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 From : Sergey Lentsov                       2:4615/71.10   03 May 2001  17:11:07
 To : All
 Subject : URL: http://lwn.net/2001/0503
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    See also: [46]last week's LWN.
    
 Leading items and editorials
 
    Turbolinux and Linuxcare call it off. The word went out on May 1 that
    the planned merger between Turbolinux and Linuxcare had been
    cancelled. The full story may never come out, but it seems to have
    come down to a disagreement over the relative value of the two
    companies. Neither company, of course, is worth what people once
    thought it was, and it was not possible to come to an agreement over
    what the valuations should be at this time.
    
    This breakdown is going to be hard on Linuxcare. The company has lost
    important staff in the merger process, and the support business is
    proving rather harder than many had originally thought. Linuxcare will
    find itself short of staff, short of funds, and short of business. Not
    much fun.
    
    Life may not be all that easy for Turbolinux either. The North
    American market has been a hard one to crack, and several companies
    have set their sights on Asia, Turbolinux's stronghold. There has been
    a distinct lack of press releases hyping high-profile Turbolinux
    cluster deployments. The "we're a software company" strategy appears
    to be having some difficulties.
    
    And, in fact, it appears that Turbolinux is considering moving away
    from the distribution business and toward a more service-oriented
    model. LWN actually [47]predicted this move back when the merger was
    announced. (Of course, we've predicted a lot of other things too, but
    we don't remind you of those...) Turbolinux is going to have to come
    up with a compelling strategy and set of products in a hurry, or life
    could get more difficult.
    
    Why is the support business so hard? Not that long ago, the prevailing
    FUD was that Linux needed credible support options to succeed. After
    all, nobody was going to bet their job on the system without 24x7
    support and toll-free numbers.
    
    Linux has taken off, and the support options exist. So why are so few
    companies buying those support services? Perhaps there are far fewer
    important Linux deployments than people think. Without deployments,
    there is little need for support contracts. We don't believe it,
    though.
    
    What if the truth were something else: what if Linux users simply do
    not need support? One of the nice things about Linux, after all, is
    that it simply works. It is also true that setting up Linux and making
    it work in a specific role requires a certain amount of Linux
    expertise. By the time you've figured out how to make it do what you
    need it to do, you know enough to keep it working.
    
    And, for the times when external help is needed, it's still true that
    the best source of that help is the net. Searching out an answer or
    asking in the right forum can be faster and more effective than
    talking to a technical support call center employee - and cheaper.
    
    Could it be that, in the end, technical support services are only
    needed for proprietary, black-box systems? When the source is free,
    the development directions are known, the bug lists are public, and
    anybody with the requisite skills can fix a problem, there is little
    need to buy expensive support services. Free software empowers its
    users to take responsibility for keeping their own systems going.
    
    Another bad quarter at VA Linux. Last December, VA Linux Systems
    reported $56.0 million in quarterly revenue. Thereafter, with great
    disappointment, it produced its January, 2001 revenue figure:
    $42.5 million. At that time, the company suggested that revenues would
    fall further, perhaps even "under $30 million."
    
    Did they ever. VA has just put out [48]a press release stating that
    revenues for the quarter just completed would be in the range of $18
    to $20 million. Under $30 million indeed. In other words, the money
    flowing into VA is one-third of its peak, and is back at levels last
    seen in 1999.
    
    It looks bad; one might well wonder if we are seeing the death spiral
    of one of the oldest and most successful Linux companies.
    
    Probably not. VA has gotten hammered, but the company is not
    necessarily doomed. Now is not a good time to be trying to sell
    technical infrastructure; nobody is buying. Even Cisco has seen a 30%
    fall in revenues. The dotcoms are no longer spending money like
    drunken sailors (they rather resemble badly hungover sailors these
    days), and the tighter economy has caused a lot of companies to stop
    spending. Companies like VA are highly exposed to this market; they
    benefitted from that exposure over the last few years, and it is
    hurting them now.
    
    In other words, VA's problems are not inherent in its business model
    or Linux. It could have benefitted from a more diversified customer
    base, but the simple fact is that these are hard times.
    
