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VA Linux Announces Planned 25% Staff Cut 160

prac_regex was the first to write with news of planned cuts announced today for VA Linux. "The title doesn't say it all, but it says a lot. Yahoo reports the cost cutting VA implemented today." VA reported higher-than expected per-share losses, and announced some big organizational changes as well. Guess "playing in the big leagues" means taking the occasional bean-ball. (Note: OSDN, of which Slashdot is a part, is itself part of VA, in case you hadn't heard;))
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VA Linux Announces Planned 25% Staff Cut

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  • Hey, let's look at WinNT 5 (i.e. Win-2000) for a real '70's OS. It is demonstrably closer to VMS than Linux is to Unix (in everything but name).

    -Ed
  • VaLinux was and probably always will be a company that builds expensive linux machines for elite linux users

    According to this article [theregister.co.uk] at The Register, ...the company would discontinue building custom hardware. "It was never core to our business model and we can't afford those investments," ... Again, according to the Reg, VA are going to be concentrating on software engineering and software customisation.

    Hacker: A criminal who breaks into computer systems
  • by Anonymous Coward
    revenue is how much money you take in roughly..profit is how much you MAKE (after paying everyonet buying a lot of crap, etc...) VA has revenue, ie people buy their stuff. but they have no profit. in fact, they spend a LOT more than they make, some 26 million more if i'm not mistaken. so there's your answer in layman terms.
  • well now that I know there's a commandline streamripper (are you responsible for the win32 gui prog of the same name?) I'll be helping live365 go broke quicker :)
  • they give linux a bad name
    one: their PCs are very expensive
    two: very few and bad options for videocards soundcards , which a PCs user usually look for
    three: they are arrogant , i send em an email before and they told me , that am not (as a home user) their target customer ??!!!
    i dont know how many corporation use linux on their desktops , or their primary servers
    but those companies , reminds me of apple
    they have wrong goals and objectives

    penguincomputing say on their site they dont make dual boot machine linux with windows ...because they are linux only ... gee how many linux first timer gonna buy from them now ...

    PCs are commodity items now , every one can buy one and use it , kinda like a TV or a playstation

    so maybe they wonna focus on the server market

    but heh ... i heard linux and oracle dont mix
    and windows XP is probably gonna penetrate more in the small server market then linux will ever will ...

    linux should target university student

    i think
  • Hell, they can't even sell their hardware. When I contacted them a year ago about whether they wanted some business supplying my employer hardware, no-one could even be bothered repsonding my mail.

    I know a million or so New Zealand dollars are only worth half a million US, so I guess VA couldn't be bothered with such a small account.

  • Comment removed based on user account deletion
  • by trog ( 6564 ) on Tuesday February 20, 2001 @03:08PM (#416274)
    The trouble is is that VA is a hardware company at the end of the day. And their selling point was their Linux expertise.

    And they couldn't even sell that. The company I work for (in Menlo Park, CA) wanted to contract with VA for some performance tweaking of a few large MySQL database servers running Linux. While the cost was about average for consulting rates, there was a four week lag time until the consultant could visit.

    We didn't have the time. We figured it out ourselves.

    But who were they selling to? The geek market is more likely to be making their own computers and installing their own distros. The large corporate market is likely to have their own staff that can deal with installing and configuring Linux.

    This is somewhat true. We use Linux, FreeBSD and OpenBSD in our production environment. However, we buy systems from ASL Labs. The VA boxes were just too damn expensive, and the ASL machines were of higher quality hardware.

    My perception of VA is that they are too concerned with Community "Look Good", and not concerned enough with running a profitable business. On one hand, they've done a great service to the Linux community. On the other, they are starting to fall apart because of it.

  • Will someone please explain why there are so many snide remarks about Jon Katz?
  • Heh yeah, I had that one. It was a 96 sunfire. They had problems when I went to pick it up so they dropped it off at work for me. Apparently the thermostat was fubar and they were having problems with it on the testdrive before delivery (winter). Then, I got in and it had no lock in the glove box...big whoopeee but it looked out of place not having it.

    A few months down the road I get a bunch of no-starts in the morning so my gf and I are both late for work. Thermostat again. It gets "fixed".

    Summer comes around, the bitch over heats 15k from civilization and boils g0d knows how much water out of the rad. Thank GM for road side assistance.

    It gets "fixed"...oh, thermostat problem again.

    [Insert several morning no-starts here]

    By now I'm 2 years into the lease, upsidedown as all hell but fuckit. I switched it for a used Honda and the only problems I've had since are having no excuse for being late for work!

    Prior to that, I had another 96 sunfre without problems except for the fact that it didn't corner as well as I thought it should have at 70km/h on a corner rated for 30...and I took out the local newspaper's propane shack. I was a lucky bastard that day.

    Oh, and I failed to mention the 2 or 3 recall's on the car (stupid trivial stuf...like missing stickers for drivers side airbag....I knew the bitch was there, she wouldn't shutup the whole time I was dating her!! What did I need stickers for?)

    --Clay

  • The tech industry does not have unions in any large manner because unions would quickly destroy several of the foundations the tech industry relies upon. The tech industry is based on knowlege and skill. If you don't know and/or you can't do, then you are not promoted (and possibly) fired.

    I think that you have a slanted view of unions. Unions do help workers. How many of your co-workers pull the weight you think they should? I come from a coal mining family, a union job is much better than that from a truck mine.

    Sure, unions have downsides just like any work enviroment. But, with a union you have some concrete asurance that you can control your work enviroment. (Who can say that tech workers won't be as numerous as mine workers in the future?)

    Support unions, soon the person three blocks over will do the same thing as you; cheaper! Largely, I support unions. The Heads of unions do underhanded things, which is why a union head should be an plain worker. But, damnit workers need corperate representantion.

    Sorry, for the rant. My father is a coal miner and I know that for a common worker you can be replaced, with common labor, without reason . In 20 years IT workers will have much the same job. That of a common worker.

  • So does Mandrakesoft which seems to be growing extremely fast... in silence!
  • It's only reasonable to use "irregardless" as a one-word synonym of "somewhat conscientious." It's logical, and after all English is nothing if not adaptable. As for me, even though I sometimes ignore correct usage, at least I always write irregardless of semantic meaning.
  • I don't get what you don't get. They are LOSING money hand over fist. Now maybe they only lost a wee bit more than they anticipate, but companies simply cannot keep on losing money. In other words, the accuracy of these _public_ predictionals are not necessarily terribly relevant, there are other more important factors that you're ignoring. Such as, they also predicted that they're not going to be profitable till October 2002, 9 months later than what they first declared. This means that they may very well run out of cash before that point. The situation might well demand that they cut staff to even survive. What's more, they're predicting that their revenues may actually fall.

