Anonymous Reader writes: “Yahoo
has a press release about TUXIA and its Linux set-top reference design. This is the beginning of a REAL home gateway/set-top solution.”

Augusto Campos writes: “There’s a new report about

broadband service providers available to Linux users. Of course,

all 106 linux-compatible broadband ISPs listed are brazilian, but the

data on hardware, security issues, port blocking (by the ISPs), and

other issues gathered from hundreds of users may be useful for

international readers, with some help from babelfish… All the data

will be made available to the related HOWTO authors as soon as I can

find them.” (This article is in Portugese.)

– By Jack Bryar –
As NewsForge’s in-house business writer I’ve had a problem for over a
year — what to say about the biggest business story in Open Source. The biggest story wasn’t that Red Hat got a little traction in the market and was being treated like a distinct OS by most third-party developers. It wasn’t that Caldera, the largest Linux distributor in terms of revenue, was headed by an Open Source agnostic. Although the news that IBM
had undergone a Linux conversion was a big story, it wasn’t nearly as compelling as news coming from a little closer to home. Outside of NewsForge and other OSDN sites, anyone would tell you that the most compelling business story in Linux, if not all of IT, has been the incredible shrinking market cap of NewsForge’s (and OSDN’s) corporate owner.

VA Linux, the greatest opening hit in stock market history, is now worth one half of one percent of its peak market capitalization. I have been looking for comparisons for the last couple of weeks, but as far as I can determine, this may be the largest value crash of any publicly traded company with a continuing business since 1929. That makes it a legitimate news story, if not exactly a comfortable one to cover.

The litany of VA’s problems may be familiar to some of you. The company is getting out of its original core business. While other Linux-centered hardware companies like Cobalt were snapped up by major hardware developers for 40 to 50 times revenue, VA couldn’t find a buyer for its equipment business. While other floundering Linux companies were showing revenue growth, VA’s declined
precipitously, even before the company finally abandoned its hardware business. Analyst Amit Chopra, of Credit Suisse First Boston, said that VA had simply been “overwhelmed by traditional server vendors.” Even before the company
wrote off an astounding quarter billion dollars in special charges and goodwill against revenues of $16 million, VA’s $0.64 loss per share was double the street estimates among the few brokerage houses still following the stock.

It could have been worse, had some wire service stories been accurate. Investors who subscribed to Factiva were told that VA’s loss was $ 2.9 billion, before the wire service corrected its release 17 minutes later.

There was more confusion. Reporters who had managed to get into the announcement teleconference reported that VA would rely on sales of proprietary software in the future. So much for Open Source. The next day Eric S. Raymond added his own spin, as he distributed a message suggesting that VA’s commitment to proprietary enhancements amounted to little more than an interim marketing tactic. Raymond said, “There is less here than meets the eye. This is a change in tactics, not strategy.”

Raymond suggested that VA’s problems were due in part to conservative IT managers, and that the only way to get these managers to buy software instead of simply downloading it and using it required “hanging some proprietary tinsel off the product.” Raymond suggested strongly that VA’s strategy and value proposition continued to be focused on “the service contract.”

Unfortunately, there is little evidence to suggest that “conservatism” or a corporate reluctance to embrace Linux had much to do with VA’s problems. On the contrary, Linux is rapidly being brought into enterprise environments, at least experimentally. According to Carl Howe of Forrester Research, better than half of the largest U.S. corporations
have adopted Open Source for one or more projects in the last year, an adoption rate that exceeds the PC revolution in its earliest days.

The second problem with Raymond’s analysis is that it assumes enterprise adopters are being “penny wise and pound foolish” as they spend resources training their staffs rather than renting expertise from VA. Perhaps, but the trend has been that any time a company begins to embrace a core technology it will invest in human capital to support it. That means developing internal expertise rather than outsourcing it. The expertise is coming online. Nearly every major university teaches OS development using Linux. Most new computer science majors are graduating with Linux and Java development skills.

Successful IT services companies have learned that the key to staying in business is developing a practice that focused on training and business process management rather than just developing widgets. Both IBM’s consulting business and Microsoft Consulting Services (MCS) are good examples of this business model. While no competitor seriously questions VA’s technical chops, IBM’s and Microsoft’s services learned that they needed to talk management strategy as well.

VA’s problems were far more straightforward, and they were tied directly to the fate of the dot-com revolution. It was obvious from the beginning that VA would never be able to compete in established markets against the IBMs and Dells of the world. But emerging ISPs and dot-com entrepreneurs were fair game. Most traditional vendors had no
channels targeting them. In addition, many of these smaller companies were headed by teams that were looking for bargains, and who hated Microsoft products for reasons that were equal parts ideological and performance related. It was a tempting target.

Unfortunately, the dot-com boom was well on its way to becoming a bust even before VA floated the idea of going public. Whatever the deficits of VA’s business plan, it was brilliant compared to businesses that decided that the Internet was the ideal way to sell broccoli or Kibbles n Bits. Unfortunately for VA, by the time the company had fully
ramped up to sell to this market it had disappeared.

In any case, VA has moved on. According to CEO Larry Augustin, VA’s strategic focus will center on enterprise versions of the company’s SourceForge software, which lets businesses set up collaborative programming sites.

This makes a fair amount of sense.

