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Interview: Larry Augustin Finally Answers

Roblimo posted more than 14 years ago | from the better-late-than-never dept.

VA 203

Yes, we know this is overdue. We put up the original Ask Larry Augustin post on Jan. 10, and here we are posting Larry's answers on the 27th. The first few weeks after an IPO are hectic for any CEO who is involved in one, and we understand this, but the wait has been as frustrating for the Slashdot staff as for anyone else, and there was nothing we could do about it. Anyway, finally, here are Larry Augustin's answers to your questions.

1) THE question
by Nicolas MONNET

Much like most net-related IPOs, VA's valuation is impressively high. Much higher than bigger and older companies which have proven to be able to actually MAKE money. So let's assume that this valuation actually means something. How do you see VA Linux fulfilling this promise, IOW, what will it be like when it will sell as much as its stock price mean? Will it compete directly with Compaq and the likes on the server market?

Larry:

We're building a serious company here and we plan to grow significantly, and I think our valuation reflects that. I think we are undervalued compared to some of the other companies out there based on the potential of Open Source and our target markets. The market opportunity is huge.

We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia.

As those customers grow, we grow with them. Intel estimates that only 5% of the servers needed to run the Internet by the year 2003 are deployed today. That's a huge market for VA Linux. That's where investors see the big potential.

But you have to understand more about what we offer those customers. On the surface, people think we're a hardware company. We're not - we're an Open Source company. We work directly with those customers to solve their problems using Linux and Open Source. We offer some of the most powerful high-density rackmount servers for the Internet server market as part of that solution. Since you mention Compaq, in at least two instances I know of VA engineers have rescued large installations using Compaq hardware. Although we offer the best hardware for Internet servers and will continue to do that, that's only a fraction of what we do. We have a tremendous amount of expertise in Open Source, and it's really that expertise that we offer to our customers, and you can see some of this in our announcement this week with HP. The systems side of the business really just gives us a solid platform on which to build a known, stable, and supportable solution for our customers.

So the one thing underlying all of our business is our commitment to Open Source. The computer industry is changing; Open Source is emerging as *the* way to develop software in the next decade. The companies that figure out business models that work around Open Source will succeed. At VA we will be the leader in Open Source. I've built a company with a commitment to Open Source at its core. I don't want us as a company to have any incentive to develop proprietary software. I'm building a company that succeeds if Open Source succeeds. That creates a business model where supporting Open Source development (through initiatives like SourceForge.net) are absolutely critical to us. We will be Open Source pure.

2) IPO Question
by jezzball

I know how you choose the people you picked as friends and family (being one of them), but were there any specific HOW-TOS you looked through? Did you weight projects? Is there a place where you've amassed this information for people to look at?

I was quite surprised myself at being picked, as several other people who I felt have contributed more than me weren't.

Larry:

Sometimes going second has its advantages. One of the pieces of feedback we had from the Red Hat program was that people in the developer community wanted to understand how their names were picked.

From the beginning we decided to create a process that was as mechanical as possible in extracting names of contributors Open Source projects in general and Linux specifically. Chris DiBona and Chip Salzenberg assembled a set of custom scripts that scanned for developer names. It's best if I just leave the description of that process to Chris.

Chris:

There is a lot more to this question, so this is a long one...

When it was clear that we were going to go public and we wanted to do a community program, Larry and Todd (Our CFO) asked me to start working on putting together a list of folks to target.

Since I got word pretty early (before the initial S1 filing). I wanted to plan for as much flexibility as possible, as I knew that while I would probably be in charge of administering the program that final say on who we wanted to help would be not just mine, but on the shoulders of Larry and others (like ESR, who is on our Board).

So I first got mirrors of Sunsite, gnome.org, kde.org and many other software repositories. I wrote a perl script to rifle through them and un tar.gz the source code therein. It worked out to about 11 GBs of files. I then ran an e-mail scanning script that Chip Salzenberg cranked out for me against the archives to pull e-mail addresses.

This netted about 17,000 e-mail addresses. Each e-mail address was stored with a reference to all files it existed in.

I then went through the list by hand and got rid of bad addresses. This included things like lug addresses, root@ addresses and corporate info addresses. I also removed known silly addresses (foo@bozo, billg@microsoft.com) and straight errors that got through (1024x768@75mhz and such). This brought the list down to 12,000 e-mail addreseses.

I set these addresses aside and began accumulating contributor lists for various projects including gnome, kde, cpan, debian and others. These when concatenated with the top 1000 addreses from the scanned addresses amounted to about 3500 e-mail addresses. Since our orignal target was to provide 2700 people with an opportunity to participate, we felt 3500 was an appropriate target.

We were wrong. About three days into the program, we realized that our returns were much less than anticipated. At this time I scambled to include more people, I took the next 1000 from the scanned addresses, the beta developers from SourceForge (another 950) and a bunch of people were added anyhow because we simply missed them (about 200 or so) We also realized that due to a glitch in the scanning process a chunk of the kernel credits list was missed and I added those folks and made sure they were notified. For the most part if somone had been in the kernel list, they had already e-mailed me personally and I had already added them.

Our selection process (including Sourceforge) meant that Open Source developers on other platforms were allowed in as well, which was cool by us as we feel open source benefits all platforms.

In the end we got to include about 1500 people from the community, when we realized that we were going to have more shares available in the community pool, we reallocated to allow people to recieve 140 shares. At this time our price had gone up to $30, so we allowed people to take part at the 50 share level if they still wanted to participate and didn't have the money for the full 140 or 100 shares. Someone on Slashdot suggested this, BTW.

Everything went very smoothly, and I'd actually like to thank everyone in the free software community. Why? Well, as many of us now know, the VA IPO was very hot, we had an astonishing number of people calling, e-mailing and visiting asserting that they were a community member, and we took all of them seriously as that's the right thing to do.

The reason I want to thank everyone is that, 99.9% of the time, we were able to tell right off if someone was legit if they were nice. For the most part, everyone we included in the program was nice, and everyone who was trying to get into it fraudulently was a jerk. It made it really easy, so thanks, I appreciate it and the folks at the Underwriters said that the folks in the community program were just about the nicest people they've had to deal with in any designated share program they can remember.

Also, to those who have done things in the free software world and were not given an opportunity to participate, I just want to say thanks for your hard work. We do appreciate it, but we were working with a limited number of shares and we had to stop somewhere, but this doesn't mean that we don't appreciate you or what you've done.

As a last note, we are -very- sorry we had to send such a huge e-mail out to everyone. A megabyte is a really big e-mail to get unexpected. The SEC was very clear on this, we were given the choice to send it out with prospectus and forms in a PDF format or not offer it at all. And since for 90% of the list all we had was e-mail address, this meant spamming a lot of people. In the end, I personally decided to do this, as I felt it would have been a greater error to not include free software developers in our IPO. So in essence I had to decide what was worse, spamming or exploiting the community. I chose to spam rather then exploit. I still feel bad for it, but I do feel it was the appropriate thing to do.

3) Prices
by FascDot

Every time I need to buy a computer (for self or business) I check out VA Linux Systems. But your prices are always $500-$1000 higher than even the Microsof-tax laden goods from someone like Gateway or Dell. Is this all due to volume discounts or is there something else at work?

Larry:

First of all it is not our intention to be the lowest cost source of a box. We're not just selling a box. Typically we're selling a great deal of service and support around the box, and in the end the customer gets a better value as a result.

But if you're just comparing box prices, it also depends on what you are looking for. We do competitive pricing comparisons weekly versus Dell, Gateway, and many others. We work very hard to make sure we are comparing similar configurations. We have some configurations in the server space where we consistently come in lower because we have products that are better suited to the customer. In other cases, we have configurations that are consistently higher. For example, our StartX MP dual processor desktop system has easily a lot more cooling and power than anything else in its space in the market. Frankly, the chassis and power supply are over-engineered for a dual Pentium III desktop. As a result, we look a lot more expensive when comparing products in that space; the quality is apparent until you open the system up and do things like thermal profiles inside the chassis.

Also, I don't think people realize that we do a tremendous amount of engineering on our products. Every disk drive is flashed to a known, qualified firmware level. We regularly work with disk drive manufacturers to fix firmware problems. We need to do a lot of qualification that a Windows supplier has already done for them. For example, we had an incident in November where we attempted to qualify a major name-brand memory supplier under Linux on one of the Intel server motherboards. We expected it to be easy because Intel and the memory manufacturer had already qualified the hardware under NT. Well, Linux is not NT. We could make the memory fail under Linux. In normal operation the error might show up as a system hang once every few weeks. That's unacceptable to us and our customers. We log thousands of hours of testing of every component and configuration before we qualify it under Linux. No one else does that.