  • I work for a startup semiconductor company, and last summer it became obvious that the only thing preventing us from being profitable was our debt.

    Without going into the long form (which would require me to review the thinking that went into such decisions and that would, alas, make my brain hurt), this is precisely why my finance prof said that nobody sane loaned tech companies money.

    This doesn't, of course, mean that loans don't happen. In part, loans can happen as an interim measure where equity financing is expected (i.e., as in your company, the liability is going to transform from debt to equity).

    There are certain businesses where it makes more sense to have a debt load than an equity load and certain businesses where it's the other way.

    It is generally a better option, at least in tech, to finance capital through equity rather than through debt. This is why the venture capitalists have been getting rich off the tech boom and the banks haven't.

    _Deirdre

  • Well, there's no need to be so rude, but I have to agree with your content. Both of the well-known champions of free software or open source, Stallman and Raymond, have based their entire platforms on bizarre claims that didn't add up, and as a result they both have increasingly come to be seen as embarassments.

    In Raymond's case, his Libertarian dogma led him to pronounce that open source would make tremendous amounts of money and be a fabulous success, although as far as anyone can tell, Raymond has never been involved with creating an actual business plan, successful or otherwise. There was no business model behind his pronouncement, only the zeal of the religious devotee. Because the open source movement's value claims were snake oil, we are now left looking at the fading remnants of the Linux bubble.

    In the message you quoted, Raymond states,

    This is a question that a lot of us will be facing as open source sweeps the technology landscape. Money follows where value leads, and the mainstream business and finance world is seeing increasing value in our tribe of scruffy hackers.

    If that's not embarassing now, I don't know what is. Open source has turned out to be marginal and only rarely even slightly profitable. The revolution will not be televised, because there is no revolution.

    Tim

  • Man, this discussion makes me feel like a new-comer to Slashdot. I only have a four-digit ID in the midst of a three-digit conversation. I always have to grin a little when someone referes to a id of 60,000 as "low."

    It should also be noted that Slashdot had been around for a while before the Andover buyout, and was making money. Granted the money was coming from advertising (which is not making the money it once did on the Internet), but it had an established method of making money.

    The other thing that /. has going for it is the lack of a product (tell that to etoys and Amazon). It is damn cheap to come up with stories that will get hundred of thousands of hits a day (especially when fools like us send them in). Not only that, but the hits are coming from a very targetted audience (one that has quite a bit of money at that).

    Very low overhead. The servers and bandwidth probably cost a little, but other than that... (I mean, we all know that CmdrTaco sits at home and eats peanut butter and Ramin).
  • > Sorry man, but a bunch of geeks whining is not interesting. Trolls get variations of those four topics on the front page every day at kuro5hin.

    Yeah. I sometimes check kuro5hin and read the comments. It is mostly ridiculous contentless mojo-whoring / self-satisfaction / mutual dick-sucking

    Btw, you missed the (paraphrased)

    5. I have a gun, and love it. But what can I use it for ?

    6. Since last year, I got one year older, but still can't get laid. Am I homosexual ?

    7. I am white, male, healthy, I never had a baby and my parent gives me money every month. Here is my position on abortion.

    Kuro5hin is deadly ridiculous. If they had Anonymous Cowards, the quality would probably be better.

    Cheers,

    --fred
  • by Chuck Flynn ( 265247 ) on Tuesday February 20, 2001 @02:13PM (#416285)
    Not once has a popular website been bought out by a big corporation without losing its soul, and not once has a corporation managed such a site successfully without losing its shirt.

    Slashdot? We just haven't seen the end of the road, yet. But it's coming.

    It's the classic problem of vertical consolidation in the industry: VaLinux makes the hardware that people run when reading VaLinux's web content (via Andover). They control each stage of the production, and they ought to be able to do so financially successfully, right?

    Wrong.

    The disparate parts of VaLinux's farflung online empire were never well-suited to furthering VaLinux's corporate goals. VaLinux was and probably always will be a company that builds expensive linux machines for elite linux users (unlike Dell and other companies targetting the low-end linux crowd). Slashdot, Freshmeat, and now Kuro5hin were never aimed at this same audience.

    The average Slashdot reader can't be bothered to load OSDN's [osdn.com] ads. What made VaLinux think they could convince those same users to buy VaLinux-branded hardware?

    Either the Andover division is going down in flames with VaLinux, or it will be jettisoned.

    I only wish I could see the smirk melting from ESR's face. What's his portfolio worth now?
  • I'm sorry guys...I've been getting Open Magazine for free even though I'm not in a position to actually buy any of the advertiser's products.
  • by Anonymous Coward
    Last week, some signs with the VA logo saying "Got Pink Slip?" [1] were seen circulating around the VA offices. They were squelched by HR fairly quickly, but a lot of people at VA felt this was in the air long before the official announcement.

    [1] A parody of several things, including a former sign that had the VA logo and "Got love?"

  • by zaius ( 147422 ) <jeff&zaius,dyndns,org> on Tuesday February 20, 2001 @02:13PM (#416288)
    Finally, CowboyNeal is a legitimate poll option...

  • VA Stock IPO high value: ~$274
    ESR value at high: ~$40,000,000

    VA Linux Today's close: $7.25
    ESR value today: ~$40,000,000*7.25/274 = ~$1,058,000


    Where is the "priceless" line?
    __
  • When ever there is a new type of business there is the feel about stage where companies try to feel around and find thier place in the industry. The OSS business is just in it's infancy. Let us hope in the next year or so it will find itself.
  • Doubled it's revenue but widened it loss. It's like having a housekeeper without have a paycheck. Eventually the money will run out.
  • "I've never understood what keeps compaq and dell afloat - their stuff is not as cheap or as good as generic clone hardware."

    A few things:

    1- Standardization: I can buy big OEM servers year after year and little actually changes. This makes all aspects of physical server management easier. For example, by ordering two-hundred servers from the same line over the course of two years, little parts here and there will change, but overall the design stays the same. This makes things like quick part replacements quick and easy. It also makes planning for rack utilization easier if I know exactly how big all the boxes I will use in the next year will be.

