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Great Bridge Out; Caldera in Trouble 212

tim_maroney writes: "CNET's news.com gives us a pair of open source disaster movies today. Great Bridge, an open source database maker which refused a bid from Red Hat earlier this year, will lay off 38 of 41 employees and close its doors. Caldera, a seller of Linux and UNIX versions, announced layoffs, plummeting revenues, and a reverse stock split intended to allow it to be relisted. Not a happy day for fans of open source business models."
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Great Bridge Out; Caldera in Trouble

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  • Alternatively this could be seen as a good indicator that companies involvement in open source has to be all or nothing. Look at all the Linux companies around; how come Caldera's doing worst out of everybody, and they're the most-proprietary ones?

    On a different note, what happens to SCO Unix once Caldera dies?
    • Re:Not quite (Score:3, Insightful)

      by cartman ( 18204 )
      All open source companies are doing badly.

      Suse recently had to be bailed out by IBM and Intel to prevent it from closing it doors.

      VA Linux has exited the hardware market and is losing money hand over fist. It appears that VA Linux does not have much time before collapsing.

      Corel is selling its _entire linux arm_ for $2 million, which is virtually nothing.

      Ebiz, which merged with LinuxMall, has been delisted by the Nasdaq, is trading at $.04/share, has only $1,000 in the bank, and will collapse shortly.

      Red Hat, which is by far the most successful of the group, has lost over 97% of its value and is trading at 1/8th its IPO price.
      • Re:Not quite (Score:2, Informative)

        by psicE ( 126646 )
        IBM and Intel have very large open source interests of their own, and IBM, if they could help it, would move entirely to an open-source model. Intel just works with whoever makes them the most money, and therefore they have agreements with both Microsoft and Linux companies. This is why I don't buy Intel.

        VA exited the hardware market, thereby committing suicide. It's become obvious over the past years that the money is to be made selling hardware, not software. If VA was more successful selling hardware, they'd probably be a big name (or be acquired by one) by 2005.

        Corel is not selling their Linux arm, they're licensing it. After about 2 years, they have the option to renegotiate the licensing, sell it outright, or keep it for themself (AFAIK).

        Ebiz has no real product, and if they do it's nothing special (ThinkGeek is bigger than LinuxMall, and both of them are so insanely small it's not even funny).

        The only thing making Red Hat "by far the most successful of the group" is their preloading deals with Dell et al. Mandrake's stock price is actually pretty stable; it's been around 6 euros for the past month. I expect it to stay around for a while longer.
        • Re:Not quite (Score:2, Interesting)

          by soloport ( 312487 )
          Who cares? I think where most (people, press, Microsoft) make the mistake in presumption is that BusinessModelFailure == OpenSourceFailure.

          Seems like, so far, open-source software efforts are rather impervious to any single companies failure.

          So what's the big deal?

          . -- Micro-sig
          • Who cares?

            All the people with money to invest who've been trying to decide if "open source" is a potential business opportunity or just a college hobby.

            Interesting question -- if all the Linux companies go down, will hardware vendors continue to think its worthwhile to port their drivers to Linux?

            Worse yet, given the track record of Sun, HP, IBM, and SGI on UNIX, are we going to see (possibly proprietary) Linux variants that are incompatible with each other if these companies are the ones left supporting Linux?

      • Well, I always thought that Free software and
        business model are incompatible. That does not
        mean something is wrong. Simply, free software is
        Software standards are the standards of today's
        technology so all industry players must have
        equal access to all software. Experience shows
        that only an open license guarantees it. Hence
        the real business model is for hardware vendors
        to sponsor software development whose products
        would be open and free, thus leveling the playing
        We already have this model and it is a success.
        W3C develops a lot of software by itself and it
        is an industry sponsored group. Their software is
        open. IBM bailing out SUSE may start a trend where
        distinguished projects get industry support and
        survive on that. KDE league and the Gnome
        Foundation seem to be trying this approach too.
        I believe that if your goal is to level the
        playing field then you will always have to accept
        the price that the poorest user can afford
        (often zero). It's charity not business but it is
        perfectly viable.
      • Re:Not quite (Score:3, Insightful)

        by ProfDumb ( 67790 )

        All open source companies are doing badly.

        Really? I bet that IBM is by far the largest OS company in terms of $$ spent on OS projects ($1,000,000,000, or so they say) and they seem to be doing pretty well. Everyone cries "Who will make a succesful service business that supports open source?" The answer: IBM.

        Red Hat, which is by far the most successful of the group, has lost over 97% of its value and is trading at 1/8th its IPO price.