4) The next step
by DarkRyder

Now that the IPO period is over, what directions do you see VA Linux moving in? Are there projects that have been placed on the back burner until the IPO could 'make it possible'? If not, have projects been undertaken, or put into the planning stages, that wouldn't have been if the IPO hadn't taken place? Or is this just a calculated business move, with no plans beyond simple, steady growth as a company behind it?

Larry:

As we said in our prospectus, we'll be using the net proceeds from our IPO to fund operating expenses including broadening our professional services division, hiring more R&D personnel, and expanding our sales operation worldwide (starting in Europe). Another important benefit from the IPO is the credibility it's given us as a company. A lot of prospective customers who might not have considered us before the IPO now look at VA Linux Systems as a company they know will be here over the long term. We're publicly accountable now, and we're focused on execution. It's a responsibility all of us take seriously.

5) Plans for other platforms?
by imac.usr

Specifically, the new PowerPC motherboards that some companies are planning to build...is VA planning any systems around these boards, or do you see a market for platforms other than i386 in your company's future?

Larry:

We're always looking.

6) Your view of Linux and the open source movement
by God I hate mornings

I've been watching with keen interest both Linux and the open source movement with great interest for the past few years. Now with anything Linux being the darling of Wall Street, it would seem all one has to do is mention Linux and watch the rush of money.

My question is this: How do you, personally, view your fellow Linux distributors? Do you see them as competition to be toppled? Or do you view them as competitors in a worthwhile cause?

Larry:

We are distribution neutral. I believe there is one Linux. We have pre-installed various distributions over time, and we're committed to supporting standards and customer preferences on this issue. Most of our customers don't really care too much; in internet infrastructure implementations, most people have very specific loads customized to their needs. We help them with that customization as part of our added value, and we pre-install the results. We often start from Red Hat, but based on customer demand we have also started making plans to offer standard Debian and SuSE based loads this year.

I can't remember actually competing with a distribution company for customer business. We typically partner with them. We put our competitive focus on counter- or quasi-Linux companies such as Microsoft, Sun and Dell.

7) Joint marketing effort?
by Floris

Watching all the little companies (and the not-so-little companies) that build and support Linux as an OS, I have been wondering about when we will see Linux commercials on commercial TV?

Some CEOs of Linux-related companies have said that their goal right now is to "grow the Linux market" rather than competition with the other vendors. The main competition would be Microsoft rather than each other.

However, Microsoft has a massive marketing machine at its disposal. The Linux vendors dont have nearly its marketing muscle. Are there any plans for a joint marketing effort to counter that?

Larry:

For practical reasons, we're not planning any TV ads. Most of our sales are to folks that buy based on information from other sources.

8) VA Linux Software Patent Intentions
by Aaron M. Renn

In your S-1, you mention that you have applied for a patent. Here is the relevant paragraph:

"Our systems consist primarily of commodity hardware components in combination with the Linux operating system. While we have developed some proprietary techniques and expertise, most of our activities and systems are not protectable as proprietary intellectual property and may be used by competitors, harming our market share and property, we generally enter into confidentiality or license agreements with our employees, consultants and corporate partners. We have also recently commenced a patent program and to date have filed one patent application. In general, however, we have taken only limited steps to protect our intellectual property. Accordingly, we may be unable to use intellectual property to prevent other companies from competing with us. In addition, we may be unable to prevent third parties from developing techniques that are similar or superior to our technology, or from designing around our copyrights, patents and trade secrets."

I realize you will not want to disclose the details of your pending patent application, but I am interested in knowing whether or not it is a software patent. And, what VA's policy towards software patents is, in general. Will VA apply for software patents? If so, how will they be licensed? Will they be made available on free software terms to free software developers?

Larry:

We have applied for a patent on the techniques we used in the design of our FullOn 2x2 high density rackmount server. We have some unique packaging technology there.

I personally believe the patent process with respect to software is broken. However, it has not been a priority because we have not applied for any software patents.

9) Intel influence behind the scenes?
by RelliK

A while ago VA Linux Systems (then called VA Research) used to offer Alpha systems. But soon after Intel's investment in VA, the Alpha systems disappeared. Last I checked AMD systems were not offered either (and don't tell me there is no demand for either Alpha or AMD). Intel is the *only* choice.

My question is: being a Linux company, will you continue to offer people a choice or will you, like Dell, become a slave to Intel?

Larry:

We dropped Alpha well before the Intel investment because we didn't have the resources to support Alpha and Intel on Linux. However, we're always exploring all of our options.

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203 comments

Patents and IPOs (2)

Kagato (116051) | more than 14 years ago | (#1330617)

Well, some of the questions were skirted (ie using PPC or AMD) but it's damned refreshing to see someone in a high possition say what we all know about software patents.

So many times I read "So and So has the legal obligation to share holders to patent software...blah blah blah..."

As far as sour grapes about not making the list...well, hey no matter what they do they will never make everyone happy. It's just not possible. At least they are making a try at it. Most IPO's only go to large valued customers at big brokerage houses. I.e. Not John Smith with the e-trade account.

It's called speculation (2)

Wholeflaffer (64423) | more than 14 years ago | (#1330618)

What we are witnessing in the Tech sector is speculation. People are investing speculatively for two reasons:

1. They expect future growth in the market sector (Linux Servers in this case), and expect companies with large market share today to retain that share in the future.

2. Everyone else is doing it.

Without the Tech sector, Wall Street is showing lackluster performance. We're to the point where the only way big, established companies can grow and increase profits is through mergers.

People looking for money grabs in today's market are jumping on board a massive roller coaster on its way up...and after it crests, it'll go down really, really fast, taking every stock owner along.

I own stocks through my employer's deferred compensation plan. I am nervous.

Re:What?!? (1)

um... Lucas (13147) | more than 14 years ago | (#1330619)

There used to be a time when companies were generally valued at 7-15 times earnings. As people have gained confidence, that level has been growing. And no, amazon didn't invent the whole valuation scheme. But it arose somewhere between Microsoft and Yahoo. Amazon was just there to ride the wave as far as it could.

The whole tech industry is suffering from over inflated stock prices. Yes. Suffering. Becuase once the bubble bursts, lot's of former millionaires will once again be mortal again. It's only a matter of time before the gov't puts the breaks on the growth trend we've been having for the past decade. And then what?

I'm not saying I'm smart. I'm just saying that Wall Streets insane. They're all hunting for the next Yahoo's, Amazons, or Microsofts... WHen they pump up a companies value, most companies don't realize it's because of traders and not themselves.

Let's see LNUX is 131 a share today.... Would you buy it at $90/share in 6 months? But you need to pay today. That's how shorts work.

No... I don't have the money to gamble on something like that. Sorry, but though the street seems to be sanening up, it's still much too insane for me to get into anything like.

No way... Amazon has already won (5)

Tim Behrendsen (89573) | more than 14 years ago | (#1330633)

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.

But the reason they have won is that they won the branding war (which is the only war worth winning). They knew that they had to spend giant dollars to rise above the noise of every clown598.com.

Say what you want about Amazon, but they have succeeded brilliantly in diversifying from books. In five years Amazon will be the Wal-Mart of the web.


--

no AMD at VA - sigh... (4)

TheGratefulNet (143330) | more than 14 years ago | (#1330634)

of COURSE it is due to intel's influence. intel is known to yank boards and chipsets if there's any sign of allowing choice in competitors boards and chips.

but that as may be, I was never in love with VA in terms of their customer-defined configurations. I tried several times to buy systems from them, but I did need to specify the motherboard I wanted used (I'm a system builder as well but I needed a totally built and warranteed system so that I could expense it at a previous job). they refused to even try to obtain that board (an asus mboard - which is hardly a step down!). and when I wanted to buy just a RAID subsystem (disks + controller + case) they would only sell complete turnkey systems (ie, it had to be a full cpu/ram/video/keyboard/etc system). and like I said, it was years ago before they went "big time" - I can only imagine there's less flexibility now than back then.

so my business always went with local system builders due to VA's inflexibility to work with me as a customer.

on the positive side, my current company does have a few VA systems and I must admit that their cases and fans were well selected. there is so much cooling in that system, that apart from a very expensive supermicro case or server cube, their system is the most ventillated one I've ever seen. but that was before they went all-intel - so I'm not sure what their current systems are like. nor will I spend the time to find out - there are many other system builders out there; ones that are willing to build to my spec.

at any rate, as a loyal linux advocate, I do wish VA well. for many customers, the level of service and customization is just fine for them.