    2- Vendor support. If I have a big problem with a Compaq/Dell box, I can pay them to come deal with it, and chances are that one way or another I can get someone who knows the hardware in and out. Good luck doing that with a clone box.
  • but I am tired of...celver signatures

    Dude, Can you clue me in on how you can embed knives into your signature. I've never seen one of these clever signatures, but it sounds like just about the coolest thing that could possibly be done with html.
    _____________

  • by bmetz ( 523 ) on Tuesday February 20, 2001 @02:15PM (#416294) Homepage
    Here. In terms of code, this is how a start up runs:

    if (Money Out > Money In && Stupid_Venture_Capitalists == 0)
    decrease_money_out();
    else
    buy_superbowl_ads();
  • Not deadly - extremely alive!
  • ... I thought the Jon Erikson account had been retired permanently. What's up, a karma-whoring onslaught before a great revival?

    Sniff - I miss the inchfan.

  • I can see both sides of this one. And I agree that American unionism, as currently practiced, is quite incompatible with the 'geek cowboy' culture that keeps the computers running. But what if a union was more like a guild? Among other things, it could promise employers that when you hire an (apprentice|journeyman|master) you get a certain level of knowledge. This is similar to the idea of 'certification', except I don't think certification should be controlled by a company like Red Hat, but rather by a body of professionals.
    Ah, that's the concept I'm groping for. I don't want sysadmins etc. to become blue-collar union members, but I'd like us to become professionals, and currently we're not. And given the nature of our work and personalities, we don't need some age-encrusted authority 'certifying' us for knowing Cobol/CICS. We need a new organizational structure, properly adapted to the internet age.
    Why aren't we professionals now? Well, professionals are people who took an oath in order to assume their current status. Medical doctors take the hippocratic oath, and it's at least controversial when a doctor administers a lethal injection. When a sysadmin is asked by management to violate a user's privacy, he can't say "I took an oath not to do that. I'd be expelled from the worldwide league of sysadmins." But I kind of wish he could.
  • Today VA provides fully scalable systems that literally smoke the best Sun and SGI systems.

    I'd really like to see a VA Linux box that can "smoke" a fully loaded E10k. What were those TPC benchmark values again?

  • by Anonymous Coward
    Heh heh.... I work for a company that is involved with union shop Worker's comp claims... You should see these things spike the Friday before deer season -- EVERYONE has a back problem...
  • I was just watching CNBC and according to the moron doing the reporting "Linux...the popular computer program that many programmers are happy with" is down 30% in trading today due to job cuts and organizational changes.

    Does anyone know where I can dump all these shares of Linux I have clogging my portfolio?
  • I'd much rather have normal, standard parts than the weird junk that Compaq uses. I don't see proprietary motherboards as a big value-add. However, I agree that VA were simply building 'best practices' clone boxes and selling them at inflated prices.
    They were hoping to get the kind of unified identity that Sun or HP have - they sell the box with the OS and support the combo. If spending my own money, I'd rather build clones from scratch because then I trust them. But I wouldn't recommend this to a big company - it's easier for them to spend a few bucks more on VA. I've never understood what keeps compaq and dell afloat - their stuff is not as cheap or as good as generic clone hardware.
  • by Anonymous Coward
    -1 Troll.

    Says it all. This is FUNNY SHIT morons. A troll is someone trying to provoke angry responses through posting things that are sure to do it.

    Christ, I swear some of you should have your accounts revoked so you can't moderate like this again anytime soon. :P

  • OK just 25% of John Katz will do it too.
  • Quick example: say I have 1M shares outstanding worth $5 each. I need to raise $1M. This means I can issue another .2M shares, which basically means, since the company has no more assets, that each share is worth 5/6 (1M old shares / 1.2M new shares) what it was before. That's what dilution means.
    This requires the permission of the shareholders, who are basically therefore asked to vote on two possibilities:
    • Dilute your share value (say, from $7 per share to $5 per share) and continue losing gobs of money.
    • Cut costs dramatically so that the company will make money and, ultimately, the share price will increase, say from $7 to $10.

    There is one problem with your logic. What does the company receive from selling stock? That's right: Cash (technically, the stock could be issued for anything, such as the services of a new CEO, which isn't a tangible asset). What's cash? An asset. The value of a share is thus (assuming all shares are common; preferred changes a few things): (assets - liabilities) / numberOfShares.

    Assuming that the new shares are issued at the market value of the company at the date of offering, then there is no decrease in per-share values.

    However, the price of the offering shares is rarely the market price of the existing shares, because the price is fixed some weeks before, in the SEC filing. However, the share prices tend to congregate very quickly.

    This is obviously an oversimplification, but it is fundamentally true.

  • by Anonymous Coward on Tuesday February 20, 2001 @02:01PM (#416305)
    Jon Katz I hope... please oh please oh please....
  • But there's not much correlation between world domination and profitability. So linux servershare and mindshare continue to increase as linux-based business plans suffer. So we might see world domination coincide with utter commercial failure.
  • Third, unions cannot stop this from happening. These kinds of cuts are not about mere profitability, it's about survival.

    Especially when cutting off one's employees at the kneecaps is involved. It's about survival, man!

  • Is Slashdot, or the other cool websites Andover bought, being affected by this?
  • Think I got it: Vivi's Restaurant, 21731 Stevens Creek Blvd.

    I'll give it a try. Bless you.

    ----

  • by Alan ( 347 ) <arcterex@NOspAm.ufies.org> on Tuesday February 20, 2001 @02:15PM (#416310) Homepage
    On a serious note....

    Slashdot is owned by anover^Wva^Wwhoever, and it's owners (*wave* to taco and hemos) are paid from the .com pool of ca$h that have been sustaining a lot of companies for a while now.

    So what happens when that money runs out? Will /. still exists? Maybe this is a better question for Ask Slashdot, but I figure I'd post it here. If VA is laying off 25%, then the demise of the .coms is coming closer to home, and I'm wondering how this will affect /. and it's users.

    Will you guys (taco, hemos, cowboyneil, etc) continue on and try to scrape by with what you can get from t-shirts and banner ads, or will you go back to having a "real job" and doing /. on the side like in the old days? Will /. be immune to the .com deaths? I would have thought so, simply because of it's popularity, but if VA is cutting back, the the possibility exists. I wonder if the /. owners have thought that far ahead :)
  • yeah. this is a service company where the employees services are sold for profit. therefore they will have less employees to make more profit. good one.
    Who cares that some linux compnay goes under. Linux is free!