        RedHat's IPO price was an insane reflection of the IPO bubble. IIRC, Red Hat claimed to be on the border of profitability just before the IPO. The IPO market (insanely) required them to up their "burn rate" to build for future expected profits. Now that the financial markets have returned to sanity, Red Hat looks to be returning to profitability, at least on a cash basis (the depreciated "good-will" accounting charge will haunt their official accounts for a while longer.)

        • >i>IBM is by far the largest OS company in terms of $$ spent on OS projects ($1,000,000,000, or so they say) and they seem to be doing pretty well. Everyone cries "Who will make a succesful service business that supports open source?" The answer: IBM.

          It may be. It isn't now. They are spending money on open source, not making money on it. It may work out for them, but it's way too early to cite IBM as an open source success story. They could just as easily become one of the cautionary tales.

  • by Zagadka ( 6641 ) <[zagadka] [at] [xenomachina.com]> on Thursday September 06, 2001 @06:15PM (#2260762) Homepage
    T-shirt sales can't pay developer's salaries?!?

    • Everyone knows real software companies use coffee cups for promotion.

      "My boss built an RDBMS company and all I got was this lousy t-shirt"
  • by Anonymous Coward
    You don't make money on stuff you give away for free. Has anyone figured that out yet? You can make money on SERVICES for people who accept a free gift from you. You used to be able to make some money on hardware attached to free software.

    What part of $0 doesn't anyone understand?
    • Not to say that you can offer the same services for non-free (both meanings) software.
    • IMHO the only way of financing OpenSource is by getting money for writing features. Features can be written by a company's developers in-house, or by paying a 3rd party for it. Unfortunately 'paying a 3rd party for it' is quite complicated for mainstream features. While a CPU-manufaturer may be willing to spend a few millions for a port of a compiler to his new architecture, no one will be willing to spent so much money for basic desktop features, so you would have to bundle people's money. I'm sorry things like Sourcexchange and CoSource did not work out, but from what I have seen the people just demanded unrealistic (large) projects instead of paying for single features for existing software.

      I doubt that you can finance software with support, and I am quite sure that selling free stuff is not a good business model.

    • You don't make money on stuff you give away for free.

      Tell that to Microsoft they gave away IE.

      It's the business model. How do you make money? That is the question. Red Hat seems to have found a way.

      • No. Microsoft did not give IE away for free, they were simply buying marketshare. The money they spent on IE was much better spent than any money they could have spent to advertise their products. MS might let you have something for free, but they are not giving it away. There is a big difference.
  • "Open Source Business Models"

    Not flamebait, it's a joke.
  • ..but I think open-source software companies have a place, just not in a world with closed-source software companies. Of course, for those that mix the two there might be a way to make it work, but developers have to eat too.

    I wonder if O'Reilly (www.ora.com) had a software arm, how well it would do.
  • VA Linux is also going through tough times. I don't suspect that they'll last much longer with the kind of mass they have. It must be expensive to support ALL of OSDN plus try to run a business.
    • Yeah, and then they go dump the only *product* line they had: hardware. It's inconceivable that they'll be able to continue making payroll using only the banner ads on SourceForge and Slashdot.
  • Poor Caldera (Score:2, Informative)

    by xwred1 ( 207269 )
    Its too bad they are hurting so badly, they had some cool Unix stuff at Linuxworld.

    At their floor area, they had one of the lead programmers of their Unix project there to give us a demonstration of their modified Unix kernel.

    Basically, they added Linux syscall support to their Unix kernel. Whenever a Linux binary is loaded, it is automatically chrooted to /linux and operates out of there. The Unix kernel implements the Linux syscalls itself, so under high loads it ends up performing alot better than native Linux, or at least, thats what their graphs showed.

    The thing that is the worst about all of these companies hurting financially is that some genuinely cool tech is lost when they go bust.
    • >The thing that is the worst about all of these
      > companies hurting financially is that some
      > genuinely cool tech is lost when they go bust.

      nothing's lost...it just gets set aside for someone else to pick up.
      that's what the GPL is for.
  • Links (Score:2, Informative)

    by Jim42688 ( 445645 )
    Look at Caldera's third quarter results on Businesswire here [businesswire.com]. They're blaming it on the aquistion of
    Tarantella. Also here [caldera.com] is the official press release on the third quarter results.
    • At least they're taking accountability for stupid business practices and not blaming "economic conditions" like the dot.bombs.
    • Caldera did not buy Tarantella. Rather, they bought the SCO Open Server and UNIXWARE products from SCO, leaving the newly renamed company Tarantella with the Tarentella product.
  • Just wondering: does anyone know how RedHat is doing these days?

