– By Steven J. Vaughan-Nichols –

After Caldera’s four-to-one stock buy back, it looked like the company was
out of its financial woods. That hasn’t proven to be the case, but CEO Ransom Love remains optimistic about sales of the company’s Linux and Unix systems, even though Utah company now reports that its revenue will only be in the range of $15.1 million to $15.5 million for the second quarter instead of $16 million to $18 million it originally expected.
Because of this, Caldera has announced more layoffs. Caldera will lose about 73 employees across the board and around the world. The company will be left with about 400 employees and a cost savings of approximately $7
million a year. While all locations will be hit, Caldera will be
closing its Chelmsford, Massachusetts, and Erlangen, Germany, offices.
Its other two German offices will remain open.

The company doesn’t plan to cut back on any services or product lines; instead, it’ll make do with fewer people.

Additionally, CTO Drew Spencer and chief legal counsel Harrison
Colter are leaving the company. Both men will continue to consult
for Caldera on a part-time basis. Opinder Bawa, Caldera’s IT v.p., will
take over the bulk of Spencer’s duties, while Colter will continue to
manage Caldera’s legal work as an outside counsel.

While unhappy to be losing people, Love remains upbeat.
“It hurts, but the worldwide IT market, especially in Europe, made
this a necessary step to protect shareholder value in Caldera.” That said, Love continues, “People are continuing to deploy business systems with both Unix and Linux.”

But Alan Gillen, IDC’s research manager for systems software, counters: “The Unix-on-Intel market, which makes up 90% of Caldera’s
business, has been a shrinking market. It’s a tough
place to be, we don’t expect a robust recovery in the Unix market
anytime soon.”

On the other hand, Gillen believes that Unix on Intel has
reached “a new waterline in the industry, so that, while there will
be market share consolidation — what we got now is what we will have
for the next year.” For Caldera, the real danger he sees is that
the company is strongest with small- to medium-sized businesses and
those kinds of companies are “very susceptible to Linux.”

Love disagrees, saying that “Linux companies are also showing
declining sells. Everyone’s customers are having to cut back.”

As for Linux, Love points to Caldera’s Volution Exchange replacement
program and cross-platform network management program, its
bringing together of Linux and Unix, and training and support services for most commercial varieties of Linux to show that
Caldera is adding strength in both network and Linux services.

Financially, Love says as painful as the layoffs are, they will bring the company to within $2 million to $3 million of profitability, and Caldera has more than enough cash to
continue operations. Unlike its former sibling company, Lineo, Love is certain that Caldera won’t need any kind of emergency
management or financial help from primary backer Canopy.

While Gillen believes that Caldera must do more to turn the corner into
profitability than reducing costs, he also notes that Caldera’s
Unix installed base creates business for the company. “It’s not that people are going to rip out old Unix, when something works they hang on to it forever. Even if
Caldera doesn’t sell another box, there will be maintenance and
support work for Caldera Unix for the next 15 years.”

Looking ahead, though, “like Novell, they need to move new operating system licenses
to get independent software vendors interested,” he adds. Otherwise, “they’re in a Catch-22, with no license growth, there will be no new software products, and it will
be very hard to turn the downward cycle around.”

Can price-cutting, self-made applications like the Volution line,
customer and channel loyalty, and its combination of Unix and Linux
offerings bring Caldera out of the woods? The stock market, which
slammed Caldera with a 25% price drop today, doesn’t see it. But
it will be the small-business market that determines whether Caldera shrinks to
a service and support company for its installed base or rises up to
become a profitable service and operating system company for Unix and
Linux business users.

C|Net News is reporting that “In late March, Microsoft published a document that outlines how third-party developers can use Common Internet File Sharing (CIFS)… Though publishing the document should make it easier to write software that incorporates CIFS, it contains a crucial restriction that has instead handcuffed some developers… Among the products affected by the restriction is Samba, widely used software that competes with file sharing technology in Microsoft’s Windows operating system.”

Anonymous Reader writes, “LinuxDevices.com founder Rick Lehrbaum visited IBM’s developerWorks Live conference in San Francisco this week, where he saw the IBM/Citizen Linux-powered WatchPad scan fingerprints, track motion, control external devices wirelessly, and … well … tell time. He also tried the device on for size. ‘The WatchPad is actually a lot larger than what I expected,’ noted Lehrbaum. ‘It makes quite a fashion statement — perfect for those geek-intensive social events in Silicon Valley.’ Photos included! Read the story here.”