Today, large enterprises develop new code on a 24×7 basis. Programmers from around the world may collaborate on software design and development without ever meeting each other. There’s a real need for process management systems that help track and organize that collaborative process. In many ways enterprise code development parallels the process that created the Linux code base. Projects get started, then stopped, then re-started months later. IT personnel turn over. Frequently program originators are long gone by the time a project is completed. Requirements often change drastically during the development cycle.

One of the biggest attractions Open Source has for many IT managers is that open, documented code allows for broad participation in code development and supports iterative
changes. As everything is open, everything is viewable and testable. There are no hidden “gotchas” squirreled away in compiled code. Individuals working outside a “core” development team can develop and test a change on their own and post it back to that development team.

There is little question that collaborative development of this type needs an organizational framework to identify projects and their owners and to track relevant code libraries and remaining
development issues.

But collaborative development requires training in a process as well as access to a software program. Where is the value? Should VA focus on morphing SourceForge into a collaborative development tool, and take on CollabNet — and eventually Microsoft?

Or is VA missing yet another opportunity? Is there a better business to be had teaching clients how to develop their collaborative programming methods by using the “community” approach that is responsible for Linux’s success in the marketplace?

It’s a tough call. I’m glad I don’t have to make it. I don’t even like discussing it.

ZDNet explains why IBM matters again, as the company’s commitment to Linux grows.

An Anonymous Reader writes “Linuxlookup.com coverage of Linux World Expo 2001 – Day 1.

Today is the first day of Linux World Expo 2001 in San Francisco, and it has been hailed as the largest Linux conference yet. Since our coverage of last year’s summer expo, Linux has gone through a variety of changes. With this year’s release of the Linux Kernel v2.4, the slowing down of the tech economy, and ups and downs of many Linux IPOs, who knows what the future will bring. But the vast amounts of people at this event show that the Linux movement is still chugging along at an amazing pace with no intention of slowing down. Everywhere I look people are….

full story on http://www.linuxlookup.com main page… or at: http://www.linuxlookup.com/html/articles/LWE_2001_ day_1.html”

From PR Newswire: “Rainmaker Technologies, Inc. announces landmark technology capable of delivering 10Gbps of digital capacity to the side of the home over existing cable networks.”

CNet reports that Vivendi Universal has completed its purchase of on-line music site MP3.com.

Kelly McNeill writes “Gaining top search positions for your chosen search words and phrases has become more and more competitive, as search engine optimization firms use new, more effective techniques to place their large clients. The little guy needs every possible advantage to have the visibility necessary to bring search traffic, but with new paid inclusion programs being launched by each of the major search engines seeking to “monetize” free search, this is becoming more costly.”

San Jose, California – A United States grand jury
this
afternoon indicted Russian company Elcomsoft along
with
previously jailed programmer Dmitry Sklyarov on
charges
of trafficking and conspiracy to traffic in a
copyright
circumvention device.

Since the grand jury handed down a five-count
indictment,
Sklyarov — who is out of custody on $50,000 bail —
could
face a prison term of up to twenty-five years and a
US
$2,250,000 fine. As a corporation, Elcomsoft faces a
potential US $2,500,000 fine.

“We have been hearing from many people about lawful
uses of Elcomsoft’s computer program,” explained
Cindy
Cohn, Electronic Frontier Foundation Legal Director.
“It’s outrageous that the unconstitutional Digital
Millennium Copyright Act (DMCA) could put this young
man
away for much of the rest of his life.”

“We were hoping that the government would see the
wisdom
and justice in not pursuing a case against
Sklyarov,”
said his attorney, Joseph M. Burton of Duane Morris
in
San Francisco. “Even if one were to ignore the
serious
legal questions involving the DMCA, this case hardly
cries out for criminal prosecution. Sklyarov’s and
Elcomsoft’s actions are not conduct that Congress
intended to criminalize. We will vigorously contest
these
charges.”

Sklyarov and his attorneys will appear at an
arraignment
scheduled for 9:30 AM Pacific time this Thursday,
August 30, with US Magistrate Judge Richard Seeborg
presiding, in courtroom 4, 5th floor of the Federal
District Court for the Northern District of
California,
San Jose Branch, 280 South 1st Street, in San Jose,
California.

Well-dressed observers plan to attend the
arraignment
and nonviolent protests are scheduled in Moscow
(Russia),
London (England), Boston, San Francisco, Los
Angeles,
and Black Rock City, Nevada.

Directions and map to San Jose Federal Building:
http://www.cand.uscourts.gov/cand/CourtInfo.nsf/6f311f8841e7da2488256405006827f0/f3b46c67b334132e88256682007f6ba9?OpenDocument

Background on the Sklyarov case:
http://www.eff.org/IP/DMCA/US_v_Sklyarov/

Calendar of protests related to the Sklyarov case:
http://freesklyarov.org/calendar/

About EFF:

The Electronic Frontier Foundation is the leading
civil
liberties organization working to protect rights in
the
digital world. Founded in 1990, EFF actively
encourages and
challenges industry and government to support free
expression, privacy, and openness in the information
society. EFF is a member-supported organization and
maintains one of the most linked-to websites in the
world:
http://www.eff.org/

Linux PR has an press release from Fortuitous Technologies offering a “5 day course” which “offers students the perfect atmosphere to learn Linux in a relaxed and professional environment” for $2250.