  • by smcavoy ( 114157 ) on Thursday September 06, 2001 @06:26PM (#2260819)
    Has anyone else noticed that *ALL* business models are affected, not just the open source??? The O/S model is really just starting out, consider that when you compare them to hp or compaq or whoever. You'll see that they are holding their own. Which is amazing considering how radical the O/S model is compared to the closed source model (not so much caldera, their kinda like a leech). The WHOLE ECONOMY is in a "downturn" not just this "crazy" market..... geezz... /. has become the MTV of the geek world....
    • Somehow, for the Open Source arch enemy, Microsoft, "economic downturn" means growth of maybe 20% rather than 30% p.a. Also, considering the sheer number of non-open-source software firms - which in general even in these difficult times are still doing better than the rest of the economy, and comparing it to the number of reported open source failures, shows that there's something fishy about the whole open source "business model". Spend money developing software then make money on services? Fine, what about your competitors who make money on services anyway and don't have the huge money drain of SW development?

      Please. Linux/open source need success stories, not rationalizations.

  • Business models (Score:2, Flamebait)

    by KingAzzy ( 320268 )
    Not a happy day for fans of open source business models

    Well, that's because there isn't much of a business model behind open source. It is a fascinating grass-roots movement but the timing for it as a sound business strategy is definitely off right now.

    Open source will continue to flourish in the realms of academia and those who are not after material wealth but start up ventures like the above will continue to bleed.

  • Great Ghost Bridge (Score:4, Insightful)

    by N8F8 ( 4562 ) on Thursday September 06, 2001 @06:28PM (#2260838)
    Great Bridge just never really existed. Just as the company was formed the bottom fell out of the tech market. Add to that the virtual commodity status developing in the low-end database maket. In a way it was a company without a soul. Successfull Linux startups seem to grow from a core of true believers. Most of the startups we see flopping out now never really had that. Companies like RedHat, KDE and VA will continue because of these people. Pofits are great, making money is great, but in the end the people behind these companies will continue doing what they are doing because they love what they do.

    • by swright ( 202401 )
      Nevertheless its going to be hard explaining to my boss that the company that 'owns' the database we just migrated to has gone bust...

      (he wont get the community support thing that will keep Postgres going, or that Great Bridge didnt follow the Company forms, brings out product, sells product business model...)
      • by N8F8 ( 4562 )
        But he probably understands the risk versus return business model. He chose to take a chance on a new company. If the chance proved successful he could have saved some money. It didn;t pan out. Still, unlike other traditional product failures, at least your boss has the option of going to another PostgreSQL support vendor. If this were a closed source product he would be up the creek without any paddle. I sure hope he didn't pay a bunch up front for the service contract.
      • Then "switch" to the Red Hat Database, after all it is PostgreSQL 7.1...
        • Interesting point...Does this then make RedHat into the Free Software parallel of Microsoft? Please think about it before branding my post as flamebait. Great Bridge didn't sell, so RedHat sez "Resistance is futile. Your technology and culture will be adapted to service us"
          • I talked to few people who knew whats going on inside Great Bridge - sales were not something impressing, and the money the company had was spended very fast.

            Redhat suggested to aquire them, they refused (the CEO was on the board of directors of Red Hat before he left to found Great Bridges - if I'm not mistaken)

            So, Redhat wanted to have a database to sell to their customers, PostgreSQL is open source, so Redhat tried to go by the book - Aquiring the company and it's expertise in this field. Great Bridge refused, Redhat took the open source version and sold it as "Red Hat database".

            Whats happend? customers know Redhat. They don't know who is Great Bridge LLC. They need a solution and support - and the only name they know is Red Hat (I'm talking about corporate customers) - so they turn to Red Hat which happily signs with them a support contract, and Great Bridges LLC looses another deal.
    • by update() ( 217397 )
      In a way it was a company without a soul....Companies like RedHat, KDE and VA will continue because of these people.

      I don't know -- VA's soul is a vendor of Linux systems, and maybe some kernel hacking to optimize those systems. What's left is Sourceforge, a bunch of unprofitable web sites, a company that sells soda and mints and their new proprietary software business.

      Slashdot, Freshmeat, K5 and the like do have a soul and a core of believers, which is why they'll continue to exist in one form or another. Themes.org has a soul, but apparently lacks a brain.

      KDE, by the way, isn't a company and isn't supposed to make any money. Of course, that also makes it particularly recession-proof...