--

Re:Why no AMD (4)

fastpage (125435) | more than 14 years ago | (#1330635)

VA Linux uses mostly Intel products. Intel motherboards, CPUs, and chassises (for their servers). I wouldn't say that is because of Intel influence but Intel offers better channel support for their products then AMD does. You can buy virtually whole solutions from Intel that "work out of the box". That statement is more true for their server products then desktop. Intel also has a fair amount of kick backs for their products. So everytime you sell a cpu/motherboard/chassis/ network card you get a kick back from Intel. Obviously this is factored into the price by Intel. Intel also offers free training to resellers big and small. They have an extensive web site for resellers. AMD is harder to support because you have to use a completely different motherboard. This is not saying AMD sucks or their chipsets suck but its that you have to do x2 work for another CPU. VA Linux only has the man power to test and validate so many products so they streamline them so its easier for them. I know all this for a fact because I use to work for a reseller that does many of the things VA Linux does. VA Linux isn't a hardware company because you can basically buy all of their components that they use off the shelf with a few exceptions I would guess. Check developer.intel.com and then look at the products VA Linux sells. If you buy from VA Linux you're buying into their Linux support/expertise as you might not get from another vendor like Compaq or Dell. I know this probably sounds like a love fest for VA Linux but I don't work for them nor have I ever bought anything from them (nor do I plan to). But its simply how things are.

What kind of consulting services? (1)

Duxup (72775) | more than 14 years ago | (#1330636)

Does anyone know what type of consulting services they provide to those companies?

Re:Put your e-mail address everywhere in your code (3)

chrisd (1457) | more than 14 years ago | (#1330637)

Hi,

I don't know about the other ipos coming down the pike, but with ours those email addresses were scored and hand checked before being added as backfill on the contributor lists.

As far as spam traps went, for those that bounced back with instructions, we followed them, but it was our experience that a small number of people actually missed out. Most people who felt they deserved being included and had super spam traps emailed me and we went from there.

Chris DiBona
--
Grant Chair, Linux Int.
Pres, SVLUG

Christians shouldn't use Linux anyway (0)

Anonymous Coward | more than 14 years ago | (#1330638)

It is my opinion (NOTE: MY OPINION ONLY) that Linux is not an appropriate operating system for Christians to be using in the first place. Therefore, one of the planks of your grand conspiracy joke falls through, and only the Holy Roman Empire is left standing! I think we can take care of the Holy Roman Empire. What do they have? Catapults? Roads? Oooh, we're doomed. :)

Re:Put your e-mail address everywhere in your code (2)

jezzball (28743) | more than 14 years ago | (#1330639)

As poster of the original question, I'll let you know that my name goes in the AUTHORS file (if in the ChangeLog, it gets there very frequently - more frequently than every file). My full name goes in the source to give credit where due, not to promote myself. However, it appears I was picked because of the SourceForge beta testers, of which I was one.

Jezzball
ls: .sig: File not found.

Re:DB Alex Brown (2)

cburley (105664) | more than 14 years ago | (#1330641)

I for one am very glad that VA chose Alex Brown, rather than the less fun experience I heard was had in Red Hat's share program.

Having been through both RHAT's and LNUX's IPO invitations, I certainly agree.

I'm sure RHAT, and those (LNUX et al) who would follow, learned a lot from that RHAT IPO. I hope E*Trade learned how to better, and more consistently, do things like manage their web site, answer questions, etc.

Dealing with Deutsche Bank (during the LNUX IPO) was delightful, and, IIRC, we always got consistent and correct information.

Prices (3)

Duke of URL (10219) | more than 14 years ago | (#1330645)

I know there was a question about the higher prices of VA boxes compared to other competitors (and I read it too). Sometimes appalingly higher. I'm wondering, is there anyone out there who has bought some VA servers and found that the added "services" touted make up for the price. Is it, or was it worth it to you?

Open Source mentioned (4)

asad (65703) | more than 14 years ago | (#1330648)

Was it really necessary to say Open Source 15 times in the first two answers ?

DB Alex Brown (4)

Matts (1628) | more than 14 years ago | (#1330650)

DBAB (now BT Alex Brown) were the nicest bunch of people I've ever dealt with over the phone. I honestly expected to be treated like a "newbie" to stock trading - and believe me I am - and asked some awfully naive questions... but they were all answered with patience and respect. I for one am very glad that VA chose Alex Brown, rather than the less fun experience I heard was had in Red Hat's share program.

Now if only my govt didn't want to take 40% back off me :-/

I defend Roblimo! (2)

FascDot Killed My Pr (24021) | more than 14 years ago | (#1330653)

When I didn't see Larry's interview at week one I was disappointed and confused. When I didn't see it at week two I was crabby and confused. When I didn't hear anything from the /. editorship I was also insulted. So wrote a comment about it.

Roblimo, (seemingly) alone among the /. editors reads the comments and responded to me with an apology. I accepted but suggested that the rest of the /. readership needed an apology as well. I'm assuming that his comments constitute that apology.

Well done, Roblimo!
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This comment powered by Mozilla!

return of the regime . . . (3)

Anonymous Coward | more than 14 years ago | (#1330656)

I hope you are like me and aren't taking this guy seriously. He, and VA Linux, represent a serious threat to the community. Just look at his name "Augustin". Now, the parallel that instantly comes to mind is that of the month of August. But we need to remember where that name came from. None other than the Emperor Augustus!!! The threat of the Roman Empire has resurfaced!!!

I'm not going to praise Christianity as a countermeasure to the Holy Roman Empire. After all, where is the Vatican, the "holy" capital of Catholosism? ROME FOLKS!!! It's not an alternative, it's a PART OF THE PROBLEM!!!!

This of course is not without precident. The Romans, as you know, practiced a rather stylized form of paganism. But even THAT wasn't theirs. They stole it from the Greeks, and just changed the names!!! A PR manouver copied time and time again.

The world has changed alot in the past 2000 years, but it is no less ruled by religion than it was. Only now it's not paganism or christianity that rule all business dealings and politics. It is of course scientology. The Roman threat does not represent an END to scientology mind you, it represents the ASSIMILATION of the religion we all love and hold dear!!! You will no longer be Ready to Receive the Knowledge after arduous training, all you'll have to do is PAY OFF THE RIGHT MAFIOSO. It happened to Medeterranian Pagans, it happened to the Catholics and it can happen to us too!!!

I'm not surprised that the next rise of the empire would take place from a linux company. After all, linux is driven by WORLD DOMINATION. Something wrong with this picture folks?!?!?! Look at this smarmy neo-roman; he doesn't even ANSWER SLASHDOT INTERVIEW questions in a timely fashion!!!

We must unite and assure the Church of Scientology does not not bow to Mr. Augustin and VA (Vatican Assassin) Linux. BOYCOTT VA!!! BOYCOTT THIS ARTICLE!!!! BOYCOTT THE WEST COAST OF THE UNITED STATES!!!! THEY'RE ALL PART OF HIS PLAN!!!!!

Why no AMD (5)

cgadd (65348) | more than 14 years ago | (#1330658)

I notice the AMD part of the last question was completely ignored.

I can understand the difficulty of supporting both x86 and Alpha, but support for the AMD (being x86) is much simpler.

The lack of AMD support would seem to be purely due to intel's influence.

Small Chance (2)

PG13 (3024) | more than 14 years ago | (#1330659)

The thing about the internet is that you have a huge new market opening up and everyone knows about it. Now just because of the way word spreads and the fact that people tend to do what there friends do in each internet sector some company will probably come to dominate, or at least split with a few others, the entire market. This means, if you believe internet sales are going to become a large segment of the market, that several companies are going to balloon to absolutely incredible sizes.

We should EXPECT to see new McDonalds and so forth. Small companies whose net worth climes drasticlly. This time Wall Street isn't stupid and everyone wants a piece of that company when/if it does grow huge. So in fact the companies may not be overvalued but they are EXTREMLY risky b/c they veyr well might not corner most of the market

Stock price should also be discounted for risk... (4)

Guppy (12314) | more than 14 years ago | (#1330660)

Oh really? When I was studying finance I learned that the value of a stock should be equal to the sum of a series of expected dividends plus the expected price of the stock when you sell it, all of which should be adjusted for the time value of money. In other words, stock values always have and always will reflect the future projected performance of a company. Amazon didn't invent this.

The stock price should also be discounted based on the uncertainty concerning the "expected price of the stock when you sell it". In the case of Amazon and similar stocks, this uncertainty is substantial. Add to this the fact that Amazon has no dividend (No +1 on your die roll), so that the current valuation is now based entirely on future expectations. The question is -- are these high-flyers sufficiently discounted to make the risk worthwhile?

Re:Christians shouldn't use Linux anyway (0)

Anonymous Coward | more than 14 years ago | (#1330661)

In your opinion, what operating system are we supposed to use?