    And I don't think this was finance droids. Most likely this was greedy CEO and board members making sure their stock is worth shit by the time they can cash out. That's what it usually is.
    I'm going to go short VA linux.
  • I would guess that most of it would be looking at future sales. Most companies keep track of their orders and also have forcasters looking at the industry. I am guessing that their orders were down significantly, and their forcasters were saying that it isn't going to get any better soon. Also, if they are like everyone else in this industry they have way to much inventory for the demand that is out there. I really doubt that this will effect Slashdot as I am guessing that page views are not down, just hardware sales. I think that Slashdot is probably pretty self-sufficient.

    This really isn't a finance thing, more of a 'it does us no good to make a million of these things if we are only going to sell 10'.
  • You have to love a stock whose performance doesn't need a log chart to convey rate of change!
    LNUX [quicken.com] Or even better: CMGI [quicken.com]

    n3bulous
  • All this time I thought lay-offs were a form of "dot-com puberty" .... as in, your dot-com is in a little league until you survive the perils of puberty.

    Surprisingly, lay-offs are also a part of mid-life-crisis. as in the automakers, Nortel, etc.

    By inference, Microsoft has not hit puberty ... yet. Alternatively, it has passed the puberty stage, but just was simply a eunuch, and thus infallable (in the Survivor theme, was immune ...)

    gus.

    To play with the big dogs, you have to pee in the long grass.
  • by Anonymous Coward
    It seems like VA Linux got into this whole concept that supporting open source in any form was a good thing, but it seems like they've really overstretched their resources. Slashdot, Freshmeat, SourceForge, etc, all seem like great things but none of them seem to be in any way significanlty profitable concepts.

    I think VA had it's heart in the right place trying to be a one stop open source shop, but this may have a nasty side effect. What happens if they go down? What happens to all of these resources? In the long run they may end up doing more harm than good by dragging down a lot of the momentum behind open source with them.
  • One of the dangers of working for a publiclly traded company I'd say. When in doubt start your own company. It may be more work and more risks but you never get fired. Of course this only works if you can sell yourself and your product well. :)
  • The trouble is is that VA is a hardware company at the end of the day. And their selling point was their Linux expertise. But who were they selling to? The geek market is more likely to be making their own computers and installing their own distros. The large corporate market is likely to have their own staff that can deal with installing and configuring Linux...

    Right. This is why Sun should just acquire VA and spin off all the cruft. Goes nicely with their cobalt acquisition, and it would harness the VA linux expertise as well as slapping a well known brand on it that businesses could "trust" to build a system.

    So, what's "cruft" under that plan? Most everything cool, is the problem; OSDN would almost certainly go. And the thing is, I don't know if it can survive as a corporate entity without a benevolent behemoth sponsor (personally i think ibm would be better for that than sun). Maybe it should reform as a non-profit and charge a minimal hosting fee from the project coordinators? That would get rid of the script kiddies real quick!

  • by technos ( 73414 ) on Tuesday February 20, 2001 @02:18PM (#416333) Homepage Journal
    My ass. I've seen unions in action in the auto industry. There's a reason you really don't want a Pontiac built on a Friday afternoon, and that reason is the union.
  • by cruise ( 111380 ) on Tuesday February 20, 2001 @02:19PM (#416334) Homepage
    Who should be pink-slipped? ( ) CmdrTaco ( ) Hemos ( ) Timothy ( ) CowboyNeal

    Certainly this poll (as with most polls) is flawed. Only one choice? Axe the lot of them. Put in their place a hunk of code which takes stories off of The Onion instead. At least when you're reading those you KNOW they're bullshit.




    They are a threat to free speech and must be silenced! - Andrea Chen
  • Vivi's was a hole in the wall; they had falafels, but not gyros. Ended up just going to Uno's for lunch.

    So far the best place is on S. Bascom near the Pruneyard; I forget the name.

    ----

  • by FallLine ( 12211 ) on Tuesday February 20, 2001 @03:47PM (#416339)
    First, I really put very little thought into writing proper English on slashdot. I don't proof read for it here. The only thing I care about is whether or not I'm conveying my message clearly. When the grammar is so poor as to make that difficult, then I care.

    Second, you, and the vast majority of other users, know exactly what I meant.

    Third, irregardless is a word, albeit a colloqial and not entirely accepted word. Please refer to Merriam-Webster's dictionary [m-w.com] if you do not believe me. That is, incidentally, a little more than just "any" online dictionary, even if it is not quite OED. If you're reading slashdot, you're clearly more than willing and capable of reading broken english, never mind broken thought processes.

    Fourth, I am more than capable of writing proper english when I so desire.

    Fifth, if you're going to be a grammar nazi, please do yourself a favor and learn to spell grammar properly. Otherwise, the egg ends up on your face, not on your victim's face. Your comment is riddled with other flaws too. For instance, "meant" is the past participle and past tense of "mean", it simply does not fit in that sentence of yours.

    QED
  • Bad thing: I fell out of a plane.

    Good thing: There's a haystack right below me!

    Bad thing; It's got a pitchfork in it!

    -- Eat your greens or I'll hit you!

  • No, tim, these are not the big leagues. I would call, oh, IBM announcing a writeoff of a failed venture a beanball. Rambus was/is a beanball for Intel. MS Bob was a beanball for Microsoft. These would be isolated incidents for otherwise successful (profitable) companies. I'd say VA Linux has had nothing but beanballs even since that record-breaking IPO.

    Look at this story for the definition of spin, folks. Did VA Linux double their revenues last quarter? Absolutely. But at what cost? Their losses increased at almost exactly the same rate as their revenue -- within 5-10%. Sweet deal, huh? Thank god I don't own their stock.

    I'm sorry. I know how bitter I've come off sounding. I just get annoyed when someone with an obvious vested interest in the company tries to put a happy face on things when he also has a committment to journalistic integrity. Can't be fair? Don't post it, or go into PR. (This all springs from a couple failed start-ups following a career in journalism. Figures, huh?)

    t.a.f.

    obviously, I make the assumption that slashdot has an obligation to journalistic ethics. if you choose to argue with me, and I hope you will, please don't bother with that particular point, since I firmly believe that rob & co. qualify as journalists (and consider themselves as such when it suits them).
  • by strathmeyer ( 208375 ) on Tuesday February 20, 2001 @02:28PM (#416346)
    Sourceforge wasn't made by itself to make money (as well as Freshmeat,) they were made to increase the use of Linux (which they have done quite well,) so that VA can sell more systems.

