Tag Archives: Red Hat Inc.

About 4737 days ago Business Software

Bidding on Linux

The Linux operating system is hot. It’s cheap. And it works. But can you run your company on it? Wearing a blue windbreaker with a James G. Murphy Co. logo on it, Julie Murphy stands in the company’s muddy auction lot in Kenmore, Wash., just north of Seattle. As she looks on, men in flannel shirts and logging boots inspect the tires and climb into the cabs of the used backhoes and dump trucks that will be going on the block shortly. Each year Murphy’s company auctions off some $30 million worth of this sort of heavy equipment, along with used police cars, tools, and even the contents of an entire restaurant or sawmill. But today’s auction is different. For one thing, nearly 1,500 bidders have registered, far more people than the monthly auctions usually attract. And there’s more than the average air of expectation in the auction yard. That is largely because of just one item: a one-of-a-kind, baby blue 1971 convertible Plymouth Hemi Barracuda “muscle car.” Seized by police in Everett, Wash., in connection with a drug arrest, the car is in mint condition. No one knows how much it will go for when the bidding starts at noon, but it won’t be small change: the city of Everett has suggested that the minimum bid be set at $250,000. One fellow has flown up from Phoenix to try his luck. Other bidders are on the phone from places like Blue Springs, Mo., and St. Paul, Minn. “This is one of the most exciting things we’ve ever sold,” says Murphy. In a previous life, Murphy was a certified public accountant at Arthur Andersen. Now she is chief financial officer, controller, and office manager of James G. Murphy Co. The company was founded in 1970 by her father, James. Murphy’s older brother, Tim, is CEO and head auctioneer. Along with her many other duties, Julie Murphy is responsible for the company’s computers. Not every small business will be able to (or should) jump on Linux immediately. And this auction, like all the others her father and his fellow auctioneers have held for the past four years, will run on Linux. In the company’s cramped mail room, Murphy proudly points to a metal rack sitting in a corner behind the copier. It holds two computers that run Linux, the software program that has taken the computing world by storm. Since 1996 — long before most people had ever heard of it — James G. Murphy Co. has been using Linux to run its auctions. Today the company uses the program to run almost its entire business. Linux, a computer operating system, is essentially a version of Unix, the software that runs powerful workstations sold by companies like Sun Microsystems and Hewlett-Packard. It has two big advantages over competing operating systems (like Microsoft Windows NT, for one), says Bill Campbell, the Seattle computer consultant who installed the Murphys’ Linux system: It is dirt cheap. And it is incredibly reliable. That reliability is important if you’re in charge of a 30-employee family business running auctions that sometimes draw more than 1,000 bidders. This morning, while most of the crowd is jockeying for seats in the indoor auction hall to get the best view of the bidding on the Hemi ‘Cuda, others are lining up in the office to pay for the heavy equipment and trucks they acquired during the morning’s auctions. Using computer terminals and PCs hooked up to the Linux server, 10 cashiers are taking payments. All the information they need is already in the server: descriptions of the items to be sold were entered before the auctions began. Prospective buyers received bidder numbers when they arrived this morning. During the auction itself, workers frantically typed winning bids into the system, so when bidders come in to settle up, says Murphy, “you just punch in their number, and it tells you what lots they bought and how much they paid.” Just to be on the safe side, Murphy still uses every auctioneer’s favorite manual backup system: slips of paper. That’s how the business handled payments before buying its first computer in 1986. What would happen if the company’s computer system were to fail during a huge auction like today’s? It wouldn’t be a pretty sight, says Murphy. “I would probably just jump out the window.” Fortunately, the system has never crashed. That sort of reliability is typical of Linux computers. “Some of our clients have Linux systems that have been running for a year solid,” says Jim Capp, president of Keystone Programming Inc., a computer-consulting company in Harrisburg, Pa., that sells a lot of Linux systems. Linux holds another attraction for small businesses: it is essentially free. That’s because it was developed completely by volunteers, led by Linus Torvalds, arguably the world’s best-known computer programmer after Bill Gates. Torvalds, who started work on Linux in 1991 while he was a student at the University of Helsinki, distributes the software free on the Internet. It takes patience and Web know-how to download it, however. So most people pay a modest price — typically $30 to $59 — to get Linux from companies like Red Hat Inc., Caldera Systems Inc., and Corel Corp., which provide it on a CD-ROM, along with manuals, tech support, and other applications. Linux can also save small companies money because it runs well on older, less powerful machines. When Campbell installed E-mail and a firewall — a security gateway between the company’s computers and the Internet — at James G. Murphy Co., two years ago, he