"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
"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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