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Red Herring: Linux IPOs have been stratospheric. But temperature in the sector is dropping.

Jun 25, 2000, 02:20 (3 Talkback[s])
(Other stories by Bronwyn Fryer)

"Like the owner of a new BMW Z3, Kenneth Topp thrills to the lean and lovely lines of Linux. When he recently encountered problems with an Ethernet card, he found his solution quickly, thanks to the hot operating system and a helpful Net community. "I poked around in the code and got the fix quickly," says Mr. Topp, who is the director of engineering for Vujadé, an Internet services company in Santa Cruz, California. "There was no waiting, no finger-pointing, no searching for hardware drivers."

"Multiply Mr. Topp by the 12 million Linux users of the world who are sick to death of finger-pointing, sitting on hold, and searching for drivers, and you get, ahem, "market disruption." Add in the likes of Dell Computer (Nasdaq: DELL) , IBM (NYSE: IBM),Oracle (Nasdaq: ORCL), and SAP AG (NYSE: SAP), according to research consultancy the Gartner Group (NYSE: IT), the 19 percent of all corporate IT departments that are evaluating Linux, and you get "market legitimacy." Get enough applications, hardware platforms, and support services in line, and you've got, well, fever."

"The Nasdaq -- at least until recently -- had a pretty severe case of Linux fever. The operating system has been around since the early 1990s, but temperatures began climbing in earnest when Red Hat (Nasdaq: RHAT) [See Herring 100 profile] held its now-legendary IPO on August 11. The offering price was just $14, but on the first day it closed at $52. It hit $123 a month later and $286 three months after that. And that was just the start: for the last seven months, the grassroots operating system and hot IPOs of the companies involved have made headlines in magazines like the one you're reading now."

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