Justanutha Reader writes, “More bad news at Caldera, according to this report at Linux and Main. I guess SCO and GRUB haven’t worked out for them. Too bad — they used to be a great distribution.”

From Internetnews.com: “In response to the momentum it sees in Linux applications, IBM announced today it would roll out an open platform to speed the deployment of Linux-based e-business solutions to small-and medium-sized businesses.

IBM announced the deployment of its eServer Integrated Platform at the developerworks Live! conference in San Francisco.”

ZDNet UK notes that OpenOffice is headed to the Mac, with a “pre-alpha” developers release available.

Butterfly.net, Inc., and IBM announced
today the deployment of the first-ever custom commercial grid for the
online video gaming market. The Butterfly Grid(TM) could
enable online video game providers to support a massive number of players
within the same game by allocating computing resources to the most
populated areas and most popular games.
Butterfly.net, a development studio and infrastructure provider to
the online video game market, will demonstrate the Butterfly Grid system to
members of the video gaming industry at the Electronic Entertainment Expo
(E3) 2002 show beginning May 21 in Los Angeles.

The Grid was built by Butterfly.net over the last two years using IBM
e-business infrastructure technology that distributes the processing of
video game interaction across a network of server farms, enabling
Butterfly.net to support a massive number of video gamers playing
simultaneously over the Internet. The Grid is a secure system built on
customized software operating on the private network of Butterfly.net.

Video game providers can access the Grid to support their online
products by including the Butterfly Grid client software libraries in the
games they distribute. These software libraries, along with sample code
for connecting mobile devices, PCs and video game consoles to the Grid, are
available for download from www.butterfly.net.

“We selected IBM as the infrastructure provider for our Grid because
of their unparalleled support for the Linux operating system and grid
computing, their understanding of the unique processing and communication
requirements of video games, their carrier-independent collocation centers
and their commitment to developing this market opportunity with us as a
true partner,” said David Levine, CEO of Butterfly.net.

The Butterfly Grid is powered by rack-mounted Linux-based IBM eServer
xSeries systems hosted by IBM and running on internal fiber-optic networks
for optimal use of computing and communications resources. The grid design
offers the potential to support over one million simultaneous players from
each facility in a 24/7 environment with automatic fail over capability.

“The Butterfly Grid is an innovative Grid system with the capability
of processing online video games across a multicast network of server
farms, allowing efficient utilization of computing resources for
high-performance 3D immersive game-worlds,” said Scott Penberthy, vice
president of Business Development, IBM Global Services. “We believe the
Butterfly Grid is a breakthrough platform that will help entertainment,
media and game companies reduce costs and better deploy their entertainment
properties online.”

Online video games have historically segmented players onto separate
servers, limiting the number that could interact and creating reliability
and support obstacles. In the first generation of games, when one server
is down, or patches are being installed, game-play comes to a halt.
Butterfly’s second-generation grid technology enables online video game
providers to reliably deliver fast-paced, cutting edge games to millions at
the same time. The server interaction is completely transparent and
seamless to the user ? delivering a resilient gaming infrastructure where
servers can be added, or replaced, without interrupting game-play.

Globus Project co-leader Dr. Ian Foster of Argonne National
Laboratory and the University of Chicago noted, “The Butterfly Grid
approach to building scalable, reliable gaming infrastructure is a
wonderful example of how Grid and Globus Toolkit technologies can deliver
real value to end users. We’re delighted to have Butterfly working with
Globus technologies.”

The new Butterfly Grid is the industry’s first to provide support
for:

• Massive numbers of players within one persistent-state world. —
  Before the Butterfly Grid, online video games have been divided into
  “shards” that provide copies of the game world on separate servers,
  limiting the number of players that can interact. The Butterfly Grid
  provides “cross-server sentinels” that could potentially support the
  interaction of millions of players in one true world, with server
  boundaries invisible to players.
• Distributed Artificial Intelligence — Butterfly.net provides a
  “daemon controller” for advanced interactions between players and
  non-player characters through a simple, standard Python interface.
  · Game genre’s — Developers can build innovative action, strategy,
  role-playing, simulation and adventure games, combine genres and invent new
  ones.
• Multiple, concurrent games — With multiple online video games on one
  computing grid, publishers can allocate resources to more popular games,
  launch new games with less risk, and offer flexible and innovative
  subscription plans to drive revenue growth.
• Connected devices — Butterfly.net connects PCs, PocketPCs,
  Palm-compatible handhelds, and dedicated video-game consoles in
  massively-multiplayer online games. An innovative packet-transport protocol
  provides fast, balanced game-play over broadband, dial-up and mobile
  Internet connections for unique multi-channel interactions
• Hot-swappable components. — Once an online video game is launched, it
  doesn’t need to be constantly taken off line for patches or maintenance.
  When grid components are unavailable, connections are redirected to
  available resources for continuous gameplay.
• 3D engine support — Game developers working on the Butterfly Grid
  can exploit fully integrated, industry-standard 3D engines out of the box.