Re:desktop market (2)

Wah (30840) | more than 14 years ago | (#1330662)

it's a profit margin thing. If you sell more expensive stuff, it's much easier to add a bit of padding. You might make more money with a larger volume and a tighter margin, but that requires a much larger manufacturing/distrubtion infrastructure. They are also a "service/solutions" company, not a hardware or software vendor. And Linux isn't ready for Everyman's desktop, yet (Mozilla will surely help), although the company that figures out how to make it work will make a killing.

Re:Why no AMD (1)

linux slacker (124381) | more than 14 years ago | (#1330663)

Hmm... I noticed that too.

He did say something like: "We'll keep our options open" in reference to supporting Alpha, which, in political business-speak means "We have no current plans, and probably never will - but thanks for asking."

It seems likely that VA must have some sort of deal with Intel - why else would they not move into the (presumably) easy AMD market?

service, schmervice... we just want the box. (5)

ryan_nelson (144817) | more than 14 years ago | (#1330664)

Larry wrote:
"But you have to understand more about what we offer those customers. On the surface, people think we're a hardware company. We're not - we're an Open Source company. We work directly with those customers to solve their problems using Linux and Open Source."

...that's just not true, at least not in the case of the *entire* list of companies he mentioned.

Specifically, at StarMedia, where i'm chief systems guy, we've got hundreds of VA's boxes racked up around the world... we *love* the hardware, and love VA's ability to get us another truck full of servers delivered really quickly...

...but we don't run linux on *any* of them. Like several other companies who've been challenged to scale *way* up, we run FreeBSD. On VA "linux" boxes.

i (and other members of my team) kind of resent outside companies talking about how we need their consulting help... it *is* kind of fun to get a "sorry, we don't support that" response from such an "Open Source" company... :)

...we're not so resentful that we'd stop buying servers from VA (did you get that last order, Larry?), we just want to make sure people know there's devil stickers on top of the penguins in our cage.

Re:Why no AMD (1)

Darkfell (21270) | more than 14 years ago | (#1330665)

not quite.

considering the ammount of testing that he
said they did with their componenets, i
would imagine that if they added yet another
processor family, and the whole host of
motherboards that are used to support that
processor family, the time invested in testing
and verification may not meet the expected
market. given the number of Athlon boards
and the combination of cards that work/ dont
with them its prob. not worth supporting
AMD until thing settle down a bit.

~darkfell

Best investor's resource: Bob Brinker (0)

Mayor Quimby (137099) | more than 14 years ago | (#1330666)

The best source of information I've ever found is Bob Brinker's radio program, "Money Talk." Bob Brinker is a genius and he is honest. He deserves the Noble prize in economics. I am continually amazed at the accuracy of his predictions and the soundness of his advice. His program is on Saturday and Sunday afternoon. Check out his site: bobbrinker.com for broadcast info.

Anybody agreee with me?

You can thank the SEC (4)

RebornData (25811) | more than 14 years ago | (#1330667)

I'm with a company that IPO'd last year, and the restrictions on what a public company can say are tremendous. Basically, they can't share substantive information with any specific group- they have to share it with everybody in the world at once. So, it's basically impossible for him to say something straightforward and specific about any future plans, until they're ready for "the announcement". It would be impossible for him to give a straightforward answer on AMD- clearly, VA supporting AMD would be a BIG DEAL, and he couldn't say anything about it one way or the other until it's official.

I guarantee that post was checked by a lawyer before it was posted here.

Re:What?!? (2)

sethg (15187) | more than 14 years ago | (#1330677)

On the other hand, James Suroweiki, in this column [msn.com] and this one [msn.com] , points out that not all Net-related stock values have enjoyed fantastic growth, and some have even gone down. (Including the price of Lucent, my employer, in which I have stock options. Not that I'm bitter or anything.) He thinks this proves that the Internet boom is not a bubble, since if it were a true bubble, investors wouldn't discriminate at all.

Back on the first hand, I recall seeing a paper by some academics in a finance department (sorry I don't have a link), demonstrating that companies could increase their stock value simply by adding ".com" to their names.
--
"But, Mulder, the new millennium doesn't begin until January 2001."

Capitalism vs socialism/communism (0)

Anonymous Coward | more than 14 years ago | (#1330678)

In your opinion, what operating system are we supposed to use?

Well, probably anything but Linux and the rest of its open source brothers and sisters. Scripture is fairly clear on this. God's law says that we are supposed to earn our bread with the sweat of our brow, and that those who will not work shall not eat. In other words, reward varies with work. Furthermore, God's law plainly says that you shall not either envy or steal what your neighbor has. In other words, private property is absolute.

We can therefore say, with a fair degree of certainty, that capitalism is the economic system that is mandated by God. It is also accurate to point out (in my opinion) that Linux and other OSS operating systems do not fall under the umbrella of capitalist ventures. They are far more suited to socialism and (in a benign, non-political way) communism. The distribution of source code to whoever wants it is exactly like the redistribution of wealth principle that modern socialists base their entire existence on. The Linux model defies God's law by insisting that no reward come from work (other than the "reward" that you're "helping" the fellow member of the "working class".)

Don't get me wrong; this is just my opinion. I believe that I will be sticking with Windows (and soon, Windows 2000!) but I would not dream to try to tell you what OS you should use. All I should point out is that there are some very well-defined issues here that Christians must confront if they decide to use Linux. I myself was a Linux user before these issues were brought up with me at a Circle meeting. I am not trying to attack Mr. Torvalds. As a matter of fact I think that he comes across as a very nice and likable fellow. I just think that he and his operating system are on shaky theological ground.

I beg to differ. (3)

FallLine (12211) | more than 14 years ago | (#1330679)

The original poster is somewhat mistaken, however LNUX is way overvalued by any traditional measure. They've got a market cap of 5 billion dollars and they're not even profitable yet. To justify these kind of valuations you have to have HUGE expected growth, but what do they have to justify these expectations? 5 Billion dollars is a hell of a lot of money to risk on one fledgling little company without any propietary technology (well almost) of their own. What they have is maybe a marketing position, but then you'd have to ignore the likes of Dell, Compaq, gateway, etc? And can you give me any good reason why VA Linux is in any better of a position to capture the Linux market share than say ASlabs?

Another point i'll make is that these investment banks and brokerage houses really don't give a damn how good a security ACTUALLY is. Whether you, the investor, win or lose money doesn't much affect them. They want to see maximum volume, that is how they make their money. It is in their interest in fact to keep their mouths shut.

My bet (and yes, they're a dime a dozen) is that these Dot Com stocks go the way of the Bio Tech stocks of the 80s and 90s, from RedHot to the plague in 1 second, I suspect within the next year or two. No one is going to want anything to do with them. The real shame is that while these stocks Dot Coms are redhot, they push many more legitimate companies out (e.g., VCs now have a totally unrealistic time frame/turnover and growth (not real growth, but valuations rather) expectations with the Dot Coms). And when they finally plummet, the more legitimate Dot Coms that eventually emerge will find it very very difficult to raise capital. I'm counting the days....

Re:desktop market (0)

Anonymous Coward | more than 14 years ago | (#1330680)

Your forgetting that most Linux users are smart enough to put their own boxes together. Your also forgetting that most Linux users pick and choose everything they want in a desktop - most people aren't happy having everything set up for them. I'm not.

Re:No way... Amazon has already won (2)

sethg (15187) | more than 14 years ago | (#1330682)

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.
And if they do that, how long will they make a profit, before a competitor with more aggressive marketing and infrastructure takes over their market share?

"I can pay off my credit cards any time I want. All I have to do is sell my car and hitchhike to work instead...."
--
"But, Mulder, the new millennium doesn't begin until January 2001."

(2.) It's called the "Greater Fool Theory" (1)

Guppy (12314) | more than 14 years ago | (#1330683)

2. Everyone else is doing it.

In that case, it's no different that speculating with Beanie Baby or Pokemon cards -- as an investment, its value depends on you being able to find a "Greater Fool" to buy it from you.

Of course, the whole idea of currency depends on a similar abstract concept, that someone will give you soemthing desirable for that piece of paper. And we've seen that currencies can suddenly and completely collapse when they become disconnected from that expectation of value.

Spec your system here (2)

jabber (13196) | more than 14 years ago | (#1330684)

To spec your system, try Falcon Northwest [falcon-nw.com] . Granted, they're primarily gaming-oriented, but they build the machine to your specifications. I don't know if they're willing/able to build a high-end business system (a'la RAID), but they're a resource.

Expect to pay a premium for the individual attention though. It's someone's time, not another unit off an assembly line.

Re:How Not to Drop Names (2)

dsplat (73054) | more than 14 years ago | (#1330685)

If you're trying to endear yourself to Slashdot readers, perhaps you shouldn't emphasize your ties to eToys and DoubleClick this month. Eh, Larry?