  • Great Bridge, a Norfolk, Va., subsidiary of Landmark Communications, will close, and 38 of its 41 employees will be laid off, said Frank Batten, chairman of parent company Landmark and Great Bridge's founder.

    Will they just sit around and keep getting paid due to some accounting glitch, or what?

    (although, I'm guessing they'll work for the parent company...)

  • What's mySQL AB doing right that others are missing? I may be mistaken here, but it would appear that mySQL (and some others) have thus far weathered our current economical storms fairly well.

    Anyone have any idea what's inherently different about mySQL's business model? Or is it simply that they've got the advantage of public opinion already on their side?

    • We fully believe in open source and in business built on it (ENTIRELY open source). So far it has worked outnicely.

      Our model differs from the one of Great Bridge. We maintain control of the database kernel so that we can sell commercial licences to those numerous companies who need a non-GPL licence. We also have a strong and widely known trademark. MySQL AB offers support done by the core developers. This allows us to offer a total product and service package that is in line with the open source / free software thinking and also makes sound business sense.

      Marten Mickos, CEO, MySQL AB
      • More to the point, you didn't hire 41 employees before figuring out how many employees your market would support. Although I admit that GPLing your product does give you an advantage that Great Bridge didn't have. When NuSphere came along to try and steal your business they quickly realized that they couldn't sell commercially licensed copies of MySQL, nor could they integrate closed source add-ons to MySQL while you folks at MySQL AB can.

        When RedHat decided to market their "RedHat Database" they undoubtedly were glad that PostgreSQL was BSD licensed. That means that they can literally consider the source code their own, and can relicense it however they want. This is certainly good for RedHat, but it is bad for the folks that have poured heart and soul into PostgreSQL only to see RedHat reap the rewards.

        If I was RedHat I would immediately create a highly value added addition to PostgreSQL and release it under the GPL (replication comes to mind). That would force PostgreSQL users to choose between a stock BSD licensed PostgreSQL or an enhanced GPL licensed PostgreSQL. For most users the difference in the license is minimal, they get free software with source code either way. However, RedHat could probably shift most of the development resources away from the BSD licensed version to the GPL one which they would control in much the same way that MySQL AB controls MySQL development. They would be the only vendor that could sell commercially licensed variants.

  • Not a happy day for moronic business decisions is more like it. To refuse an offer from redhat in the climate we had 6 months ago, and could expect for some years to come, was stupid. For Caldera to shit on Open Source, which was their only gravy train was equally stupid. Let them both rest in peace.
  • by standards ( 461431 ) on Thursday September 06, 2001 @06:33PM (#2260866)
    Jet engine manufacturer Pratt & Whitney learned long ago: sell your engines at a loss. The real money is in service.

    At the time, IBM happened to be piloting System R (precursor to DB2) at Pratt & Whitney. And they learned there: Virtually give away the software, and make money on your services. And that's why IBM global services is such a powerful consulting force today. Global Services is the real profit arm of IBM.

    But IBM ain't dumb. Of course, IBM global services prefers IBM products, but they'll support Solaris and Linux and VB apps too.

    And that's the rub. Most Open Source-centric companies don't have deep pockets, but only support a narrow field of Open Source software.

    The fact is guys, it's hard to support 50 new employees on a brand new, growing marketplace. It would be wiser to support existing commercial products while pushing your own [open source] agenda. Heck, that's the successful IBM GS model (sans the Open Source bit).

    Grow up guys, get off your high horse and step into the real world. You can't start a company hoping that all your customers will knock on your door supporting your agenda. But you can can fight for your utopian dream by FIRST supporting your customers, and only SECONDLY by showing your customers why your ideals are best for THEM.

    • IBM global services prefers IBM products, but they'll support Solaris and Linux and VB apps too.

      And IBM is working to turn Linux into an IBM product, I think.

      one BILLION dollars into Linux development? This is not a small move, even for the ten-ton gorilla of computing.

      ten years from now, they'll have probably replaced AIX with Linux. and be perfectly happy, selling systems (all perfectly Linux-tuned; after all, all their Linux engineers release drivers for every new piece of IBM hardware) and crippling Microsoft (you watch: the dominance of Windows is in large part due to the payoffs M$ has historically made to third-party software companies to develop software, especially games, for Windows; what stops IBM from doing the same for Linux?)...

      the hardware monopoly is what IBM is after. again. there's a lot more money in it than there is in the M$ software monopoly. certainly the disappearance of Compaq, the company that broke IBM's monopoly the last time (and which bought Digital, the only company to seriously threaten IBM before the '80s) cannot fail to encourage them.

