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On Monday, August Capital invested $5.5 million in Linux distribution vendor TurboLinux. Intel and Broadview, an investment banker, also invested in the firm (amounts were not disclosed). As TurboLinux marketing VP Lonn Johnston joked, "We're a funded Linux company now, and we'll be able to do some things that we couldn't do before, like buy beer."

TurboLinux's funding announcement came just three days after VA Linux, the leading vendor of computers with Linux preinstalled, announced that it had filed for a public offering. And then on Tuesday, VA Linux, Silicon Graphics and technical book publisher O'Reilly & Associates announced that the companies plan to sell and support the Debian GNU/Linux distribution, long considered by free-software hackers to be the most "pure" of all the Linux distributions -- the distribution whose development is the least cluttered by commercial concerns or marketing distractions.

Red Hat certainly has changed the software business in at least one respect: Since the company's spectacularly successful initial public offering, now, more than ever, anyone with a bulging wallet seems desperate to throw cash at companies that are losing money as they struggle to figure out how to sell or support software freely available on the Net. Sure, that might be an oversimplification: TurboLinux sells high-priced versions of Linux specialized for computer server tasks, and VA Linux focuses on integrating hardware and software and providing "Linux solutions." Still, the motivations of the people who write free software and the motivations of the people who want to build profitable companies on top of that software are at variance -- and this disjunction remains a complex fault line in the business model of free software.

One way to look at the recent Linux developments is as flanking maneuvers aimed at preventing Red Hat from dominating the market. As Rappaport observes, "Nobody wants anybody to evolve to the same position in the Linux market that Microsoft evolved to [in the consumer desktop market]. It would be really bad if there were only one or two dominant companies. So the question is, how can we build strong companies without creating a company that is too strong?"

So VA Linux, which has long shipped Red Hat Linux as the default installation on its computers -- and which declares in its prospectus that it is "neutral" with regard to Linux distributions -- may be throwing its support behind Debian as a way of avoiding too much dependence on Red Hat. Meanwhile, venture capitalists line up behind companies that each aim to slice off a piece of the market that Red Hat straddles, hoping through their own financial support to blunt the potential emergence of a Linux juggernaut.

What emerges most clearly from a reading of "Under the Radar" and recent market developments, however, is just how much that's happening today can be filed under the heading of "hedging one's bets." In this snippet from the book, Intel CEO Andy Grove becomes alarmed when he learns that Linux is popping up on internal marketing surveys as a fast-growing phenomenon:

"We need to have a Linux position!" he said. "Why the #$%$! aren't we doing something about this?"

Intel's eventual investment in Red Hat is presented in "Under the Radar" as a ratification of Red Hat's Linux leadership. But today, Intel has investments in Red Hat, TurboLinux and VA Linux. Like a roulette player betting on every number on the wheel, Intel appears to be strategizing to be successful no matter who comes out on top of the Linux heap -- or, viewed from a more Machiavellian perspective, to ensure that no one company is successful enough to dictate terms to Intel, as certain other software companies have been wont to do.

Under the Radar: How Red Hat Changed the Software Business -- and Took Microsoft by Surprise By Robert Young and Wendy Goldman Rohm Coriolis 197 pages Buy Under the Radar: How Red Hat Changed the Software Business -- and Took Microsoft by Surprise

Everyone needs to have a Linux position, even Microsoft -- a company that last week displayed a nicely ironic sense of timing by revamping its anti-Linux Web pages into a streamlined "Linux Myths" Web page at just about the same time "Under the Radar" started hitting the bookstores. Indeed, upon reflection, one wonders why Microsoft itself hasn't joined the rush and invested in a Linux company.

Perhaps it's because, as "Under the Radar's" title declares, Microsoft was taken by surprise by Red Hat and the rise of Linux. But while that may have been the case two or three years ago, it certainly isn't true today. The software industry has its eyes wide open to Linux -- thanks, of course, in part to Red Hat, but also more generally to the thousands of developers and hackers who have flocked to free software over the past decade and built a stable of software tools that work astonishingly well.

And that's a point that seems lost in the self-congratulatory rhetoric of "Under the Radar" -- as well as obscured by the frenzy of speculation and deal-making currently sweeping the Linux marketplace. Free software didn't grow because entrepreneurs saw the potential to make a killing; it grew because individual programmers sought better tools for solving their daily computing problems. Bob Young dedicates the book to "everyone who has ever contributed so much as one line of code to an open source project," and Red Hat did make a valiant effort to cut such programmers in on its initial public offering. But in the long run, Red Hat did not change the software business, nor will VA Linux or TurboLinux or any other single company or alliance of software companies.

The reaction of some Debian developers contacted for comment on the announcement that Debian would be commercially sold and supported by the VA Linux-O'Reilly-SGI alliance is instructive here. Given the passion that many Debian developers have expressed over the years for keeping Debian free of the taint of commercialism and for focusing their efforts solely in the direction of writing good code, one might have expected some strong fears about being drawn into the corporate realm, that murky domain where behind-the-scenes strategizing by venture capitalists calls the shots.

Instead, the developers heaved a collective shrug. Debian GNU/Linux is protected by the powerful GNU General Public License -- and there is no reason whatsoever to believe that such stalwart free-software supporters as O'Reilly, VA Linux and SGI would ever dare to contravene its restrictions, which help to ensure that software code under its umbrella stays open and free. The alliance has even declared that all profits from the sale of Debian GNU/Linux will be donated to the nonprofit organization Software in the Public Interest, which funds Debian development.

The developers will keep doing exactly what they've done in the past: While Red Hat and the other Linux startups maneuver for market share, investment capital and leverage against Microsoft, they'll just hack on the code. Most of them will stay forever under the radar -- and it doesn't seem to bother them one bit.
salon.com | Oct. 14, 1999

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