He's being honest. Yes, many Slashdot readers are annoyed at DoubleClick this week. Yes, many of us think it took eToys rather long to get around to doing the right thing. Both of them are potentially very lucrative longterm customers. And if they perceive the open source community as both a supplier of choice and an outspoken portion of their market, rather than a pack of rabid dogs, they would probably be flexible enough to listen to us. For all I know, they read or were told of the discussions here and elsewhere and rethought their strategies as a result. Let's not criticize Larry too harshly for telling us the truth. I vastly prefer uncomfortable truths to lies and evasion.

And speaking of uncomfortable truths, I will join the growing number asking that the AMD portion of the final question get answered. I'd be happy to accept valid business reasons for making a business decision. I just don't like the impression that the question was ducked. I don't think that was the impression he intended to give.

Re:Why no AMD (1)

jimiZ (42759) | more than 14 years ago | (#1330686)

I agree that the lack of AMD support is probably from an Intel influence. I have no problems with intel, however for a company to push "Open Source" why not have an open mind with chip selection.

It seems to me that he skated the question. It is possible that with the use of AMD the price gap may drop.

Re:service, schmervice... we just want the box. (2)

Cellechan (127669) | more than 14 years ago | (#1330697)

here, here! As one of Ryan's colleagues I can attest to that, VA hardware rocks, but FreeBSD is what we use. Its not that we're OS bigots. Its the fact that FreeBSD handles the job we need it to do, where linux doesn't and wouldn't.

Long Live Chuck!

Re:Open Source mentioned (0)

Anonymous Coward | more than 14 years ago | (#1330698)

It's not like we're little Open Source Smurfs here

BUt did you OpenSource the Open Source with the Open-Source?

Re:Stock price should also be discounted for risk. (2)

FallLine (12211) | more than 14 years ago | (#1330699)

I basically agree, however one minor point: dividend's alone to not comprise a companies intrinsic current value. For example, if Amazon had 50 billion dollars in cash and other liquid assets, with no debt, it would be very difficult to give them a valuation much lower than 50b, completely ignoring future earnings. Furthermore, most every high growth (tech mostly) company doesn't issue dividends, because they're supposed to be reinvesting those retained earnings. That being said, I think Amazon is way way overvalued valued.

PS: Are you the guppy I know?

Listen Up (3)

Rabbins (70965) | more than 14 years ago | (#1330700)

I agree and disagree:

Amazon did not invent these valuations, and neither did Microsoft or Yahoo. This same exact speculative bubble has risen around every new medium invented. You name it... from spices to the ol' tulip bulb mania to railroads to cars to telephone to catalougues to radio to TV to one of the most recent: computers.

How many people remember how many computer makers there were in the early 80's?

I remember a few... how about Apple, Atari, Burroughs, Coleco, Columbia Data Systems, Corona Computers, Delta Data Systems, Digital Equipment, Eagle, Franklin, GRiD Systems, Hewlett Packard, Hyperion, IBM, ITT, Kaypro, Mohawk, Data Sciences, NCR, NEC, Olivetti, Osborne, Sanyo, Seequa, Sunrise Systems, Tandy, Televideo Systems, Texas Instruments, Victor Technologies, Xerox and Zenith.

Most of these companies are not in the computer business anymore, and many of them are not in *ANY* business at all. Yet, they were all trading at hundreds of times earnings (if they were earning anything at all) at one time.... Because computers were going to change the world. Sound familiar to anything we are seeing today?

Also keep in mind that some of the most succesful computer makers today had not even come into existance during this hotbed of speculation... Dell and Gateway for instance. First is not always happily ever after.

The internet will change the world. But make no mistake, it is a speculative bubble right now. It will burst. Some will make it, but the vast majority will fail and be replaced by ones yet to come. At some point, stock price *will* equal the actual performance of the company... it always has, it always will. Because after all, you are actually owning a portion of that company with your shares.

Ever read about the 20's? Ever read about the late 60's and early 70's when the so called "Nifty 50" (the majority of them, technology stocks) lead the market to all time highs and were thought unstoppable? Well, in 1972 they were stopped... and they were stopped for the next 10 to 20 years (some have still not recovered).

I choose to invest in companies that have proven they can perform and thrive in tough markets and have great oportunity for growth well into the future. The internet is a fool's market right now, and the majority of the fools will get burned. Just pray that someone is dumber than you when you sell your shares.

Re:DB Alex Brown (2)

dillon_rinker (17944) | more than 14 years ago | (#1330701)

If my income was high enough that the govt wanted to take 40% of MY income, I wouldn't be complaining. Or was that a humorous exageration? It's been a rough morning and I may be humor impaired...

No PIIIs in February (2)

autechre (121980) | more than 14 years ago | (#1330702)


Intel has stated that they will not be able to supply ANYONE with P-III CPUs in February (check TheRegister). What will Dell and VALinux do then? VALinux may actually be OK, since they aren't super-high-volume in sales, they may actually have enough parts in stock to cover it (their prices may also be an indication that they stock up, rather than buy only as much as they need to stay with falling prices as tiny computer OEMs do).

Re:What kind of consulting services? (0)

Anonymous Coward | more than 14 years ago | (#1330703)

Well, if he's smart, he'll say the consulting consisted of the following professional advice: "Don't do it!"

The shareholders will not win (2)

Rabbins (70965) | more than 14 years ago | (#1330704)

Amazon is still grossly overpriced however. Even if what you say is right, and the first company to assert its brandname will succeed; Amazon needs to completely run Borders and Barnes & Nobles out of business to realize the price of its "future growth". If you buy Amazon right now... that is what you are betting on. Good luck.

Lets not forget a cheaper price is only a "click away".

Re:no AMD at VA - sigh... (1)

tytso (63275) | more than 14 years ago | (#1330705)

I was never in love with VA in terms of their customer-defined configurations. I tried several times to buy systems from them, but I did need to specify the motherboard I wanted used (I'm a system builder as well but I needed a totally built and warranteed system so that I could expense it at a previous job). they refused to even try to obtain that board (an asus mboard - which is hardly a step down!).

Sure, you can ask a local screwdriver shop to install whatever motherboard you specify. But are they going to support it afterwards? Will they do thermal studies on the motherboard to make sure it's being adequately cooled in that specific chasis? Will they have done enough testing to be sure that there aren't any BIOS upgrades necessary for Linux to work as smoothly as possible? Can you call them on the phone afterwards when something fails to work, and expect them to service it appropriately? Or will they just say, "if it boots Windows, it's OK; now go away!"?

It's awfully hard to do all of these things if you allow the customer to specify what motherboard to use, what disk to use, etc. If you want that kind of flexibility, and are prepared to go it alone when things don't work, then it may very well be that a local screwdriver shop is a better fit for the kind service that you're looking for.

Re:What?!? (2)

Dudemar (102196) | more than 14 years ago | (#1330706)

This is happening everywhere. It's the way of the world. CEO's are paid huge salaries and stock options to join a company based on future expectations. First round draft picks are paid huge salaries and bonuses based on future expectations. Sometimes they turn out like Peyton Manning and sometimes they turn out like Ryan Leaf.

Whoa... moderate this up. (0)

Anonymous Coward | more than 14 years ago | (#1330707)

This is one of the better rants I have seen in a while. People really do need to wake up and realize some of these things. Has history ever taught us anything? Just maybe.

Re:Stock price should also be discounted for risk. (0)

Anonymous Coward | more than 14 years ago | (#1330708)

Depends. What guppies do you know?

insert Marge Simpson "Mmmmmmmmm" here... (0)

Anonymous Coward | more than 14 years ago | (#1330709)

[imac.usr, logging in from a machine that doesn't support cookies]

Well, sadly, my question about PPC went unanswered. Having researched VA a little more since posting that question, I must say it would be nice to get a VA box with a PowerPC board and all the rest of their bits.

Then again, it would be even cooler to get a PowerPC box from these guys [alienware.com] instead....

Someone who disagrees with you... (0)

Anonymous Coward | more than 14 years ago | (#1330710)

Market Strategist Abby Joseph Cohen disagrees with you - check this wired story [wired.com] for details.

Ms. Cohen is a very highly respected, and highly influential stock market forecaster, and she says that all tech stocks are undervalued!

Of course, the fact that she makes money off overinflated stocks, and probably isn't the most impartial observer of this, has nothing to do with her views, I'm sure.

I hope when you read the above, you will take it with the amount of sarcasm I intended... while there is someone who disagrees with you, that person certainly isn't me.

Re:Listen Up (3)

Rabbins (70965) | more than 14 years ago | (#1330711)

Ahhh... but you only go on to further prove my point with the nifty fifty. Yes, non-tech companies such as Philip Morris, Coca Cola, Pepesico, Pfizer and General Electric were all in that group, BUT they (being non-tech companies) were the ones that fared best over the next decade.