    VA remains a company with a strong brand, good products, and a staff
    full of top-tier Linux hackers. It also has money in the bank to keep
    it going for a little while yet. It will never have an easy life, the
    market is far too competitive for that. VA may also find itself to be
    an acquisition target as long as its stock price remains low. But,
    when the economy begins to pick up again, VA should be well positioned
    to come back.
    
    S/390 Linux to power Banco Mercantil. Not all the news from the Linux
    business world is bad. IBM is expected to announce on Thursday, May 3,
    that Banco Mercantil, one of Venezuela's largest banks, will be
    deploying Linux on an S/390 mainframe. This installation thus becomes
    one of the first high-profile financial institution deployments for
    Linux.
    
    Initially, the S/390 (running SuSE Linux) will be replacing some 30 NT
    boxes and handling fairly mundane tasks: file serving, domain name
    service, firewalling, and web serving. It will also take on some
    simple financial functions, such as allowing customers to check their
    account balances; this capability is helped by the "two cryptographic
    processors" in the S/390 system.
    
    This step was a fairly easy one for Banco Mercantil to take - it
    already had the IBM mainframe in house. So it was just a matter of
    setting up the Linux partition and installing the SuSE distribution.
    The cleverness of IBM's strategy can be seen here: many banks and
    other large institutions have these mainframes. The S/390 port allows
    these institutions to dip their toes into Linux easily, and to
    experiment with moving their tasks and software over. It wouldn't be
    surprising to see more announcements of this variety in the near
    future.
    
    SDMI followup. [49]Last week's LWN Weekly Edition discussed the
    threats against professor Edward Felten, who was planning to present
    his paper on how he cracked the SDMI watermarking scheme. Prof.
    Felten, of course, decided not to present that paper, citing the
    expense and uncertainty of litigation as the reason.
    
    Many people have pointed out that this development isn't quite the
    defeat that it seems (see, for example, [50]this Salon article). The
    paper, of course, has already [51]been published on the net, so the
    information is out there. Meanwhile Prof. Felton has shown the world,
    in a graphic way, that the Digitial Millennium Copyright Act is a
    serious threat to freedom of speech in the U.S. That demonstration may
    prove to be far more valuable than a presentation of his SDMI paper.
    
    The DeCSS case reopens. One place where the withdrawal of the SDMI
    paper may have an effect is in the DeCSS appeal, for which testimony
    began on May 1. This case, of course, is based on the DMCA, so
    demonstrations of the DMCA's effect on freedom of speech are relevant.
    For coverage of how the testimony went, see [52]this Wired News
    article, or [53]this highly detailed Slashdot article. Predicting the
    outcome of these cases is always perilous, but this looks like it is
    going to be a tough battle.
    
    Inside this week's Linux Weekly News:
      * [54]Security: CylantSecure for Linux, vulnerabilities in gnupg,
        Bugzilla, KDEsu, and gftp.
      * [55]Kernel: 2.4.4 wobbles out; dump and filesystem corruption;
        swap space management.
      * [56]Distributions: Conectiva drafts a plan for measuring quality
        from a user perspective, a new distribution from Brazil crops up.
      * [57]On the Desktop: XFce, GNOME Packaging Project, Sikigami,
        Mosfet returns.
      * [58]Development: GLAME audio editor, X15 web server, Zope Book,
        Jxta series, dumbcode.
      * [59]Commerce: Sony releases Linux for the PlayStation 2,
        TurboGenomics releases TurboBLAST.
      * [60]History: VA Linux, Linuxcare in the past.
      * [61]Letters: Free audio licenses; somebody to blame; desktop page
        gripes.
        
    ...plus the usual array of reports, updates, and announcements.
    