      • This has to be one of the most sane things that I have read here in a very long time.

        A very simple concept- that it is why it would probably be incredibly effective.
      • by Anonymous Coward
        I agree 100%, except for that
        "the hardware monopoly is what IBM is after"

        I think IBM is after software, hardware, and services.

        If you've ever work with IBM Global Services guys, you'll learn two things:
        1. They're mostly very smart, experienced people.
        2. IBM MQ Series might be a good solution in this area, even though this is a Solaris shop.

        And there we have it. Smart guys, and they push their own stuff, sustaining themselves and IBM on the whole.

        I'm not here to push IBM, just to say that Open Source companies should learn something from this:
        1. Be smart
        2. Support your customers
        3. Support what you really believe in.

        IBM guys really believe in MQ. And that's great. I don't, but then again I really haven't worked with it, and I don't think I have the need. I digress.

        In a nutshell, Open Source businesses believe in Open Source. They must also support their customers by being smart, and they can't allow their ideals to negatively impact their customers.

        Ease 'em into it boys. It can't happen over night.
    • The fact is guys, it's hard to support 50 new employees on a brand new, growing marketplace.

      Indeed, this was Great Bridge's mistake: they staffed up before they understood the size of the market. A smaller company could have been profitable.

      • Well, a company, specially like Great Bridges LLC could takes RedHat had thrown to them, maybe negotiate for a better deal - but join Red Hat.

        You don't refuse to a company which has 70% of Linux, specially if you're out of cash and your bidder can put you out of business within few months...

        Another example of stupid CEO & board of director.
    • You said it. It's hard for a Linux zealot to think this way, but normal businesses don't care about the FSF and the open source crusade; they don't care about X11 or gcc or ssh. Most IT folks in real businesses barely know WTF they are doing, so they pick the mainstream vendor with the GUI interface and firmly believe that market share proves quality and that anything they can't get working is due to their own problems.

      Against this backdrop, they're not going to go out looking for obscure platforms (meaning !=Windows to them) and companies which only support these obscure platforms. They're going to pick a big company that will help them with what they have now, and who can make a convincing argument about having skills for more complex needs and future enhancements. A company like IBM could plausibly get some Linux boxes in because they're not spouting irrelevant platitudes about freedom; they're talking business and are fully capable of dealing with the answer "I don't care, do it with Windows anyway".
    • You can do this with anything, it's one of the oldest novel business models. People don't realize how many companies sell their most valuable product at a loss: The Gillette Mach3 razor cost many millions of dollars to develop, is sold well below cost, and the replacement blades make up the difference. Video game consoles, ditto, profit is in game licenses. On and on....

      And support is a far more lucrative business than general-purpose software. Much of the cost of support is marginal. If you provide h engineer-hours of support, and charge r dollars/hr, pay the support team c dollar/hr, your profit is h(r-c) dollars, which is always positive. (This assumes no overhead costs, which is why small many Linux companies fail, because the overhead costs overwhelm them.)

      Selling software at a flat rate is a tremendously risky business. You pay $d to develop it, and sell n copies at cost c. Your profit is d - cn dollars, which can be negative. One dud product and you're out of business. This is why there is only one large company on the face of the planet that generates a substantial amount of revenue from software - Microsoft. For them, the risk is mitigated to an absurd extent because n will be very high no matter what because people are forced to buy their products. And this is why MS places such a low priority on quality - they don't get more money for high quality software. Making Windows more stable increases costs but doesn't affect revenue substantially. This is why in 2001 my Windows box still locks up all the time - because implementing full memory protection and a host of other features common to every other OS wouldn't earn them another cent. It helps a lot that I can't return their software when it fails to meet expectations. (This is why each successive version of Windows is flashier, but not necessarily better from a technical standpoint.)

      It makes far more sense to "sell" free software, have little general-purpose development, and provide services (including specialized development), which offer better and more predictable profits.
  • should form with the best representative developers from each distro.

    Yes, a linux monopoly, while preserving open source philosophy and various linux flavors.

    -advantages: fanatically dedicated, growing market for free software
    -encourages cross-fertilization of ideas between distros
    -unified, centralized tech support
    -less duplicated efforts in development and support
    -coherent business model can be developed when there are fewer competing models of Linux
    -larger company with pooled capital (if there is any) viewed more favorably by market

    Stop trying to compete with microsoft! There are constituencies which cannot and will not use Bill's software for their computing needs. These people will continue to use linux and ancillary services and the less overhead involved the better for a company dealing with a finite market.