The ones that fared worst were the tech (and they were high-tech for the 70's too) companies, such as Burrough Comp., Polaroid, Digital Equipment, Eastman Kodak and Xerox.... these were the companies that were selling at the highest valuations (their futures were though to be the grandest). They got creamed the worst.

As for a portfolio of all the computer stocks listed above? I have figured it out. Sure Compaq and Apple did extraordinary. But the combined average annual return for that entire portfolio comes to a fraction over 2% per year. Hmmm... that is not so impressive.

The point is that you stay out of such a speculative market.

VA vs. Cheapo (1)

Byteme (6617) | more than 14 years ago | (#1330712)

Anyone know what the deal is with these cheap Linux boxes at Onsale [egghead.com] ? Has anyone bought one of these, or know how they compare to the VA systems? I do not want support... just a cheap box.

Who are you talking to? (0)

Anonymous Coward | more than 14 years ago | (#1330713)

Based on where you attached your post, it's not clear who you're replying to.

Re:DB Alex Brown (1)

modred2 (75524) | more than 14 years ago | (#1330714)

I believe that proceeds from the sale of stock is consider a capital gain which, I believe, is taxed seperately from the rest of your income. The tax rate for sales of stock held for a short amount of time do indeed approach 40%.

Purpose (1)

NoWhereMan (3539) | more than 14 years ago | (#1330715)

I saw value in the original question because of the confusion over how people were selected. It seems like there now is confusion over the purpose of an email address. You may Sigh!, but suggesting credit == email address seems shortsighted.

A number of people expressed their surprise about being included. There were various motives for participation. While a simplistic view might hold that IPO == credit, I prefer to think of my email addresses as a means for contacting me. Heaven forbid we might exchange valuable information ;-)

Platform testing for software (1)

blixco (28719) | more than 14 years ago | (#1330727)

I think the statement regarding the testing procedures VA uses vs the (implied flawed) testing that MSFT uses to certify a platform is unfair. The testing process doesn't end at certification for most manufacturers...granted, certification is a big part of testing, but the platforms undergo more than just the microsoft HCT or novell test kit. Where I work, we devote most of the platform lifecycle to testing. Forget hundreds of thousands of hours....some common components have undergone testing for longer than VA has been around. We're *very* serious about platforms being more than capable of a 99.999 uptime percentage.
The fact that you use heavier parts, bigger cables, larger capacitors, and more cooling is nice, but don't discount other manufacturers. Our linux testing is intense, ongoing, and (in my opinion) the toughest in the industry...and it's the same testing that we do on our NT and Novell platforms.

Humor vs. madness (0)

Anonymous Coward | more than 14 years ago | (#1330728)

Whew. This is a very subtle troll. ( Or do you really let your emotional cloud gazing and the conmen it draws to you drive your choice of OS? I'm impressed that I can't tell.) I await further replies with interest.
-the Mgt.

Re:Jeez, Roblimo! (1)

Freedent (84485) | more than 14 years ago | (#1330729)

Just curious here, but do you read the same Slashdot page that I do?

Mine's at slashdot.org, and the only thing it has in common with impartiality is the a, the t and the r.

Cheaper than a Compaq box (2)

A nonymous Coward (7548) | more than 14 years ago | (#1330730)

I bought a dual PII box a year and a half ago, and to my surprise found a similarly specced Compaq box (NT of course :-) which was MORE expensive, by $500 or so, 3 months later. Not exactly the same equipment, but very close.

--

Re:no AMD at VA - sigh... (1)

TheGratefulNet (143330) | more than 14 years ago | (#1330731)

Sure, you can ask a local screwdriver shop to install whatever motherboard you specify. But are they going to support it afterwards?

for me, specifically, that's not an issue. I just need warrantee support if the hardware stops functioning. I never would go to VA for software support - usenet is quite good enough for me. I've survived this way for over 5 yrs now (I started with linux in the 1.1 days). and if usenet or deja doesn't have a quick answer, I am a sofware engineer so I can Use The Source(tm). yes, I admit, I'm not the typical VA customer..

BIOS upgrades necessary for Linux to work...

linux doesn't use much of the bios, so this is a non-issue.

Can you call them on the phone afterwards when something fails to work, and expect them to service it appropriatel

the local shop that I patronize has helped me out many many times. they answer questions on the phone much better, will get stuff that I need - even if they don't stock it normally, will be quick to help get a unit serviced, and have sat/sun hours as well ;-) so as long as I can handle the linux end myself, the vendor just needs to handle the hardware end. and they do - perhaps better than VA.

--

Re:No way... Amazon has already won (2)

Tim Behrendsen (89573) | more than 14 years ago | (#1330732)

And if they do that, how long will they make a profit, before a competitor with more aggressive marketing and infrastructure takes over their market share?

Well, no one said it was easy to stay on top. The point is that once they have built their brand and have diversified their product lines to a sufficient extent, they can dial back a lot of these expenditures. It's extremely expensive to launch new product lines.

I mean, you make it sound so easy ... just use "more aggressive marketing and infrastructure to take over the market share". In practice, it's not that easy. Ask competitors of Wal-Mart (or Microsoft, for that matter).

By the way, it's not as if Amazon is hiding any of this strategy. Read their financial reports.


--

consult what?! (5)

firestarter666 (144887) | more than 14 years ago | (#1330733)

Larry, I do not appreciate your false statements that VA Linux provides consulting services to StarMedia.

As Ryan Nelson, my most senior sysadmin, points out, we do love your hardware immensely, as it suits our purposes well. However, the fact of the matter is that we use FreeBSD, not Linux, which is not where VA's business is focused. As such, we have really not had much involvement with VA outside of ordering hardware, as your team does NOT have the FreeBSD expertise that we require.

In fact, perhaps the only consulting that has taken place was with MY team consulting YOUR team on alternate hardware components to replace those pieces of the host which have no supported drivers under FreeBSD, thus enabling us to continue to use your hardware to meet our needs. Yes, we were offered additional help in developing a FreeBSD driver for the unsupported hardware, for a serious premium.

If you were truly committed to Open Source, you would offer to develop drivers for other popular free Intel-based Unices without any type of monetary demands. This would, in the end, help you as well, as members of other communities outside the Linux community would turn to you for their hardware needs, thus driving your business further among competitors.

Don't get me wrong, I love Linux, and in fact use it at work and at home for my desktops. However, it should be noted that for large-scale operations, Linux does not always meet the requirements, and I would think you'd like to corner the market on these large-scale operations as much as possible.

Sincerely,
Adam Firester

AMD Dodge... (2)

Tower (37395) | more than 14 years ago | (#1330735)

Well, the AMD question was really answered in the earlier answers, if you look at it. If they have to test everything, right down to the memory chips to make that everything is fully linux stable, then the testing of (still immature) Athlon motherboards is going to take a lot of time, manpower == $. Not to mention that there isn't a dual-proc solution out the for the Athlon yet - I want one, though 8^) The BIOSs for the majority of the Althlon boards could be better, and with the history of the BX chipsets compared with the ever-revisionizing (not a word) AMD chipsets, you have to look at it as a Good Buisness Decision for right now. In a while, things might become as stable, but the number of things to retest (every card, memory stick, etc) with a new board would be quite cost prohibitive...

Re:desktop market (1)

Signal 11 (7608) | more than 14 years ago | (#1330737)

You're not Wah! =)

Yeah, I know. I'm just saying the CEO said there was lots of market opportunity... but why is he focusing on such a small part of it? I think his shareholders ought to be asking this question!

Re:Capitalism vs socialism/communism (0)

Anonymous Coward | more than 14 years ago | (#1330739)

I just think that he and his operating system are on shaky theological ground.

I've heard people complain about "religious OS wars", but this is ridiculous.

What?!? (5)

um... Lucas (13147) | more than 14 years ago | (#1330747)

He feels they're UNDERVALUED?!?

No. VA Linux, just as every Linux, .com, software, hardware and tech company are grossly overvalued. Really. There used to be a day when companies were valued based on their actual performance. Amazon suceeded in corrupting that definition so that it included their future performance.

Now, every company out there seems to believe that they should be valued based on what they think they can do rather than what they are doing now.

It seems that IBM is about the only tech company that's valued anywhere near the levels it's revenue would reflect if it were in any other industry. They actually trade a lower PE ratio than General Electric.

I mostly liked everything else he had to say, but due to the order of teh question, i was set off by him. Build a company. Get the sales. Get the PROFITS. Then you'll get your valuation. Any other order is just insane.

Bitter much, Rob?! (1)

Anonymous Coward | more than 14 years ago | (#1330748)

That intro seems awfully harsh. Larry doesn't answer to /. any more than Roblimo answers to VA. Larry would probably like to spend his few free moments a day with his wife and kids; cut the man some slack. And get over yourself.