used an old 486 computer that Murphy was preparing to jettison. “I could have sold them a new computer,” Campbell says. “But Linux runs just fine on that computer, so why sell them hardware they don’t really need?” Linux also runs well on laptops, says Campbell. That’s useful to Julie Murphy, because most of her company’s auctions are run on location, sometimes at customer sites as far away as Texas or Virginia. Last November, for example, Tim Murphy and three employees headed off to the small logging town of Philomath, Oreg., where they auctioned off the saws, conveyor belts, and other equipment at two lumber mills. They took the auction software with them on an IBM ThinkPad 560 notebook computer running Linux. As with the computer system in the company’s home office, the auction cashiers used computer terminals networked to the laptop to take payments. Two years ago few people had heard of Linux. Then its impressive reliability and low cost started attracting attention. Now major computer companies like IBM, Dell, and Gateway sell it. It is widely used on the Internet — 31% of Web sites are powered by Linux — and Linux companies have pushed aside Web start-ups to become the hottest items on Wall Street. The initial public offering last December of VA Linux Systems Inc., a Sunnyvale, Calif., company that sells computers with Linux preinstalled, shot up 698% on the first day. That set a record for the highest gain made by a new stock offering. As Linux has become more widely accepted, several large companies — such as Burlington, N.J., retailer Burlington Coat Factory Warehouse Corp. and New York City’s Cendant Corp., which owns Ramada hotels and inns and Avis Rent A Car — are starting to use it. Now small organizations as well are discovering that Linux may be a good choice for them. Sam Brown, a private investigator in San Francisco, uses three Linux computers to do research on the Internet and to pick up E-mailed reports from his six investigators. And the Paducah Sun — a 135-employee newspaper in Paducah, Ky., with a circulation of about 30,000 — bought a Linux system last fall to archive stories and photographs. The newspaper considered buying an archiving system running on a computer from Sun Microsystems but decided to go with Linux instead. “It was significantly cheaper,” says publisher Jim Paxton. Both Brown and Paxton were introduced to Linux in the same way that the Murphys were, through a computer consultant. That’s now happening a lot, as folks like Campbell begin using Linux more and more. James G. Murphy Co. was the first of Campbell’s customers to begin using the system. Now nearly all the computers he installs run Linux. “In the last year I’ve put in 3 systems on SCO Unix,” Campbell says. “In the same time period I’ve installed at least 30 new systems running Linux.” Not every small business will be able to (or should) jump on Linux immediately. One problem: many software programs still don’t run on the system, says George Weiss, a research director at the Gartner Group, in Stamford, Conn. Campbell’s three customers who are not using Linux, for example, are running an accounting package from RealWorld Corp., in Manchester, N.H., which doesn’t work on Linux. And Microsoft, which views Linux as a threat, has yet to issue such software mainstays as Word or Excel for Linux. The lack of Microsoft Office apps isn’t necessarily a showstopper, however. Julie Murphy, for example, is using an office suite for Linux called Applixware, from Applix Inc., in Westboro, Mass. “If someone E-mails me a Microsoft Word file, it converts it cleanly,” she says. “You don’t know you’re not on a Windows system.” Weiss also suggests that support can be a crucial issue. “Linux is no simpler than any other version of Unix,” a notoriously complicated system, he warns. Small organizations that don’t have a trained programmer on staff should make sure they have a Linux-savvy computer consultant to install and support it, he says. Murphy was confident that Campbell knew what he was doing when he suggested switching to Linux. She’s been relying on Campbell’s computer know-how since 1988. “I don’t care what the computer is running,” she says, “as long as it works.” The bidders packed into the auction hall this morning don’t care either. Not with that one-of-a-kind Hemi on the block. At a few minutes past noon, the crowd falls silent as the bidding begins. The first bid is immediately doubled to $200,000. A man seated high up in the bleachers waves his hand — he’ll pay $225,000. That figure is immediately raised by a bidder on the phone from San Mateo, Calif. In less than five minutes, the price has jumped to $350,000. The man in the bleachers drops out. It’s now down to two: the bidder on the phone and a guy on the floor, who’s practically holding his breath as he stands next to the car he hopes to take home with him. There is a pause while the bidder on the floor converses on his cell phone and considers what to do. At last he bids $380,000. All eyes are now on the auctioneer holding the phone. Almost immediately he stabs the air with his hand, signaling yes — the bidder on the phone will go higher. The man on the floor shakes his head. He’s done. The car has just been sold to the bidder from San Mateo for $400,000. For that amount of money, you could buy a lot of Linux systems. Dan Orzech is a freelance writer in Philadelphia. For more about Linux, see “Good Stuff Cheap” in Book Value. Please e-mail your comments to editors@inc.com.