  • Half a bad thing. (Score:4, Insightful)

    by sydb ( 176695 ) <michaelNO@SPAMwd21.co.uk> on Thursday September 06, 2001 @06:34PM (#2260872)
    I never liked Caldera, and don't really care that they are gone. They were half-hearted about Free Software / Open Source and I could never understand why they stayed around.

    Great Bridge on the other hand is probably a real loss. They stood for the Service & Support business model. I shed a tear.
    • Great Bridge on the other hand is probably a real loss. They stood for the Service & Support business model. I shed a tear.

      Perhaps the Service and Support model doesn't work for software, or at least certain kinds of software. Postgres was a developer's tool. Developer traditionally need less support than other user.

      Service and support might work for some categories of software, but for most categories, I haven't seen it work anywhere. It might be possible, for sure, but I just haven't seen it. I'm guessing that that Great Bridge's dropout is a signal that hackers should stick with hacking, instead of devising radically new business models and then accepting on faith that they work. Sometimes reality doesn't operate the way that CaTB says it should.

      Instead of Service and Support, perhaps they should have used Cygnus' model for financing freeware developer tools: Consultation and Customization. At least that one has been proven to work in the long run by both closed and open development firms.

      • Indeed. We need a "rich tapestry" of business models based around free software so that evolution can take care of progress.

        In that context, I don't mind seeing the passing of 'service and support', if that is to happen.

        I am not yet convinced it will though. One of the problems I had with Great Bridge was that they don't operate from my country... hard to explain to your local PHB that your 'service and support' is based across the Atlantic. Otherwise, I might have been able to sort out a contract with them. I don't know of a UK based alternative. I think 'global' or at least 'nice bits of global' might be an idea.

      • Perhaps the Service and Support model doesn't work for software, or at least certain kinds of software. Postgres was a developer's tool. Developer traditionally need less support than other user.

        Oracle has a big consulting arm - you buy oracle first, which isn't cheap. Then you spend much more on their consulting afterwards

    • Um... Caldera isn't gone.

      In fact, if you look at the quarterly results, the annualized results from the past quarter come out to be up near $100 million, in the same ballpark as RedHat, and with a better overall profit margin. It's just that RedHat has more money in the bank, so they can ride out their losses longer than Caldera can without cutting staff. Hence layoffs.

      If Caldera can ride out the slump, the company's going to be in very good shape.

      • Sure, they're not, but I wouldn't mind too much if they were :-)

        Of course I care about their employees and so on, just as I would worry about Microsoft's employees if they were to go down the tubes.

        Caldera has SCO-type ways to make money. Frankly that is not relevant to my life in any way, shape or form and I'm thankful for it.
    • So, because you and a bunch of other guys with strong and obviously uninformed opinions doesn't like Caldera for some totally contrieved reason, they should go? Is it Caldera that sued Sklyarov? Is Caldera the one who has monopoly power over desktops or browsers? Is Caldera one of the companies that lobbied for the DMCA?

      And why is that you pleople consistently forget all the stuff Caldera engineers have, indeed, contributed to the OSS community?

      I think it would be fair if someone from the competition (RedHat, SuSe) set the record straight on this issue, because they know very well how much did Caldera engineers release under the GPL, and is now included both in the Linux kernel and in the userland.

  • by macsox ( 236590 ) on Thursday September 06, 2001 @06:36PM (#2260883) Journal
    so they're laying off 38 of 41 staff and closing the doors? someday, open source archaeologists will reopen those doors and find their three skeletons surrounded by mountain dew cans . . .
  • Well I certainly hope this doesn't mean that PostgreSQL is in any danger. It's a great piece of code.

    Anyone know how many, if any, of the development team were employed by Great Bridge?

    • Re:Great Bridge (Score:3, Informative)

      by Ridge2001 ( 306010 )
      Anyone know how many, if any, of the development team were employed by Great Bridge?

      From an interview [lwn.net] with Bruce Momjian last year:

      So for example, one of the first things we decided was that no more than a few of the core developers could be hired by one company. We clearly stated this to Great Bridge. We did not want a case where they basically just came in and hired everybody, because people outside the group would say "Well, who are we working for now? Is this an open source project, or is this just Great Bridge working on Postgres?" So it was a very deliberate thing to say that only a few people would be involved with Great Bridge.


      We have three core developers hired by Great Bridge.

      • Re:Great Bridge (Score:2, Informative)

        by Moosbert ( 33122 )
        So for example, one of the first things we decided was that no more than a few of the core developers could be hired by one company.

        The interesting thing here is that they changed the original "two" to "a few" after the third one got hired.