Advertising Linux (2)

Flat Feet Pete (87786) | more than 14 years ago | (#1330749)

I'm fairly sure I've seen an advert for SuSE on the side of a black cab near Holborn (Central London). Is this kinda thing common elsewhere?

Maybe part of the problem is that net based advertising targets the desired audience more precisely.

market-talk (2)

mjankows (21230) | more than 14 years ago | (#1330750)

I guess when you convince the wall-street clowns that your company is worth its weight in gold, you get to talk like some sort of highflying marketing fool. Larry doesn't need to sell VA to the slashdot audience, he needs to let us know they're not gonna be screwing us over. IMO, that post did the contrary, and they've already "sold out"....


Re:Prices (4)

technos (73414) | more than 14 years ago | (#1330753)

For someone who is looking at a 100% uptime box it does make a difference.. And Augustin is right, they overengineer to death! Powersupplies often double the required wattage, extra case fans, fans on the drive rails, cable routing clips, bigger heatsinks, hi-grade cables, and everything burned way beyond norm. If you can deal with slight interruptions like bad cables, memory error, don't buy VA. But I can honestly say the party that uses that VA is oh so very happy with it..

MODERATORS: Don't fall for this guy! (2)

Stiletto (12066) | more than 14 years ago | (#1330755)


Check the so-called-CNN link before you moderate up. He is a TROLL.
________________________________

major sites on the Internet like eToys, (1)

Anonymous Coward | more than 14 years ago | (#1330759)

"We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia. "

oops. :)

Limitations (3)

sallgeud (12337) | more than 14 years ago | (#1330764)

I can't imagine why a company would want to limit itself to Linux. This is not to say that Linux is a bad OS...

Limiting yourself to one OS seems almost hyppocritical. Throughout history OSes have fallen, others have rise, and still some linger in the background. By limiting yourselves to only one OS, you're doing the exact same thing you hated the big boys for doing... (only carrying microsoft). I love the idea of providing a higher level of support, and think that it will be the one clear advantage that VA Linux will have... but this advantage is no good without some sort of flexibility. For all we know, what is OS X today could become the next major OS, running on all types of machines, while OpenBSD may be preferred by customers looking for the highest level of security and cryptography.

Naming a company VA Linux is like Dell calling themselves Dell Windows... it's silly and limits your scope of sales.

oh fuckin' well, just my $.04

Re:Listen Up (2)

Rombuu (22914) | more than 14 years ago | (#1330765)

Likewise I both agree and disagree with what you posted.

First of all, I think a portfolio of the stocks you listed (not that all of them were ever listed as companies, Atari for example) would have done pretty well. There are enough winners on the list to take care of the underperformers. Granted, putting your whole wad into one of them woudl be risky, but thats true today and someone who does that deserves whatever they get.

Ever read about the late 60's and early 70's when the so called "Nifty 50" (the majority of them, technology stocks) lead the market to all time highs and were thought unstoppable?

Hmmm... The nifty 50 I'm thinking of had companies like PepsiCo, McDonalds, Phillip Morris, Avon, Coca-Cola, Polaroid, etc.. Granted, I belive IBM and AT&T were in there too, but the Goldman Sachs Ecommerce Index, it ain't.

I choose to invest in companies that have proven they can perform and thrive in tough markets and have great oportunity for growth well into the future.

Good strategy... Warren Buffet would approve. I agree as well.

The internet is a fool's market right now, and the majority of the fools will get burned.

Hard to say... you only need one or two winners of MS or Oracle like proportions to make up for quite a few tankers.



No Windows Policy? (0)

Anonymous Coward | more than 14 years ago | (#1330766)

I read that there is a 'no windows' policy there. I wonder if that's true... that would be cool, but it might be difficult for sales/marketing folks.

Re:Stock price should also be discounted for risk. (2)

Rombuu (22914) | more than 14 years ago | (#1330767)

Yeah, I forgot to put the risk premium in there... what can I say, its been a few years...

I will also grant that the formula is kind of useless for companies that don't issue dividends and have no plans to do so. As for this:

The question is -- are these high-flyers sufficiently discounted to make the risk worthwhile?

Well, thats the big question, isn't it?


Re:Capitalism vs socialism/communism (1)

HackLore (31416) | more than 14 years ago | (#1330768)

hmmm
how's a bout Luke 4:32b

"None of them said that any of their belongings were their own, but they all shared with one another everything they had"

or Luke 4:34b,35

"Those who owned fields or houses would sell them, bring the money recieved from the sale, and hand it over to the apostles; and the money was distributed to each one according to his need."

It is is entirely false to purport that it is "God's law that no reward come from work"
and these verses that I quote do not fall into the small exception you (erroneosly) mention.

Christianity is not a blue-collar religion, it does not have social distinctions as such, viz. Galatians 3:26-29

"It is through faith that all of you rare God's children in union with Christ Jesus. So ther is no ifference bewtwen Jews and Gentiles, between slaves and free people, between men and women; you are all one in union with Christ Jesus."

Such is Christian thought (as per the new testament).

The berses you mention above are specific rules given in a specific context to the people of Isreal as warnings against laziness. At the time, the nation itself was in a time where survival was critically important, and laziness could not practically tolerated. Even still, there are warnings against laziness all through the bible, but the Bible is an enormous book with hundreds of stories, each with it's own context, albeit there are many lessons which crossover. It behooves you to know the context of what it is you quote.

We can therefore say, with a fair degree of certainty, that god does not mandate any given economic system. Both capatalism and socialism can be used in positive and negative ways concerning religion. Open Source is not a cheap door that lets robbers steal your work easily, it is a voluntary contribution to peer review and use. Even the community itself rallies against "stealing", viz. the Sun-Blackdown fiasco. Open source, linux, et al, is about collaboration for the greater good, not making money off of someobody else's back whilst one slacks off.

Christianity is certainly not capitalist, not communist, nor socialist, nor fascist.

As a member of the Christian Left, I know many people from Christian backgrounds who use linux, and you can trust us that we are not bucking for thuderbolts, god is perfectly ok with socialism, open source, et al.


Micah

Re:DB Alex Brown (1)

PapaZit (33585) | more than 14 years ago | (#1330769)

Okay, I'll bite...

Add up federal, state, and local taxes. Now, throw in sales tax and the (substantial) hidden corporate taxes and tariffs that raise the price of items on the shelf.

I don't make that much, but if I could pay a flat 40% in exchange for eliminating all other taxes, I'd be getting a good deal.

Not that I'd like paying that much...

Re:No way... Amazon has already won (4)

SEE (7681) | more than 14 years ago | (#1330771)

Amazon can turn a profit any time they want... all they have to do is turn off the marketing machine and stop spending so much on infrastructure.

Nope. As Forbes [forbes.com] points out, Amazon's "marketing" costs include packing and shipping books and CDs, and the costs of storing things in its warehouses. That means a major part of their so-called "marketing" costs are intrinsic to each sale itself, and cannot be cut.

At the same time, the entry of competitors is going to cut into Amazon's latitude. Amazon originally discounted a larger number of their books than they do now; the result is a number of customers have defected to BN.com, which has a borader selection of still-discounted books. Amazon's book division can't turn a profit if it returns to the old pricing scheme; it also can't turn a profit (in the long run) if BN.com consistently undercuts it on the same products.

Amazon itself admits its current buisness model is unsustainable in the long run. It is simply my analysis that Amazon will not be able to successfully transition to a sustainable model that justifies anywhere near its current valuation.

Steven E. Ehrbar

Etrade sucks rocks (0)

Anonymous Coward | more than 14 years ago | (#1330772)

Yeah, I actually got in on the VA one, whereas I was denied by Etrade's perl script, so I didn't get in on that. Etrade sucks - any recommendations for an on line broker?

Why Intel? (0)

Anonymous Coward | more than 14 years ago | (#1330774)

This is not saying AMD sucks or their chipsets suck but its that you have to do x2 work for another CPU.

Well, then given the current price/performance levels, it sounds like they should just drop Intel altogether so they can concentrate on support Athlon systems alone.

Just kidding. That's not really an option until the SMP Athlon motherboards come out. Then Intel will be truly fucked, since small companies who can only afford to work with one chipset, will have to make a decision that is weighted against Intel.

Re:Capitalism vs socialism/communism (0)

Anonymous Coward | more than 14 years ago | (#1330777)

Well, I pointed out several times that I was only stating my opinion. As I said I don't have any problem with Linus or Linux users at all. And if other Christians such as yourself want to use Linux, that is completely fine if you're okay with it. All I said was that I think, personally, that there are some issues to be resolved. On the other hand I must take issue with your comment about God being "okay" with socialism. I don't think that's right. But this is really not the place to argue that so we'll probably have to agree to disagree. Thanks for writing!