About 4737 days ago E-Commerce

Book Value

Boys on the Brand OK, so your business is online. Now what? Recent books aim to make your Web efforts pay off The 11 Immutable Laws of Internet Branding, by Al Ries and Laura Ries (HarperBusiness, 2000) eBrands, by Phil Carpenter (Harvard Business School Press, 2000) Digital Capital, by Don Tapscott, David Ticoll, and Alex Lowy (Harvard Business School Press, 2000) There’s plenty of advice out there about doing business on the Web. The trouble is, when do you find time to stop and read if you’re supposed to be building an Internet business at breakneck speed? Some of the advice, however, is worth heeding. For example, in The 11 Immutable Laws of Internet Branding, Al and Laura Ries tell nascent Internet companies that they need to be “fast,” “first,” and “focused.” But even though they trot out examples of how some superior sites have suffered from being second, there’s not a lot of detail about what to do when you discover that your site isn’t first. What the authors do well is articulate how important they think branding is to success on the Internet. They also advise that wanna-bes who are poised on the brink of taking their companies online need to decide whether they plan to use the Internet as a distribution channel or as a place to operate a business. If you plan to use the Web for distributing your already established products, then it’s fine to retain your company’s current name, for instance. But if “the Internet is going to be a business,” they advise, “then you must start from scratch.” As for coming up with a new company name, you’ll have to go elsewhere for advice on that one. In eBrands, Phil Carpenter doesn’t tell us how to build a killer brand on the Internet either, but he does tell us how six successful Internet companies have done it. Of course, it’s impossible to say how long those companies — despite their high profiles — are going to remain healthy, let alone stay leaders in their respective markets. There is good case-study material here and specific examples of what the companies have done well — and, in some instances, not so well. But you’d be hard-pressed to take what you read here about some exemplary companies and go out and quickly construct your own Internet business. Such hands-on advice does come in Digital Capital, by Don Tapscott, David Ticoll, and Alex Lowy. Their book is based on three years of research on what they call “business webs,” which are partner networks of producers, service providers, suppliers, infrastructure companies, and customers — all linked by digital channels. Based on their research, the authors have concluded that there are five classes of business webs, and they give examples of each that most readers will recognize. What makes Digital Capital stand out is that while the authors join the Rieses and Carpenter in recognizing the importance of brand building, they actually take the time to study the market, analyze it, and draw some bold conclusions based on their findings. The reader comes away with valuable ideas for replicating the models that successful businesses are using. Now that things are moving so fast on the Internet, that take-away is a must. Good Stuff Cheap Free for All, by Peter Wayner (HarperBusiness, 2000) In January 1999, as a witness in the Microsoft antitrust trial, Richard Schmalensee, the dean of the Sloan School of Management at MIT, tried to debunk the notion that the computer giant was a monopoly by pointing out that it indeed had competitors. Among the few he named was a small operating system called Linux. That testimony, author Peter Wayner suggests, put Linux on the map. Linux is really a group of programs known as open-source software. The programmers who wrote the source code for Linux have shared it openly over the Internet since the early 1990s, enhancing the operating system and passing it on. By 1999 a growing number of computer experts were choosing free Linux programs over pricey Microsoft offerings for running some Web servers. Free for All: How Linux and the Free Software Movement Undercut the High-Tech Titans is a fascinating story of how a motley group of far-flung programmers built a better operating system by sharing everything with everyone. It’s also the story of how Linux began to see signs of triumph as it started taking business away from companies with more costly programs. As a result, Linux gave birth to a small industry of resellers like Red Hat, which repackages Linux with instructions to make it easier for novices to use and sells it for about $60. The programmers who pioneered Linux may