        • Re:Great Bridge (Score:2, Informative)

          by bmomjian ( 195858 )
          Wow, good memory. Yes, we changed from two to a few and decided we needed to keep an eye on this. As it turns out, the three of us never agreed in many cases anyway, showing we were still making company-neutral decisions.
    • Well I certainly hope this doesn't mean that PostgreSQL is in any danger. It's a great piece of code.

      I would think this is unlikely. Isn't Red Hat's new database product either postgres or based on postgres? I would imagine that it will live on in the corridors of Durham, NC.

    • Probably half of the people I saw standing outside thier offices, which are a block and a half away from my apartment. ^_^ Of course, for being just laid off, they were all standing outside laughing and smiling.

      Landmark Communications has overstretched themselves and tried to dip thier hands in too many pools anyways. In June of 2000 they cut the entire ISP division of InfiNet, a Landmark company, and have since trimmed down their newspaper hosting facilities , and don't seem to be faring well when it comes to employee retention.

      So, anyone looking to buy a business? Call Landmark. ^_^
  • will lay off 38 of 41 employees and close its doors

    I guess the 3 remaining employees will work 'behind closed doors'? hmm... wonder what they're up to?

  • I'm going to make 2 assertions:

    1 - In order to get paid for something you have to be able to withhold whatever is that's being paid for. You can't say, "I'll give this to you for $100 or for $0 and expect many people to pay you.

    2 - Businesses require money to survive. Duh...

    This makes Open Source Business Model seem a little stupid. I know that there are companies doing well out there in the Open Source arena but they are not selling software! This is where the distrobution companies seem to get trapped. They have to put together a great distribution which is expensive but they really have to sell services which are expensive. Most of them suck at the service part ie. tech support, update services, etc which is the only place they can really make money. Caldera thought they got the idea when they changed their licensing but they are trying to sell something that anybody can get for free or so it seems.

    The bottom line is all important to a company. I suspect that all of the distros will die except one or two within the next 18 months. The few remaining will either have some great support or update service that will drive the business or they will be supported by the likes of IBM in the pursuit of hardware sales (never free like beer). Debian of course is mostly imune to all of this which is the beauty of it really.
  • by TheFrood ( 163934 ) on Thursday September 06, 2001 @06:49PM (#2260945) Homepage Journal
    To the best of my knowledge, Caldera's business model isn't really an "Open Source" model in the sense that, e.g., Red Hat's is. Red Hat makes money by giving away software and selling services. Caldera tries to make money by giving away free software (Linux) and selling proprietary stuff along with it.

    Remember that Caldera CEO Ransom Love publicly said that he agrees with Craig Mundie's statement that "Open Source is bad for business". That's because even though they give away Linux, at the end of the day they still make their money by selling proprietery software, just like Microsoft.
    • Remember that Caldera CEO Ransom Love publicly said that he agrees with Craig Mundie's statement that "Open Source is bad for business".

      In fact, he said nothing of the sort, though what he did say has been widely misinterpreted along those lines. He's extremely outspoken in favor of the open source model.

      What he said was, "Microsoft is attacking the open source movement at its weakest point--the GPL" (which is true; from a FUD standpoint, the GPL is precisely the most vulnerable aspect of the movement--that's not a statement of dislike for the GPL, just a statement of sales-and-marketing reality). He also said that in releasing its own projects to the community, Caldera would choose whatever license made the most sense from a business perspective, and that sometimes that would be the GPL, but other times it might be the BSD license.

      I've met Ransom Love and talked with him at some length, and he's a good guy. He's gotten this reputation for being anti-GPL, and it's just completely undeserved.

      Note that when Caldera announced it was open-sourcing some UNIX utilities last month, it used the GPL.

  • I'm really not surprised that Caldera went out of business. I remember that I first learned linux using a Caldera distribution. I liked the distro, but installing new software was a pain because the libraries weren't in the standard places. Once I toured Caldera's office and I remember the tour guide saying something to the effect of "I know we have a lot of library problems, hehehehe" like it was no big deal. Any company with that attitude was doomed to go under. After I heard that, I switched to another distro.
  • I am not sure how "Open" Great Bridge was/is - something is telling me that they weren't Free (aka GPL).

    If they were, no one would or should care - because the software could continue on - which is the ONE thing that makes the GPL truely shine: no more worries about losing support on a product (at least if you can continue to roll-it on your own).

    Looking at their dev site (www.greatbridge.org) - it seems like they didn't do the GPL thing...