    None of these internet companys are making any money... thousands of examples... but they'll give me a job!

  • First, the traditional work environment does allow for lay offs. Layoffs are expected whenever the numbers are not working out, especially when their are negative cash flows. In fact, most shareholders would consider management remiss in their duty if they did not.

    Second, VA Linux is not profitable and they have negative cash flows. Put bluntly, the shareholders money is paying for virtually all of the employees salaries. Irregardless of how much cash or assets they currently have on hand, they are finite. They depend on the shareholder, if they neglect them they will die.

    Third, unions cannot stop this from happening. These kinds of cuts are not about mere profitability, it's about survival.

    Fourth, the IT industry needs unions like it needs a bullet in the head. Unions have been shown to slow companies down, reduce customer service, innovation, etc. time and time again. Although there are a few rare exceptions, these are mostly with neutered unions, in very friendly environments.
  • by Greg Lindahl ( 37568 ) on Tuesday February 20, 2001 @02:42PM (#416352) Homepage

    When VA first went "underwater", I posted a
    "Ask Slashdot" when we were going to get the "Meditations on Sudden Poverty" essay.

    Too bad they never print any *interesting* Ask Slashdots...
  • You forgot something:

    expect
    &nbsp &nbsp failure();


    "Everything that can be invented has been invented."

  • by chrisd ( 1457 ) <chrisd@dibona.com> on Tuesday February 20, 2001 @04:03PM (#416354) Homepage
    Hi everyone;

    While it's not appropriate for me to comment on too many things, I wanted to address concerns about SourceForge.net and SourceForge onsite (SFOS). So basically, during the , uh, shuffle, VA has had to decide where people will be cut and which areas of thebusiness will be concentrated on.

    One of those areas is SourceForge and it's sister group, SFOS. SF and SFOS is super important to the future of VA from a bunch of angles. Dan Bressler, the product manager will be posting a reply to this note giving a brain dump on what's going on within. In short, SF has headcount and budget and we are looking to add staff on both teams. So that's the short post. Dan will post a more in depth piece. I wanted to get a place holder in for those who care about SF.

    I'll answer other questions if I can, but for many questions, the answer can only legitimately be given by Pat Fossenier, our investor relations person.

    Chris DiBona
    Linux Community Evangelist, VA Linux Systems


    --
    Grant Chair, Linux Int.
    Pres, SVLUG

  • by GuNgA-DiN ( 17556 ) on Tuesday February 20, 2001 @07:18PM (#416356)
    Looks like Cmdr Taco and Cowboy Neal are going to get a cut in the "toy budget". No more DVDs, no more wireless gadgets, and god forbid.. they might have to start paying their own cellphone bills. Quick do something!

    I know! Why not fire Jon Katz?!? He's a lazy no-good piece-of-shit dead weight anyway! Just tell everyone that if they can't right code to pack their shit and shove off!

  • yeah. this is a service company where the employees services are sold for profit. therefore they will have less employees to make more profit.

    Right. I'm sure that getting rid of Malda's personal masseuse really hurts the bottom line.

    Look, start-ups have a nasty tendancy to hit a point where they're suddenly overstaffed. It takes a lot of people to get things going, but there comes a point when things are up and running. Suddenly, the business finds that it can operate just fine with less staff -- the intranet is set up, the docs are written and just need small changes, the server farm is chugging away just dandy...

    It's not fair or pretty, but it's true. Besides, what good will it do anyone if VA Linux doesn't trim their fat? It's just stupid business, especially in a day where computer vendors have to struggle to stay alive (this isn't the market of 2-3 years ago).

    ----

  • I would like to hear from Rob on this but I'm guessing he took a big chunk of the cash that was paid for /. and put it in a house and a bank account. (He seems like the type to do this) and living in Holland odds are he has more than enough cash to get by for a *long* time. Also I've gotta think that /. is not doing to badly due to the number of page hits.
  • Take a look at this [yahoo.com]. VA's stock price seems to very closly follow that of Redhat's.
  • /me manually puts bullet in head.
  • by Jon Erikson ( 198204 ) on Tuesday February 20, 2001 @02:44PM (#416367)

    Vertical consolidation is a great move for any company looking to increase their profitability, but in VA's case it wasn't even really vertical consolidation, it was, well, "diagonal" consolidation if anything.

    It seemed at though they were attempting to go for prestige and "kudos" rather than a sound business model. They had absolutely no need to buy Andover - the two companies were in totally different businesses where the only tenuous link was Linux.

    The trouble is is that VA is a hardware company at the end of the day. And their selling point was their Linux expertise. But who were they selling to? The geek market is more likely to be making their own computers and installing their own distros. The large corporate market is likely to have their own staff that can deal with installing and configuring Linux.

    This left the dotcom companies as their target market. And given the fickle nature of the dotcom "revolution" this was always going to be risky. The growth period in internet companies is over, and VA are left with a smaller new market, and hence less potential revenue.

    Don't blame consolidation, blame a risky business plan. The reason we're seeing so many cuts is that they're attempting to cutback now and avoid even bigger cuts later. It wouldn't suprise me if they did try and sell of OSDN and move back to their core business.

  • I only wish I could see the smirk melting from ESR's face. What's his portfolio worth now?

    Seriously.

    I was genuinely happy to see Rob and Jeff get a big payday. They've created a fantastic site and they deserve wealth far more than any of the guys who started lookalike pet food or B2B sites.

    But the level of arrogance in the Linux world of 1999-2000 was just so out of hand that it simply had to get spanked. If you believe in karma in the original sense, there's no way the people shouting about world domination on the basis of some slipshod desktops and clones of Photoshop and Excel circa 1993 could continue to prosper without throwing the whole universe out of whack.

    Speaking of ESR, he and Bruce Perens are back in the news [newsforge.com]. Gee, with journalism like this, you wonder why OSDN is in trouble?

    By the way, the post about Bowie Poag is probably the funniest thing I've ever read here.