never see a dime from Red Hat’s revenues or its August 1999 initial public offering. But they can still have the satisfaction of knowing that they collectively built an operating system — using nowhere near the money and resources their competitors had — that is now preferred by many over the ubiquitous Windows. May the Force Be with You The Monk and the Riddle, by Randy Komisar, with Kent Lineback (Harvard Business School Press, 2000) Let’s get this out of the way before we begin: Yes, there is a monk, and yes, there is a riddle. You see, it’s about an egg, and … oh, never mind. What this book is really about is the education of a fabled Silicon Valley entrepreneur. Author Randy Komisar is not that entrepreneur. He’s what he and his pals who hang at the Konditorei coffee shop like to call a “virtual CEO.” Venture capitalists, we’re told, bring in Komisar to meet with prospective company founders to get a sense of whether the prospects have the goods. The entrepreneur in this tale is a guy Komisar calls Lenny, a fellow who wants to start a business called Funerals.com. Komisar meets with Lenny and hears his business pitch, but he’s not sold that Lenny has the right stuff to make him worthy of a VC’s cash. Ultimately, Komisar does give Lenny and his partner, Allison, advice on the importance of turning their endeavor into something that not only has big financial potential but also is something about which they’re passionate. The rest of this parablelike tale unveils how our fledgling entrepreneurs get from Funerals.com and zippo capital to Circle-of-Life.com and “interested” money — plus what Komisar likes to call a “whole life plan” for themselves. Komisar clearly has experience and a levelheaded way of looking at the world of Internet start-ups and the capital that’s chasing them. He also draws a distinction between passion, which ” pulls you toward something you cannot resist,” and drive, which ” pushes you toward something you feel compelled or obligated to do.” To Komisar, passion is clearly the preferred motivator. If you know nothing about yourself, Komisar writes, you won’t be able to tell the difference between the two. It’s clear we’re meant to believe that Komisar holds answers and wisdom. (Why else would people with big bags of cash call on him for advice?) But since he is narrating Lenny’s story, it all comes off a bit too pat. Komisar sets himself up as the omniscient wise one, and he manipulates the device of coaching Lenny for his own purposes. When Lenny seems to miss the point at first and then appears to get much smarter as he comes around to Komisar’s way of thinking, the author can give himself a good pat on the back. And the transformation is not entirely believable. You begin to feel that at any point in the story, Komisar will pull out his laser sword and cant: “Lenny, the Force is strong within you.” In the hypercompetitive digital economy, you don’t need wizards and shamans. Sure, you might need a smack upside the head from time to time when you fail to see the obvious. But a sage who encourages passion but fails to stress the importance of cash flow ultimately may spell the end of your business plans. Of course, that would give you plenty of time to answer riddles…like the one involving the egg at the start of this book. If you’re not busy building a business, you could look it up. Executive Reader David Liu CEO of the Knot ( www.theknot.com), a wedding-planning Web-based company All-time fave The Brothers Karamazov, by Fyodor Dostoyevsky. “It gives you an appreciation of life on a moment-to-moment basis, which is often how you feel when you’re running a start-up,” Liu says. Recent fave The Tipping Point, by Malcolm Gladwell. “Gladwell articulates how viral marketing happens. It’s a counterpoint to most of what I’ve read about online branding. So much of what happens in the consumer world — and the Internet just accelerates this — is by word of mouth.” Best business book A Sense of Where You Are, by John McPhee. “This book held particular significance for me as a lifelong Knicks fan. In business and in sports, you have to recognize that you can’t do it all by yourself. You need to recognize the strengths and weaknesses of those around you and be able to leverage them. That’s how Bill Bradley threw those no-look passes.” Best book for newlyweds Tao Te Ching. “When my wife and I were newlyweds, we got a copy as a gift. If we had a question to work out, we’d open it up, point to a page, and read the passage. That was really very fascinating,” Liu says. –Jill Hecht Maxwell Please e-mail your comments to editors@inc.com.