VA Linux: jack of all trades
- Article 12 of 77
- Information Age, June 2001
VA Linux has three claims to fame. Primarily, it was the first company to offer an exclusively Linux-based product line. Secondly, is it has more revenues than all the other Linux specialists put together. And, perhaps most interesting, its initial public offering in December 1999 saw the biggest first-day gain ever recorded on the US stock market, jumping over 700% from the opening price.
VA Linux has three claims to fame. Primarily, it was the first company to offer an exclusively Linux-based product line. Secondly, is it has more revenues than all the other Linux specialists put together.
And, most interestingly, its initial public offering in December 1999 saw the biggest first-day gain ever recorded on the US stock market, jumping over 700% from the opening price.
Formed by Stanford University graduate Larry Augustin back in 1993 after he had built his first Linux workstation as a student, VA Linux tries to be all things to all Linux users. Although it does not have its own Linux operating system to distribute, the company builds Linux-based servers, desktops, laptops and embedded systems, installing software from a choice of 7,000 programs onto purchasers' systems. Indeed, according to Augustin, the company is “going to do for software what Dell has done for hardware”.
VA Linux also consults, hosts open source projects, and operates Slashdot and other Linux web sites, showing that it is a community-focused, albeit for-profit, company. Its dedication to Linux has meant that, in terms of shipments, it now enjoys second place in the Linux server market, according to IDC.
But that broad approach may be stretching the company. While its hardware revenues keep the company at the top of its industry, it has now issued profit warnings for three straight quarters, and its tumbling share price has led to several shareholder suits and allegations of misconduct during the IPO. In 2001, the company announced that it was laying off 25% of its employees and, because of a slowdown in customer spending, it has been left with an inventory glut. In its third quarter to 31 March 2001, revenues tumbled 41% to $20.3 million - the company does not now expect to turn a profit until late 2002.
In the meantime, VA is looking to focus on larger customers. But, in the burgeoning Linux market, it is clear that the jack-of-all-trades approach is now in question.