  • by selectspec ( 74651 ) on Tuesday February 20, 2001 @02:44PM (#416370)
    Of the 25% they fire from Slashdot, I hope the remaining staff takes a slightly new direction. I for one would like to see slashdot cut a bit of the "News for nerds" out and bulster the "Stuff that Matters." I am the worlds largest nerd, but I am tired
    • of three articles a day on Napster and P2P
    • of the latest stupid way to cram linux into something better suited to be a toaster oven than a computer
    • of three articles a day on why Open Source is the answer to the universe (we know it is already!)
    • of the same article posted three times in the same day
    • of links to 5 gigabyte video files
    • of lists of things that people are tired of
    • of goatsex [hanson.com]
    • of the lack of editorial review and a spell checker
    • of people saying Athalon instead of Athlon and saying 'then' when they mean the comparitive 'than'
    • of ten stories a day on some new stupid patent and why the government is collapsing next week because of stupid patents (we know already!)
    • of clever signatures.
    I'd like to see more of
    • Discussions on Enterprise computing
    • Discussions on Computer Sciences
    • Discussions on Kernel Architecture
    • Discussions on Memory Architecture
    • Discussions on Storage Architecture
    • Discussions on Mindstorms
    • Discussions on comparing linux distros
    • Discussions on comparing BSD distros
    • Discussions on CPU architectures
    • Discussions on real world Software, not some stupid script that's only merits are that it's free and the source is available.
    • Discussions on why Jarjar sucked (I can't talk about this enough)
    • Discussions on Fibre Channel being phased out for TCP/IP
    • Discussions on AMD's new 6Gps bus technology.
    • Discussions on the Possible Taxation of the Net
    • Discussions on alternative uses for windows 2000 cds
    • Discussions on alternative uses for AOL cds
    • Discussions on what's wrong with Cmd Taco
    • Discussions on why this is troll
  • by Bug2000 ( 235500 ) on Tuesday February 20, 2001 @02:02PM (#416371)
    Wouldn't it have anything to do with that [yahoo.com] ?
  • by PovRayMan ( 31900 ) on Tuesday February 20, 2001 @02:03PM (#416373) Homepage
    ...of slashdot.

    We don't need

    • -Jon Katz
      -Anonymous Cowards
      -Trolls


    Err, wait. That's about 80% of slashdot...
    ----------
  • by Anonymous Coward
    The good news: I sold my 100 shares of VA Linux the second day it was traded

    The bad news: I held on to the other 40
  • by ekrout ( 139379 ) on Tuesday February 20, 2001 @02:04PM (#416376) Journal
    Who should be pink-slipped? ( ) CmdrTaco ( ) Hemos ( ) Timothy ( ) CowboyNeal
  • I like that list, except for possibly:

    Discussions on why Jarjar sucked

    Definitely beating a deal horse there... But, there's more modification to the current content:

    • Less posting of stories without bothering to do ANY content checking
    • A little less hypocritical stories (daily outages of /. don't even get a 'whoops, we're having problems!', but God forbid MS's site goes down...)
    • A few less personal slams against the various companies mentioned in the posts - you know, if you don't like it, do like everyone else, and POST a comment inside the story!
    • (This falls in with the last one)Less MS bashing - you know, some of us actually *GASP* like some (not all) of the MS products :-)

    And on the positive side:

    • More interactivity with the /. readers - don't like a story / company / technology / etc.? Then step down here with us little people, and talk about it.
    • More FACT CHECKING!
    • More interviews! (some of these have been awsome!)
    • More brains when selecting which stories do and don't get selected for posting - it's like /. uses a randomize to determine which stories are posted!
    • More FACT CHECKING!
    • More stories that are geared towards discussion - I've seen way too many that were flamebait, or, didn't really have any way of producing real discussions!
    • More brainpower being used to improve /.!

    Heck, maybe it's even time to look over at Kuro5hin.org and see how things are done there to produce better conversations. No, not the article voting system - I'm talking about the articles themselves, the tone they are written in, and how the content is normally designed to create meaningfull discussion. (Of course, the fact the community it's self acts as a filter helps.) They don't get paid to write the stuff, and the quality is a great deal higher at times, and definitely contributes to meaningful discussion.

  • by seanmeister ( 156224 ) on Tuesday February 20, 2001 @02:06PM (#416382)
    Or perhaps this [excite.com]?


    Sean

  • by jon_c ( 100593 ) on Tuesday February 20, 2001 @02:09PM (#416385) Homepage
    I host my open source project on sourceforge.. as do a shitload of others. I knew when i signed up it wouldn't last forever, but i have a feeling that may be sooner then latter.

    Sourceforge itself isn't in a very good state right now, the statistics are broken, cvs breaks often, shell breaks often, the compile farm just went back online, the list goes on.

    I have a feeling its turned into the place where script kiddies can get a shell account to play around with, all they have to do is make up a project name, and set it's state to pre-alpha, or planning (as are a huge portion of the sourceforge projects)

    We all wanted to stock market to sober up, but i don't think we relized how and where we would feel it. Sourceforge IMIO (i=ignorant) was a reaction to the OpenSource(tm) hype of 99/00, it has absolutly no way of making money, and must cost a decent amount to run.

    Another site that might not make it till the end of the year is live365.com, they bassicly give anyone T3 bandwidth to anyone who wants to stream there mp3s. right now they seem to be scabbleing to make money, i don't think it's going to work out.

    -Jon

    Streamripper [sourceforge.net]

  • I got news for you, jerk: Blue collar workers are independent, intelligent people, too.

    ----

  • by Amokscience ( 86909 ) on Tuesday February 20, 2001 @02:46PM (#416390) Homepage
    SourceForge just ponied up $500,000 in upgrades and new equipment as well as triping the size of their staff... read what you will.

    The SF manager had this to say: http://sourceforge.net/forum/message.php?msg_id=11 0651

    and this regarding making money: http://sourceforge.net/forum/message.php?msg_id=11 1883
  • by Anonymous Coward
    Owner: We sell forbidden objects from places men fear to tread. We also sell frozen yogurt, which I call ``Frogurt''!

    Owner: Take this object, but beware it carries a terrible curse!
    Homer: [worried] Ooooh, that's bad.
    Owner: But it comes with a free Frogurt!
    Homer: [relieved] That's good.
    Owner: The Frogurt is also cursed.
    Homer: [worried] That's bad.
    Owner: But you get your choice of topping!
    Homer: [relieved] That's good.
    Owner: The toppings contains Potassium Benzoate.
    Homer: [stares]
    Owner: That's bad.