Put your e-mail address everywhere in your code! (3)

Raphael (18701) | more than 14 years ago | (#1330784)

After reading the paragraphs in which Chris DiBona explains how the developers were selected for the IPO, I conclude that the list of people was based on the number of times each e-mail address appeared in the 11 GB of source code he had selected. Or more probably, on the number of files in which the addresses appeared (it would be too easy to cheat by inserting your e-mail address a thousand times in the same file).

I understand that it is not easy to find an objective way to select the developers who contributed the most to the Open Source community. It is especially difficult to have a process that could be automated as much as possible. And it is extremely difficult to be fair.

But still... Now I realize that modesty does not pay when you write your code. Instead of inserting your e-mail address only once at the top of the AUTHORS file (and in the ChangeLog) but not in any source file, it seems to be better to include your e-mail address in every source file that you touch. Sigh!

And of course, don't use spam-traps if you want to get the opportunity to participate in some IPO. Sigh!

Hmmm... As far as I am concerned, I think that I will stick to the old habit of being credited only once or twice, not in every source file.

Re:Open Source mentioned (1)

Duxup (72775) | more than 14 years ago | (#1330785)

I noticed that too. It did seem to be a bit gimmicky didn't it?

It's not like we're little Open Source Smurfs here who have to hear variations on the words Open Source in every sentence or we lose interest or gain anymore than we already have.

Worth the wait. (5)

Shoeboy (16224) | more than 14 years ago | (#1330786)

This was beautiful, and totally worth waiting for. If Larry had rushed things, we might have gotten short, coherent answers. Fortunately the man is a perfectionist, and we got a total dodge of the AMD question, a lot of vaugeness and 135 repetitions of the phrase 'open source'.
Great.
--Shoeboy

no AMD or Alpha support anymore... (2)

garcia (6573) | more than 14 years ago | (#1330787)

We dropped Alpha well before the Intel investment because we didn't have the resources to support Alpha and Intel on Linux. However, we're always exploring all of our options.

hmm, no response about AMD though. Hmmm ;)

Opinions differ (2)

Uruk (4907) | more than 14 years ago | (#1330788)

Opinions differ as to whether or not the stocks are actually overvalued or not...I've heard a lot of people including many slashdot posters claim that there's going to be a bloodbath probably this year on the stock market and such.

As it happens, I have a lot of relatives in the securities industry in one form or another. (People who work in pension plans, stock brokers, and so on) They seem to think that the market may be in for some type of "correction" but nothing like a major bloodbath or crash for a long time.

Specifically, I was told that "When your shoeshiner gives you stock tips, it's time to get out of the market" I.e. when everybody and his brother is borrowing money to play the stock market because they've never seen anything BUT a bullish market, you know that it's time to get out, because stocks are being used as a money-making tool completely independant from the company that you're investing in. And that's where the real shit hits the fan. Fortunately, in the opinion of many I have talked to, that hasn't happened yet.

Oh, one other note - maybe that whole stock overvalued thing is a moot point now - check the current price on VA stock (symbol LNUX) - they've been in a tailspin for a while. Mind you, they were so high that you can be in a tailspin for quite a while and still have a decent stock price, but they've lost a lot of ground nontheless.

Re:return of the regime . . . (0)

Anonymous Coward | more than 14 years ago | (#1330789)

Freakin aye.....what're ye smokin?

Re:no AMD or Alpha support anymore... (1)

garcia (6573) | more than 14 years ago | (#1330790)

my bad, the prior post about AMD didn't show up when I wrote this hehe.

Re:What?!? (2)

SEE (7681) | more than 14 years ago | (#1330791)

Actually, companies have always been valued partly on their current earnings, partly on their assets, and partly on their expected future earnings. For example, a company that is expected to earn 10 million next year will be valued at less than one expected to earn 100 million, assets and current earnings being equal.

No, what Amazon did was convince people that a long term buisness plan and a brand name were worth billions of dollars despite massive losses in a rapidly changing sector of the economy.

My prediction: Amazon dies in five years having never turned a profit and having been killed off by smaller, faster, smarter rivals with less debt. The brand name is sold to another retailer by the bankruptcy court, and eventually fades away.

Steven E. Ehrbar

But there are yet more clues! (0)

Anonymous Coward | more than 14 years ago | (#1330792)

Don't forget, the domain suffix for the Vatican is *.va*!

You say there is no connection between *VA* Linux and the Vatican?

I THINK NOT!!!

THE CONNECTION RUNS DEEP MY FRIEND!!!

How Not to Drop Names (5)

Sebbo (28048) | more than 14 years ago | (#1330813)

We sell systems based on Open Source software and provide significant amounts of consulting services to companies building major sites on the Internet like eToys, Akamai, DoubleClick, and Starmedia.

If you're trying to endear yourself to Slashdot readers, perhaps you shouldn't emphasize your ties to eToys and DoubleClick this month. Eh, Larry?

Re:What?!? (3)

Rombuu (22914) | more than 14 years ago | (#1330814)

There used to be a day when companies were valued based on their actual performance. Amazon suceeded in corrupting that definition so that it included their future performance

Oh really? When I was studying finance I learned that the value of a stock should be equal to the sum of a series of expected dividends plus the expected price of the stock when you sell it, all of which should be adjusted for the time value of money. In other words, stock values always have and always will reflect the future projected performance of a company. Amazon didn't invent this.


It seems that IBM is about the only tech company that's valued anywhere near the levels it's revenue would reflect if it were in any other industry.

That's like a utility company complaining that their stock would be valued higher if they were only in the media business or something.. silly..

I mostly liked everything else he had to say, but due to the order of teh question, i was set off by him. Build a company. Get the sales. Get the PROFITS. Then you'll get your valuation. Any other order is just insane.

Hey, if you so damn much smarter than the market, you should short the stock. You should make a killing when the stock goes in the tank, right? Or are you just shooting your mouth off?


How much Raster Worth? (2)

Anonymous Coward | more than 14 years ago | (#1330815)

Considering that Raster has worked at both Redhat and Va Linux in the past year and both companies went public, I would think that he is worth some coin. Anyone have an idea?

valuation (2)

whileone (38498) | more than 14 years ago | (#1330816)

i dunno. i think the old view of price/earnings really should be replaced with price/(earnings + research + marketing) it's *far* from perfect. but i think it's more representative of what a companie is really worth. research counts. witness at&t, ibm, xerox. like it or not, marketing counts. witness pepsi, microsoft, fox.

as i said, it's not perfect. but i do think it would let companies grow in a way that makes a bit more sense than pure p/e. we've neglected the long term benifits for quite some time - this may force the issue on wall street.

Re:Open Source mentioned (0)

Anonymous Coward | more than 14 years ago | (#1330817)

Was it really necessary to say Open Source 15 times in the first two answers ?

Well, it was, but only if you look at it from a marketing perspective. The aim is to capitalize on the buzz and general hype surrounding all things Linux/Internet.

Open Source is just the latest trendy bandwagon that the suits and Wall St sharks have latched onto in their eternal quest for the almighty $.

When will the long-haired left-wing idealoges that support Linux climb down of their high-horses, and deal with the fact that these days, Micro$oft is not the only money-grabbing marketing driven provider of Operating Systems. It now has COMPETITION from Linux (and its less stable derivative, FreeBSD).

Once you start to see it from this logical perspective, you will come to the conclusion that Open Source should have been mentioned even more frequently.

But then, who's counting ?

dmg

desktop market (4)

Signal 11 (7608) | more than 14 years ago | (#1330818)

I'm alittle suprised VA doesn't want to play in the desktop market. It's obvious many slashdotters here regularily scan VA's offerings but are consistently priced higher than other companies. Per unit sales may be more on the server market, but for sheer volume desktops blow them away. I'd say if you want a larger net value, go with the desktops.

As you said yourself, Chris, there's tremendous market opportunity here. Why limit yourself to servers? Perhaps an indication linux is still not ready for the desktop... only time will tell, however...

The extras are nice (3)

mosch (204) | more than 14 years ago | (#1330819)

I've spec'd quite a few VA boxes in random consulting jobs and have always had spectacular performance and reliability with them, but the one anecdotal reference regarding service that I'll give is this.

We hooked up the box to use as a little firewall, and it wouldn't work. When I mentioned 'never mind, it's probably something flaky with our router, thank you for your help' they asked what kind of router it was, and offered to get somebody with Cisco knowledge to help. And this was for free. This was the first machine I ever bought from them, and was the incident that sold me on them for life. (the issue turned out to be a bad cable. DOH! that part of the incident convinced me to buy a good cable test kit)
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