Widening the Playing Field
Monday, January 10 was a big day for Caldera Systems. First came the announcement that six large investors had together pumped $30 million into the company. Then came another announcement that Caldera had filed for an initial public offering (IPO). Then there was an announcement that Caldera Inc. had settled its antitrust lawsuit against Microsoft.
All three open the path toward an IPO. Given the impressive recent IPOs by Linux-related companies, this is promising news. Four of those companies--Red Hat, Cobalt, VA Linux and Andover--are today worth more than $28 billion, all in new wealth created in less than half a year.
As it happened, Monday was also when AOL announced its purchase of Time-Warner. This was the biggest merger in history, and news that blasted away nearly every other story. But at Linux Journal, we are less concerned with the mating of industrial whales than about significant developments in our own community. So we got Caldera's President and CEO, Ransom Love, on the phone to talk with Doc Searls about what's going on with his company.
Doc This has been a rock & roll day.
Ransom: Pretty exciting.
Doc This is historical in a lot of ways. I don't know if you took time out to look at other news, but AOL bought all of entertainment with this Time-Warner deal.
Doc And then you settled that Microsoft thing.
Ransom: That's not us, it's Caldera, Inc.
Doc Yeah, but it's a question you'll stop getting, I imagine.
Ransom: Isn't that great?
Doc A cloud that goes away.
Ransom: Yeah, it's a big deal.
Doc Is there anything more you want to say about it?
Ransom: (laughing) Actually, no.
Doc Always a good answer. If I don't have much room, I can use it.
Ransom: Well, this is totally unrelated to us, but I would love to see Microsoft take an open stance toward Linux in general. I mean, we need an office suite. It would be nice to see them provide an office suite on Linux. That would be wonderful. So hopefully, this will be the first of some more exciting news to come.
Doc Not just rapprochement, but something that's good for the customers.
Doc Okay, let's get to my first question. You list a whole raft of new partners here: Sun, Citrix, SCO, Novell, Chicago Venture Partners and Egan Management Capital. What does that list tell us, and how does it differ from the list of partners lined up by your competitors?
Ransom: Obviously, Caldera is focused on e-business. We believe Linux is the ideal platform for extending that, through specialized servers, specialized devices. You look at these companies, and a couple of things come to mind: there are major channel players; and they know how to play with resellers and systems integrators--and the electronics solutions providers, as we like to call them. So, they are major players in the channel, and thus it makes sense for us to try to work out relationships with each of them.
I will say that we were not interested in getting money. We were looking for long term relationships that make sense and help us deliver on our desire to be the number one Linux provider for e-business. So if you look at the companies on that list, you begin to see how they could each work with us. Granted, there is a lot more that we are not at liberty to announce, behind the relationships of the investment. Obviously, having Sun on our board, having Carl Ledbetter from Novell on our board, having Ed Jacobucci--just a tremendous addition to our board--he's the CEO of Citrix... will help us as we try to drive Linux into this expanding e-business space.
Doc Do you see these companies in turn becoming much more friendly to open source and adopting open-source strategies?
Ransom: Yeah, no question.
Doc And you're going to help them with that.
Ransom: That would be our intent and our desire. Again, we have always felt that open source is not the answer to everything, but it definitely makes sense in the area of core technologies and everything related to them. So, you bet: there would be a strong desire to work with them to provide as much technology as they need.
Doc Something seems to have happened in the last several months, beyond some very significant IPOs. It's sort of like: Linux got hot, and then got a whole lot hotter.
Ransom: No question.
Doc And I'm wondering where you think this thing is going. What's your sense of what people are thinking about Linux that's different than what they thought just a few months ago?
Ransom: You have a validation from additional significant players coming to bear. Which means you have significant resources you have not previously had in the space. So consequently it bodes very well. There are the doomsayers who say Linux is going to take a major correction. But where there's smoke, there's fire.
Doc They said the same thing about the Net a few years ago, and look what happened.
