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GartnerGroup: Red Hat Flexes Its Muscles by Acquiring Cygnus Solutions

Dec 19, 1999, 00:24 (12 Talkback[s])

"In an effort to move beyond the Linux distributor market niche, Red Hat announced plans to purchase Cygnus Solutions, a leading vendor of open-source development tools...."

"With this acquisition, Red Hat acquires significant intellectual capital and human expertise as well as flexibility to influence the software development and tools market for Linux. The deal also gives Red Hat - with its weight and visibility - an entry into the embedded OS and services market of the Cygnus operating system (eCos; see Note 2). However, succeeding in all of these areas will require an adept marketing organization (which is now immature) to explain, position, sell and set up the right channels...."

"GartnerGroup believes this acquisition is a good fit for both organizations. Both companies have "grown up" within the OSS market. Consequently, their corporate cultures are extremely compatible. Red Hat will likely retain most of Cygnus' work force (more than 100 of its 180 employees are engineers) and will benefit from the significant "brain trust" of the relationship. Moreover, Cygnus' infrastructure now provides Red Hat - whose headquarters are located on the east coast of North Carolina - with a West Coast Silicon Valley presence. The acquisition also enables the company to better provide end-to-end solutions that are particularly critical to corporate IT customers."

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