Ciol.com (India): Why Linux companies go broke?

The Open Source business model may make for an interesting
college thesis. But, when it comes to making some serious money,
Linux companies are a disaster in progress.

“If I can make one fairly certain prediction for 2001, it is
that by this time next year, there are likely to be fewer Linux
companies around. For two years, at trade shows and on other
occasions, I have been asking people from TurboLinux, Red Hat, and
other Open Source supporters how they expect to make money, any
kind of money. The answer usually is something like this, “We will
sell support contracts.”

“The Open Source business model may make for an interesting
college thesis. In the real world, many of these ambitious Linux
companies are simply writing a story that will end in Chapter 11.
And that appears the course many Linux companies are on. The poor
financial results of one Linux company after another goes to show
that the Open Source model is a disaster in progress.”

“Case in point? TurboLinux. The Silicon Valley company has a
great solution to run everything from a single Linux workstation to
clusters of powerful Linux servers running large enterprises. The
company is among the top three or four Linux distributors. It is
the leading Linux distributor in Japan and the rest of Asia. And
the company has been pulling out all the stops these past two years
promoting itself in heavy advertising campaigns and large booths at
trade shows.”


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