Ransom: That's right. Tell me: where's the correction? I think any time the industry embraces a technology to the extent that it is embracing Linux, with the validation coming to bear from the major players, that's significant. You have companies that have the kind of capital available to them that we see here, closing our second round with $30 million of capital. That's a lot of money. Now we can invest that in the kinds of technologies needed, much of which will be contributed back to the open source effort. Y'know, Linux is a reality that will be here, and we believe it will play a significant role in the new paradigm of servers and Internet devices.
Doc Over the last several months, I have been talking to a number of large companies that are suddenly making these radical pro-Linux moves, based on internal Linux developments. They are coping with the fact that their companies are full of Linux. IBM, HP, Intel... these kinds of companies are telling me they have to cope with the fact that they are full of developers who like this stuff, and are putting it to use. Suddenly, they are comfortable with Linux as a building material and open source as a building method, and this is having a big effect on the way these companies work. Intel is even developing new policies that allow their developers to work on open source and give it back to the community. Are you seeing the same kinds of developments?
Ransom: There is another aspect of open source you've hinted at there, which I think has not been explored. One of the things that all of this does is create a level playing field. The next question then becomes: how do you piece this all together? How do you make total solutions out of what all these wonderful companies--that say they are coming on board, that they are going to invest, that they are going open source--are bringing to this playing field? How does this all now become a cohesive whole? The beauty of open source is that it breaks down many of the traditional barriers. We can actually solve problems together, because of this level playing field. Some of the exciting areas we can work on are management, administration, deployment, all in a distributed environment. We have a much greater chance of success when we deal with an open-source base.
Doc Last night, I was talking to Doug Engelbart, who is a big fan of open source, which he considers a natural state for software development. We talked about how the software industry is turning into the construction industry: how the builders and architects are taking over the market from the suppliers. In the long run, the people actually doing the work--the designers, builders, developers, architects--will be running the industry. This will be a much more mature state than one where suppliers alone set all the terms. It means that if one builder or supplier comes up with a better way to build things, they share it with everybody else and everybody benefits, just like it works in building construction. Is this what you are seeing as well?
Ransom: Yes. And the beauty of that is, the traditional barriers that say "If I buy into that, I sacrifice my opportunity," are all down. So if we come up with a really nice way to solve a major problem, why not let everybody embrace it? Today, we have a much better chance to solve the major problems we have been facing for many years, which will now be aggravated even more because of the proliferation of devices.
Doc So you're saying the playing field isn't just level now, but also spreading out.
Ransom: Right, exactly.
Doc I want to ask you about the Citrix relationship. Your press release talks about enabling access to any application on any platform and any device. That sounds to me like what Corel and GraphOn have been talking about together. So it seems like you're saying to Corel, "I'll see your GraphOn and raise you one Citrix."
Doc There's mention in the Citrix part of your release that application services are part of this synergy between the two companies. We don't hear a lot about application service in the Linux world, compared to the Windows world. What are your plans there?
Ransom: We are firmly committed to the fact that Linux is not the end-all, cure-all to the industry's problems, in and of itself. We believe it will be a major catalyst to solve many industry problems, because it is able to interoperate with existing systems, to create this non-threatening environment upon which to build infrastructure components that have been needed. And to truly become the network OS of the industry. And I don't mean that as an insult to Novell or anyone else. But the Internet is the network, and Linux is the Internet. We're ready to work with companies like Sun, Novell, SCO, and other major platform providers today, and to ensure integration interoperability opportunities. We would love to enhance integration with Microsoft, too. Because in businesses, all those companies are reality. Cross platform is the reality, and to the degree you simplify that for businesses, and you abstract the complexities of management and other things, having Linux as an open-source platform to do that is a great advantage. We'll be talking a lot more in this area soon, because this is kind of our sweet spot, if you will. Because we believe all these new devices will proliferate, and there is a need to figure out how they plug and play and interoperate with all the existing architectures. We're going to be focusing on this a lot.
Doc What does the Citrix relationship in particular mean?
Ransom: Citrix has played a lot in providing both applications and interoperability. All I can say is it's a natural fit to have Citrix come in to Linux and provide their technology. We feel strongly because, like us, they believe in the channel, they understand the channel, and now providing Citrix through the channel with Linux and other things I think will be very exciting for all of those trying to do just that. You know, VARs and system integrators have exactly the same problem. They sell existing systems, they have existing customers using those systems. They need the interoperability.
