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Business Week: How Larry Augustin Sells Linux to Net Stars

Feb 23, 2000, 20:12 (1 Talkback[s])
(Other stories by Steve Hamm)

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"Augustin's strategy looks solid. Rather than shipping computers to companies and leaving them with the complex task of making them work well with the software, VA Linux actually loads all the programs its customers plan on using and tests the system to make sure it runs smoothly. Augustin devised a hybrid of the strategies of two very successful companies, Sun Microsystems and Dell Computer. Like Dell, VA Linux builds computers to order and can do it very efficiently. And like Sun, his company integrates software with the hardware. 'You've got build-to-order hardware. Why not build-to-order software? It's a great opportunity for us,' says Augustin."

"Customers seem to like having their computers and software delivered this way. VA Linux has landed high-profile dot-coms like Akamai and eBay. It supplies powerful systems to the National Laboratories and to large pharmaceutical companies. And its systems are especially well suited to the needs of Internet service providers. One of its models -- shaped like a pizza box -- is designed to slip effortlessly into racks so ISPs can quickly add computing power as soon as they need it."

"But Augustin knows that he can't beat computer giants like Dell over the long term by delivering commodity hardware. That's why he's trying to make VA Linux the spiritual godfather of the so-called Open Source community. Last year, he launched a Web portal, Linux.com, that's a gathering place for people interested in getting hold of free software and sharing thoughts about Linux. Early this year, he established another site, called SourceForge.com, that offers programmers tools and a place to manage their collaborative projects. And on Feb. 3, he paid about $650 million in stock and cash for Andover.Net, a Massachusetts company that operates a handful of Web sites aimed at Open Source practitioners -- including the immensely popular Slashdot.org news and commentary site."

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