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Forbes: Linux Companies Look Beyond OS To Build Revenue

Jul 25, 2000, 12:12 (4 Talkback[s])
(Other stories by Lisa DiCarlo)

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"It's a strange paradox. Shipments of the Linux operating system have already surpassed Novell's venerable NetWare. And at a projected growth rate of 17%, Linux will outpace all other server operating systems through 2004. But revenue growth will be barely noticeable at only 1%, compounded annually."

"That being the case, Linux pure plays like Red Hat (nasdaq: RHAT), Caldera Systems (nasdaq: CALD) and Turbo Linux are shifting the revenue focus away from licenses of the operating system (OS) to peripheral markets like higher-margin development tools, applications, services and support."

"In the case of Turbo Linux, it sells a standard Linux OS for about $200 but charges ten times that amount for a beefed up version, which includes specialized clustering technology. Caldera charges tens of thousands for e-commerce applications that run on its Linux OS."

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