  • The economy is hurting everybody. I've been through 3 rounds of layoffs and the Linux company I work for. It is tough on the soul, even if you make the cut.
  • I can't speak for their current hardware, but at my Place Of Work, we had several VA boxes in during the summer of 1999.

    They were complete junk.

    The assembly of the machine was done with the combined skillset of a paper bag and manhole cover. You would open the box to see cables & wires, a complete mess. The cards in the motherboard were not, nor would seat properly.

    The VA guys are nice guys, they just had a 'novelty' product. The novelty has worn off.

    I'd rather have a Compaq DL380/1850R than one of those 2x2 or whatever POSs.
  • by elegant7x ( 142766 ) on Tuesday February 20, 2001 @02:48PM (#416395)
    does anyone remember this [slashdot.org] ESR post? How he pompously declared that, now that VA Linux had gone IPO at a huge value he was absurdly rich. At least about 30 million dollars. While that isn't absurd in the traditional sense, it's a ludicrous amount of money for such a pompous, talent less, wanker. ESR isn't a 'hacker' he's a hack. Of course, based on his inane randite ideology the more money you had the more 'valuable' of a person you are. Look here:

    Besides, it wouldn't be fair to dissemble. I serve a community. I'm wealthy today because my efforts to spread the idea of open source on behalf of that community helped galvanize the business world, and earned the respect and the trust of a lot of hackers. Larry thought that respect was an asset worth shelling out 150,000 shares of VA for.

    Right, and now that 150,000 shares is worth just a tiny bit over a million, and hopefully going less. Assuming he didn't flip the stocks at the fist opportunity. Which I guess was June. But oh well. The sooner that idiot leaves the public eye, the better.

    Amber Yuan 2k A.D
  • by Skyshadow ( 508 ) on Tuesday February 20, 2001 @02:09PM (#416396) Homepage
    Okay, so this means that one out of every four VA employees is getting the axe.

    So, as a responsible and long-time member of the Slashdot community, I feel it is my duty to open nominations for which of the Slashdotters should be going -- voted off the island, if you would. I figure they owe VA one sacrifice after they issue a pink slip to the obvious choice (coughKatzcough).

    I would like to place my vote for jamie, because he's got the same name as my ex-girlfriend (who dumped me rather painfully, I might add). That'll teach ya.

    ----

  • I didn't say to copy the content. In no way do I contend that needs to be done. I don't COMPLETELY agree with your opinon of what ends up on Kuro5hin, but, it does end up redundant bitching at times.

    What I meant was, the stories that DO go up there normally are designed to inspire intelligent discussion, and often do! /. could use a lot more of stories designed do the same thing. Looking at how those stories create discussion, and the tone of how they are written could give good insight into what could change to produce more positive results on /. I don't want /. to be Kuro5hin, and I don't want Kuro5hin to be /. If I did, I'd be reading one or the other, and not bothering to express my opinion on the other one ;-)

  • So VA Linux doubled its revenue, but it missed its loss projects by $.02/share. This necessitates a 25% cut. Can someone explain why? I've never understood the workings of finance-droids.
  • by Midnight Ryder ( 116189 ) <midryder.midnightryder@com> on Tuesday February 20, 2001 @08:37PM (#416399) Homepage

    Cool - nice to see you on here trying to put those who wonder in the know! But, this comment presents a problem:

    Anyway, hope this clears up any concern.

    Man, you must be kidding. Does that clear up the idea that SourceForge is going to loose a lot of people in the short term (IE, next 3-6 months)? Yep. Does that clear up the idea that in the longer term (1 - 2 years) SourceForge is going to have serious problem? Nope. I like the idea of SourceForge and all, but, it's still hard to see where all of this outlay is really getting VA it's money back. Sure, some of the projects get a fairly direct return back to VA when even nearly completed. But, take a look at the contents of SourceForge - very little of it really seems to apply. I mean, take a look at all those projects listed - a good number are half-ass thought out projects that are going to fail within the first two months because the creator of the project can't find people to help out or just plain old can develop the idea they came up with. Heck if I get another offer to join so-and-so's VB game project, complete with a link to a SourceForge project, I'm going to SHOOT SOMEONE! (Especially when I look, and there's not even a 'design' behind the game yet. *SIGH*)

    It's hard to see where that much, well... random crap that SourceForge is having to support in terms of bandwidth, storage, and support requests really do much to contribute to VA's business. I'd probably have more faith in it if there was an approval process or something - IE, users submit a written request for the privilage of hosting a project on SourceForge. Something that makes them stop and think about what they are doing, instead of letting SourceForge become the GeoCities of Open Source projects. For every good project like CrystalSpace3D, there's now 3 projects in the 'pre-alpha' stage with no chance of getting any farther.

    Anyway - I don't mean to sound like a troll or flamer who's saying it can't ever work, etc. Just pointing out what I've been seeing and have been heavily concerned about on SourceForge. On the flipside of those concerns, I think it's great that SourceForge exists, and provides access to a collaborative environment for Open Source developers with a minimum of hastle!

  • Hmm, prior attempt to post didn't seem to take....

    Assuming that the new shares are issued at the market value of the company at the date of offering, then there is no decrease in per-share values.

    Well, that would be true if they were going to keep the cash in the bank, but that's not why it's being raised. It's being raised in order to be spent. Thus, while shares are sold for cash (less the expenses of raising said cash, which are quite significant), it does result in dilution.

    The hope is that said investment will allow the company to invest it wisely and ultimately grow into a mature company that turns a consistent profit. However, growth is extremely expensive and it's almost impossible to grow significantly AND turn a profit. That's why we have IPOs in part -- to allow many investors to help take a company through that transition period.

    That said, growth can't be done just for growth's sake -- ultimately it has to result in profit, leading to increased assets and therefore increased equity.

    Unfortunately, what we've seen in the dot com sector and, to a lesser extent, the Linux sector is a lot of growth for growth's sake with little real business to back it up. In other words, there's been a whole lot of effort that's been misdirected and wasted.

    The reining in of the capital markets is simply a signal of "enough growth, show me the money." And a lot of companies haven't been able to do that. EToys, for example.

    However, I think VA is a much more solid company and will do just fine.

