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SmartMoney.com: Stock Watch: Linux at a Crossroads

Nov 17, 2000, 22:46 (9 Talkback[s])
(Other stories by Russell Pearlman)

"In a nutshell, companies attempting to profit off the Linux operating system are having the same problems as those looking to make a buck off selling water: How do you make money when your product is ubiquitous and free? Furthermore, now that the hype surrounding these stocks has past, investors are paying attention to what they really knew all along - slaying the beast in Redmond will take much more than just angry talk and good intentions...."

"So does all this mean the Linux revolution has fizzled? Nobody's saying that; investors have simply come back down to earth. Nevertheless, lessons have been learned over the past year, and it appears that four business models are emerging for companies looking to differentiate themselves from the Linux pack. Each has its own plusses - and minuses...."

"Finally, there's the "Coke" strategy. The water used to make Coke can't be patented, but the syrup Coca-Cola adds to the water can be. Likewise, Linux can't be patented, but applications that augment the Linux system can be. There are a slew of companies already developing software applications exclusively for Linux. TurboLinux, a company that recently filed to go public, is the most prominent of the bunch. But other traditional software companies, including software giants Oracle and SAP, are already taking steps to make their software Linux-compatible."

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