Doc You guys, alone among all the Linux companies I know, like to talk about directory services as an issue. I am curious to know about the directory play here and what you can tell me about it. Are we going to see NDS (Novell Directory Services) being open sourced? Will metadirectory come up as a solution?
Ransom: We see directory as a key enabling technology. We believe it has the protocols, the infrastructure, to do some really good things for management, systems deployment, application deployment and other things that need to be done without creating yet another API.
Doc Or yet another name space.
Ransom: Yeah. We may have to create some sort of abstraction layer in order to achieve the kind of interoperability we all need. But we can leverage some existing technology and existing standards, one of which is the directory, to accomplish much of what we want to accomplish. Some of that we are not in a position to announce yet; but it is thoroughly in line with our focus as a company--to literally make all of the Linux technology and e-business solutions we provide plug and play into existing environments. I haven't talked about E-builder yet, but what about existing legacy systems? The whole reason we went to the E-Builder framework was so we could literally wrap whatever the customer has, or the VAR has sold to this customer, or the ISP has sold to this customer, in a way we can bring that and plug it back into the Internet paradigm itself. So we are keen on using open source and Linux to promote the infrastructure necessary to solve the challenges faced in a truly distributed, truly cross-platform business environment. That's what we're after. Sorry for the ambiguity there.
Doc That's a good enough answer, and whets our appetite for more information. Do you like Open Directory?
Ransom: We are familiar with it. We are talking to people and obviously would be very supportive of moving that effort forward.
Doc Now I have to ask the Red Hat question. As you know, Red Hat has just gotten huge. And they are sort of borging up all these other companies. And the bigger they get, the more money they get to absorb more and more companies. Plus they are talking about how they really compete with Microsoft now, and not just the other distributions. I am wondering how you contrast what you're doing with Red Hat's strategy.
Ransom: I honestly don't know what their current position and strategy is. Our focus is not to be all things to all people. We are focusing in on what we think is the hottest opportunity in Linux, which is specialized servers and Internet client-type devices, and providing solutions that will extend e-business infrastructure. This involves the framework of E-Builder, based on Java, that allows you to wrap and utilize your existing accounting systems and databases, and make that a viable system in a true e-business environment. So we think this is the hottest use of Linux technology. We think the most promising application space is e-commerce and e-business, and we are focused there. We think that is where Linux is going to succeed in the foreseeable future. It's just a huge opportunity. But we're not trying to do more than that. And I really don't know about Red Hat. We believe, in all honesty, that you can't be just a service organization. You have to have a road map of where you want to go. You have to understand what kinds of technologies and solutions are needed and how to provide those solutions. It's not just about "being \t\tLinux". Frankly, everybody and anybody can "be \t\tLinux". Especially if LSB (Linux Standard Base) is successful.
Doc Tell me about that.
Ransom: That's the initiative gaining momentum and support by pretty much all the other Linux providers, where we create a port-once-run-anywhere Linux environment for ISPs. We collaborate on that standard and become compliant with it. And that's critical, frankly. We would like to see that become extremely successful. We are providing business solutions to the market. Not Linux distributions. That's yesterday's news.
Doc So you think the term "distribution" may be obsolete at this point?
Ransom: I certainly hope so, because a business doesn't want to buy a "distribution". It wants to buy a solution that solves its problems. That would include interoperability, management administration, deployment...
Doc Such as?
Ransom: Such as our E-server for web-based administration and deployment.
Doc I think you need a more specific noun than "solutions", though. "Distribution" may be the wrong word, but it's more specific than "solution".
Ransom: The problem with "distribution" is, what does it mean? Is it the collection of packages I can get off the Net, and it just saves me from downloading it? Is that the service? That service worked really well for the developers on the Net who really needed it. But a business has to deploy a product, and not just a collection of really neat technologies. So that's what I mean by a solution. We're moving past the days of the distribution to the days of the business products that have to be deployed, that have to be specifically targeted at business problems. That's where we're going with our E-desktop, E-server and E-builder.
Doc Searls is Senior Editor of Linux Journal