    This Week's LWN was brought to you by:
      * [62]Jonathan Corbet, Executive Editor
      * [63]Elizabeth O. Coolbaugh, Managing Editor
      * [64]Michael J. Hammel, Senior Editor
        
    May 3, 2001
    
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    [68]Eklektix, Inc. Linux powered! Copyright Л 2001 [69]Eklektix, Inc.,
    all rights reserved
    Linux (R) is a registered trademark of Linus Torvalds
 
 References
 
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    3. http://lwn.net/2001/0503/security.php3
    4. http://lwn.net/2001/0503/kernel.php3
    5. http://lwn.net/2001/0503/dists.php3
    6. http://lwn.net/2001/0503/desktop.php3
    7. http://lwn.net/2001/0503/devel.php3
    8. http://lwn.net/2001/0503/commerce.php3
    9. http://lwn.net/2001/0503/press.php3
   10. http://lwn.net/2001/0503/announce.php3
   11. http://lwn.net/2001/0503/history.php3
   12. http://lwn.net/2001/0503/letters.php3
   13. http://lwn.net/2001/0503/bigpage.php3
   14. http://lwn.net/daily/
   15. http://lwn.net/cgi-bin/webcal.pl
   16. http://lwn.net/stocks/
   17. http://lwn.net/Reviews/
   18. http://lwn.net/Gallery/
   19. http://lwn.net/archives/
   20. http://lwn.net/op/headlines.phtml
   21. http://lwn.net/op/Contact.html
   22. http://linux.tucows.com/
   23. http://news.tucows.com/ext2/
   24. http://unixthemes.tucows.com/
   25. http://lwn.net/2001/features/KernelSummit/
   26. http://lwn.net/2001/features/Singapore
   27. http://lwn.net/2001/features/djbdns.php3
   28. http://lwn.net/2001/features/linuxworldny/
   29. http://lwn.net/2001/features/JHaas/
   30. http://lwn.net/2001/features/LarryWall/
   31. http://lwn.net/2001/features/Momjian/
   32. http://lwn.net/2000/features/Timeline/
   33. http://lwn.net/2000/features/ESR/
   34. http://lwn.net/2000/features/Comdex/index.php3
   35. http://lwn.net/2000/features/Comdex/RansomLove.php3
   36. http://lwn.net/2000/features/Guido.php3
   37. http://lwn.net/2000/features/PaulEveritt.php3
   38. http://lwn.net/2000/features/ESC/
   39. http://lwn.net/2000/features/ESC/ELC.php3
   40. http://lwn.net/2000/features/OLS/
   41. http://lwn.net/2000/features/CBunks/
   42. http://lwn.net/2000/features/pcb/
   43. http://lwn.net/2000/features/Axis/
   44. http://lwn.net/2000/features/FSLCluster/
   45. http://lwn.net/2001/0503/
   46. http://lwn.net/2001/0426/
   47. http://lwn.net/2001/0118/index.php3#merger
   48.
 http://www.businesswire.com/cgi-bin/f_headline.cgi?bw.042601/211160631&ticker=LN
 UX
   49. http://lwn.net/2001/0426/index.php3#sdmi
   50. http://www.salon.com/tech/log/2001/04/26/felten/
   51. http://cryptome.org/sdmi-attack.htm
   52. http://www.wired.com/news/digiwood/0,1412,43470,00.html
   53. http://slashdot.org/article.pl?sid=01/05/02/1228252&mode=thread
   54. http://lwn.net/2001/0503/security.php3
   55. http://lwn.net/2001/0503/kernel.php3
   56. http://lwn.net/2001/0503/dists.php3
   57. http://lwn.net/2001/0503/desktop.php3
   58. http://lwn.net/2001/0503/devel.php3
   59. http://lwn.net/2001/0503/commerce.php3
   60. http://lwn.net/2001/0503/history.php3
   61. http://lwn.net/2001/0503/letters.php3
   62. mailto:lwn@lwn.net
   63. mailto:lwn@lwn.net
   64. mailto:lwn@lwn.net
   65. http://ads.tucows.com/click.ng/buttonpos=lwnbutton125top
   66. http://ads.tucows.com/click.ng/buttonpos=125-001-016
   67. http://lwn.net/2001/0503/security.php3
   68. http://www.eklektix.com/
   69. http://www.eklektix.com/
 
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