service to the vertical,” says Lesswing. “We’re using the Open Source
perspective to speed adoption of the (RETS) standard. The RETS server is in Java, and will run almost anywhere Java will run, and the client side is in PHP; we’ve tested it in Apache and IIS.”

Garner says that on top of the RETS projects, some per-Realtor or per-brokerage customization might be needed, “like branding graphics, or adding more look and feel.”

Jackson says the projects are intended to be demonstrations. “There may be things you
decide you have to change to make it work the way you want, or features you want to add.”

The Open Source angle

And that’s where Open Source comes into play. “All the code we do is available on an Open Source basis,” says Lesswing. “By making the code freely available, we believe we can help speed adoption of the standards, reduce the total cost of systems, and make it possible for systems to be created faster.”

The center’s efforts are being made available under a variety of Open Source
licenses. “The specific type of Open Source license depends on the project,”
Garner says.

Most are released under the GNU General Public License
or the GNU Lesser General Public License. One exception is the DMT Utility, an SQL parser. “It’s kind of a translator, it’s really handy, and we don’t think everyone should have to reinvent it, because it’s hard to do right,” says Garner. “So we’re going to do it under the
BSD License,
so if people want to they can just incorporate it into commercial apps.”

In addition to RETS, the center currently has several other
projects in various stages of development or deployment, most of which are
listed on their site’s
project area

  • RCCG, the
    Realtor-Client Communication Gateway,
    also listed on freshmeat. Written in Java, this Web-based system lets real estate agents and their clients talk online about real estate

  • eXML,
    an environment for exchanging information based on XML. According to Lesswing,

    “eXML is a reference implementation of socket-based communications — it does
    HTTP 1, 1.1, will stream out straight binaries, XML, etc. We use eXML to
    implement our RETS server, RETS will run as an eXML module.”

    eXML is written in Java. Its front end is written in PHP, and, according to
    Lesswing, can run on Apache or IIS — including Apache running on Windows 2000,
    98 or XP (as well as, of course, Linux).

  • VisualKeeper
    , an image management system intended primarily for large
    brokerages to centralize images or multiple listing services that manage images as a business. VisualKeeper is written in PHP.

The group has also created a variety of tools, using Open Source, to help
developers work to the RETS standard, including
DMT, written in C++, and DSNC, written in Python.

Garner, along with independent developer
Dave Dribin,
is working on a virtual mail server system that’s
about to be posted; most of the coding is done, and the two are wrapping up

“We’re using Open Source technology, including PostFix, Open LDAP,
and Courier IMAP to set up an entire email system, using the
LDAP database as the back end,” explains Dribin. “It’ll run on Red Hat or any other
Linux/Unix, and we’ll be writing a Java administrative front end, which
will also be Open Source.”

Included is a how-to document, Lesswing says. “We’ll release it
soon, and install it at a service provider to show. There are at least five
state-level realtor organizations who have expressed interest in this.”

Controlling information locally

Currently, real estate information services are highly centralized,
says Lesswing. Jackson is looking into the impact
of peer-to-peer technology such as Sun’s JXTA framework for the real estate industry.

“I’m looking at allowing people to keep their info local and operate
at the edges of the network, share info in a P2P fashion,” Jackson says.
“Realtors like to keep their info local, feel more comfortable
having control over all their information.”

“As you go to an aggregated model, the cost of support gets almost
prohibitive if members have to support it,” adds Lesswing. “An
aggregated site might have to rely on ad revenue,
which isn’t working these days.”

By contrast, notes Jackson, “you can now buy server-grade machines
for five hundred dollars.” Implementing these in a P2P fashion
“will allow people to keep control over their data, and do their
business the way they’re used to doing it.”

Smith is pursuing similar research in the area of Web services —
how initiatives like .NET, Mono, or Sun’s Web services for Java
can be of use to the real estate community.

“We want to hone that down, on paper, and put sample services up,
so vendors who want to produce for our vertical market have a place to
start,” Smith says. “This approach allows the community to rapidly gauge the impact
of the technology.”

Ultimate goal: Saving money

In addition to the seven people directly in Lesswing’s group in the
Center for Realtor Technology, the center combines the work of other Open
Source programmers at the state and local levels, he says. About 35 people are contributing.

“It’s a different use of Open Source,” Lesswing adds.
“We use it as a driver for our vertical market segment, to help our members.”

The ultimate goal of the center’s projects
“are to help realtors do their business — faster and more
efficiently — while not changing the way they do their business,”
Garner says. “For example, if you’re selling, you an find out
almost instantly find out ‘how much are other homes like mine
selling for’ or ‘what could I buy for $20,000 more.’
And as realtors adopt products like the HipTop, we can let them
be on the instant-messaging system of their choice.

“And because it’s Open Source, somebody can change it, build on
top of it, using a consultant if they need to,” Garner adds.

One immediate benefit to real estate brokers will be clearer — and in many cases,
significantly lower — prices. According to Lesswing,
the range of cost for implementations of IDX, the Internet Data eXchange,
were running anywhere from $5,000, for a Linux box with MySQL and Apache,
to a complete redo of multiple listing systems for $500,000. “We’re helping educate the [multiple listing] service providers on how much it should cost to provide things, and give them examples of good implementations.”

The center is shifting the cost from software to education, Garner says.
“The cost is somebody’s time to learn to set up and maintain the technologies —
it’s the cost of education, not software, anymore. Plus, you can use
smaller computers. There’s no need to spend, say, $70,000 from a vendor just to
get something that works. You may have to work a little harder, but
it’ll cost much less.”

Typically, he estimates, for a listing service serving 15,000 Realtors,
“if a new vendors wants to put Web services up, they’ll say to get
four to eight new machines as servers. You probably
don’t need that, but if you’re the CEO, you go along with
what the vendors say, because before our center was there,
there was no place to turn for a reality check.

“We’re making the vendors do more,” concludes Garner. “One Realtor said that we did in six weeks what they’ve been asking a vendor to do for the past three years.”

NewsForge.com contributing editor Daniel P. Dern is a
freelance technology writer. Most recently he was executive editor of Byte.com.
His Web site is www.dern.com.


  • Open Source