    _Deirdre

  • by PMcGovern ( 13300 ) on Tuesday February 20, 2001 @10:43PM (#416406)
    Hi, I'm the Site Director for SourceForge.net

    SourceForge makes money three different ways: Banner Ads, Corporate Sponsorships (such HP in the printing Foundry) and SourceForge Onsite where we install SourceForge Technology behind a companies Firewall.

    We see SourceForge as a way to both accelerate the growth and development of Open Source Software in the community and also generate revenue for VA by deploying the collabortive technology inside Fortune 100 companies.

    If you have questions...please feel free to contact me at "Pat AT sourceforge.net"

    Thanks.

    Pat-
  • I have to say, dude, that I would not like to be a "Community Evangelist" during a 25% downsizing. You might want to change it to "Marketing Manager", which is effectively what you are, and which doesn't look so glaringly like a waste of money when the bankers take a look at the outgoings a/c.
  • by deeny ( 10239 ) on Tuesday February 20, 2001 @02:49PM (#416411) Homepage
    So VA Linux doubled its revenue, but it missed its loss projects by $.02/share. This necessitates a 25% cut. Can someone explain why?

    The reason VA cut staff that much was that the cost of capital was very high. As my old finance prof said, "no one with any sense loans a tech company money." So, what do they do? They have to issue equity, which dilutes the value existing shares.

    Quick example: say I have 1M shares outstanding worth $5 each. I need to raise $1M. This means I can issue another .2M shares, which basically means, since the company has no more assets, that each share is worth 5/6 (1M old shares / 1.2M new shares) what it was before. That's what dilution means.

    This requires the permission of the shareholders, who are basically therefore asked to vote on two possibilities:

    1. Dilute your share value (say, from $7 per share to $5 per share) and continue losing gobs of money.
    2. Cut costs dramatically so that the company will make money and, ultimately, the share price will increase, say from $7 to $10.

    Let's say you own 100,000 shares of VA and that the vote is therefore: "Do I want my $700k investment to be worth $500k in a year or $1,000k in a year?"

    Any sane shareholder is going to say, "I want you to increase the value of my investment in your company." Right? Remember, the whole purpose of the company is to make the shareholders money.

    So that's why the layoffs.

    It's not a personal thing, it's just that they had to operate based on expectations. They were wrong. A lot of companies were wrong.

    _Deirdre

  • Yeah, sometimes employees must be LITERALLY sacrificed for the greater good. MMMMmmmmm, Leg stew. ;)
  • ...so that VA can sell more systems.

    The problem is, anyone can sell those systems, including Dell and Micron. Red-hat really seems to have a better bussness model after all.

    Amber Yuan 2k A.D
  • by FallLine ( 12211 ) on Tuesday February 20, 2001 @04:57PM (#416415)
    had to say it. ;)
  • by Legal Serf ( 18908 ) on Tuesday February 20, 2001 @05:01PM (#416416)
    Greetings,

    Given recent announcements, there have been a few comments expressing concern about the fate of SourceForge. I'd just like to say that SourceForge is here to stay.

    While SourceForge.net has been experiencing a few growing pains [The site grew by 20% during the month of January, there was a bit of staff turnover in the support area, there were a few technical problems associated with a server move to a co-lo at the start of the year], the project is actually planning for growth.

    Pat McGovern, Site Director, just hired a new Quality Assurance manager, just purchased $500k in new servers, and is actually looking to expand key staff areas like sysadmins.

    SourceForge OnSite, a subscription-based service where we setup SourceForge behind our customer's firewalls and provide integration, support, customization, training, and other services, continues to grow. (In December we announced Agilent as a customer. And last month, we won a "Show Favorite" award at LinuxWorld NY.)

    The SourceForge engine team, the group that builds the code powering the site, is planning for growth as well. So in the coming months, in addition to better support, our user community can expect better tools.

    Bottom line: SourceForge makes good business sense for VA. As a web site, it helps the community develop the software that drives our other lines of business. As an on-site service, it represents one of the true areas of VA's expertise (collaborative development), which is of tremendous value to our customers.

    Anyway, hope this clears up any concern.

    Thanks,

    Dan Bressler
    SourceForge Product <shudder> Marketing </shudder> Manager
  • jeez, I work for Veritas (reliably, boringly, predictably profitable for umpteen billion quarters in a row now) - and that looks like OUR stock chart.

    Face it, stock watching is an excercise in lemming-herding.
  • by account_deleted ( 4530225 ) on Tuesday February 20, 2001 @03:02PM (#416421)
    Comment removed based on user account deletion
  • by Shoeboy ( 16224 ) on Tuesday February 20, 2001 @02:11PM (#416424) Homepage
    One of the problems with the IT industry is the absence of unions to protect the workers. This allows management to get away with abuses that would be impossible in traditional work environments.

    I have it on good authority that VA is implementing it's 25% reduction is staff size by amputating all employee's legs at the kneecap. Clearly this is an abuse of the employer/employee relationship and we must do something about it.

    The IT industry needs unions to prevent further incidents such as this. In the words of Joe Hill, "Don't weep for me boys, organize."

    --Perdida
  • I have a much better chance of finding quality code on SourceForge than quality music on mp3.com. But that's not the point. Unlike mp3.com, which could do better without the dreck, SourceForge needs those pre-alpha-going-nowhere projects, because even failures can fuel ideas. And unlike bad music, bad code can at least form a starting point for good code.

    Years ago I was a Minix fan, and ran it on my 10MHz 286. I read comp.os.minix avidly and was pretty sceptical when this student in Finland announced that, because Minix's creator didn't want to extend it to work on 386's and support more of Unix, that he would do so, and was anyone interested in helping. It wasn't the first time someone had proposed this, and if someone had asked me I'd have said that he had little chance of success. After all, the GNU folks had already been working on such a project and had yet to succeed. I knew how hard it would be, and figured that the most this fellow would do would be to waste a lot of his time, and that of anyone else who decided to help.

    Of course, you know who that Finnish student was, and what happened to his project. But I doubt you would have given him any better odds than I did, and would have put him squarely in the "forever alpha" column.

    This is why SourceForge can't afford to be too choosy as to the projects they host. The bad ones don't take much space or bandwidth, anyway. Their challenge is to provide mechanisms for the better projects to achieve visibility, such that they don't get lost in the "noise." But it is from that "noise" that wonderful things may appear.

    -Ed

It is easier to write an incorrect program than understand a correct one.

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