An emerging model of computing, Grids are built with clusters of
servers joined together over the Internet, using protocols provided by the
Globus open source community and other open technologies, including Linux®.
Like the World Wide Web enables people to share content over standard, open
protocols, Grid protocols emerging from the Globus open source community
are enabling organizations to create virtual organizations sharing
applications, data and computing power over the Internet to collaborate,
tackle large problems and lower the cost of computing.

Butterfly.net is working with Globus to ensure that any video game
developed according to publicly-available specifications and Internet open
standards can draw resources-on-demand from the Butterfly Grid. The Globus
Toolkit, available by download from www.globus.org, provides authorization
and accounting functions, allocates hardware resources, configures
game-specific logic and monitors performance on the Butterfly Grid.

IBM is the industry’s leading supplier of Grid systems and services
to the scientific and technical community and is working with the Globus
open source community and others to extend Grid computing into commercial
environments. In addition to working with many of the world’s leading labs
and research organizations in the development of Grid projects, IBM
Research used Globus technologies to build its own Grid — a geographically
distributed supercomputer linking IBM research and development labs in the
United States, Israel, Switzerland, Japan and England. IBM’s Global
Services organization offers the complete range of IT skills needed to
build, run and maintain Grids.

About Butterfly.net:
Butterfly.net, Inc., based in Shepherdstown, WV and Los Angeles, CA, is a
development studio, online publisher and infrastructure provider for
Massively-Multiplayer Games that connect players on PCs, consoles and
mobile devices. Butterfly.net? and Butterfly Grid? are trademarks of
Butterfly.net, Inc. For more information about Butterfly.net, visit
HYPERLINK “http://www.butterfly.net/”http://www.butterfly.net/.

About IBM:
IBM is the world’s largest information technology company, with 80 years of
leadership in helping businesses innovate. Drawing on resources from across
IBM and key Business Partners, IBM offers a wide range of services,
solutions and technologies that enable customers, large and small, to take
full advantage of the new era of e-business. For more information about
IBM, visit HYPERLINK “http://www.ibm.com”http://www.ibm.com.

About the Globus Project (TM)
The Globus Project is a multi-institutional research and development effort
creating fundamental technologies for computational grids. Grids are
persistent environments that enable software applications to integrate
instruments, displays, computational and information resources that are
managed by diverse organizations in widespread locations. A primary product
of the Globus Project is the open source Globus ToolkitTM, which is being
used in numerous large Grid deployment and application projects in the
United States, Europe, and around the world. The Globus Project is based at
Argonne National Laboratory and the University of Southern California’s
Information Sciences Institute. For more information, visit the Globus
Project web site at www.globus.org.

LinuxToday has the story. “Red Hat has taken the first public step in a campaign it initiated last December to bring its software into public schools across the United States free of charge by announcing the K-12 Red Hat Linux Education program, a move that won’t net the company any revenue, but which it sees as a long-term investment nonetheless.”

The Register notes that the case against ElcomSoft, employers of freed Russian programmer Dmitry Sklyarov, will go to trial after a judge yesterday denied the company’s motions to dismiss the case. Of note to Open Source users: “The judge ruled that the Digital Millennium Copyright Act’s ban on copyright circumvention tools is constitutional even if the circumvention tools are used for legal purposes.”

Lowendmac.com has the story asking about the purpose of running Linux on a Mac, and it comes up with at least one good reason. “Yes, despite the hoo-hah about free meaning open, the fact remains that Linux has many more no-cost useable small application programs, such as MP3 players, calendars, PIMs, and so on, than any other OS. This may seem relatively unimportant, but if money is a concern for you or your organisation — and let’s face it, if you’re using a Power Macintosh 7200 rather than a G4 it probably is — then a highly configurable OS that you can alter to suit your machines with a large selection of simple productivity applications is likely to be of interest.” But … “Linux is ugly compared to the Mac OS.”