    Anybody know more?
  • Let Caldera Die (Score:5, Interesting)

    by SubtleNuance ( 184325 ) on Thursday September 06, 2001 @07:19PM (#2261134) Journal
    Not a happy day for fans of open source business models

    What? Caldera buying SCO was the biggest bone head move of all time - they bought the least-likely-to-survive Unix on the planet when faced against Linux. I understand some of the motivation was for their distributors, sales channels and support/tech but really, SCO was a pile of bricks. Bad Move.

    On top of it all, Caldera, under the lead of Ransom Love, has got to be the least amiable of the Linux Companies - he has said some *very* stupid things and really dosnt *get* what GNU/Linux will do to the software world... frankly, im glad to see the "Caldera Company" go. On the other hand, i do feel some pain for their employees - best of luck to the *people* involved.

    • I've already replied to someone else who made the same remark, but I want to reiterate: the "very stupid things" Ransom Love is alleged to have said about open source were complete fabrications. He never said them. I know him, and I've talked to him about it--all those anti-GPL statements he's reported to have made are just bogus, and do not reflect his actual opinions at all.
  • by superid ( 46543 ) on Thursday September 06, 2001 @07:19PM (#2261135) Homepage
    It's a bad *implementation* of a business model. It reminds me of the old joke "theres a whorehouse over a bakery, which one goes out of business? Answer: The bakery, cuz theres too much fsck'ing overhead"

    Have you ever browsed through news stories over the past year and heard about dot-bomb.com laying off 50, 100, 200, 500 people and wondered to yourself "how in the world did they employ that many to begin with???" There are many examples of potential successes that were hampered by overspending and poor planning. I have no idea if /. is making any money, but I'll bet that if they hadn't been bought, that the minimal staff could have done quite well. Giving away software and selling service can work fine if you don't staff up before having customers.

    I run http://www.freesql.org:27960 to give database newbies a place to play for free, I do it on a shoestring. Obviously if I hired staff I couln't survive.

    I hate to say it but perhaps what the tech world needs is a few more MBA's


    • I hate to say it but perhaps what the tech world needs is a few more MBA's

      Bullshit. MBAs are the ones who desperately need to "manage" someone. If they haven't got scores of people to "manage" or they become irrelevant too. Between 1997 and 2000 I worked for a small shop (~20 developers) and we had a steady income and the company was profitable almost from day 1.

      Then I moved to North America and found a new job (which I no longer hold btw). This time it was a company doing stuff that was simpler than my former employer yet the had ten times as many employees, aeron chairs, $20,000 projectors and all the other dotcommers shit. But mostly they had the human overhead. I worked there with two other blokes on a Windows Media codec for IP multicasts and for that simple project I had to report to:

      • Project Manager
      • Product Owner
      • Project Designer
      • Functional Architect
      • Technical Architect
      • Customer Specialist
      In other words I had six dorks circling us and making important faces trying to pretend that they were actually being useful but in reality they were as pure an overhead as one can imagine. No purpose, no work, just talk, talk, talk. And despite this whole muppet show they still couldn't sell much despite having an entire army of marketing drones.

      The former company is doing just fine (expanding even!) while the latter is well... fucked. The former company was founded by a PhD (in geology) the latter was founded by an MBA who "carefully studied and analysed the market space before committing investors money".

  • How do you build a reputation in 18 months? How do you show your clients in 18 months that your solutions will help them?

    Microsoft took three years to get IE to the level it's at now. They spent over 100 million (as per some old stories, don't have anything to backthis up with). How did they ever expect to get a stable client base in such a short time.

    It takes 5 years to get a business started. Establish a reputation. Establish a client base. It's not easy, the only people who claim it's easy are those who are looking for VC funding. It requires hard work, marketing, money, and most of all satifying your clients.

    So let's learn from this and buget, plan, and learn from these failures because one day in the not so distant futur we will have successfull Open Source Service providers.

    • Microsoft spend 6 years so far developing IE, and they bought the initial code from SpyGlass, so you can tack on their development time. That's a lot longer than 3 years.
      • So I guess the problem is marketing. We need to get the product out faster in order to create a demand for these services. We need to setup a Open Source marketing strategie. For all you geeks who own your own corporations,,, Why not link to other geeks who support Open Source.

        We need to setup an OSDN for networking, as in MARKETING not TECH. We should be referring clients to one another. If I can't service an area who can I send this client to? Mabey split the revenue based on the work done. Mabey setup a service revenue sharing agreement. Have it as GPL and keep working on it till we have something we can trust.

        If you have any other ideas just add them here...

  • There is no such thing as an "open source business model". Open source does not make money, support does (sometimes). The only reason RedHat is making any money is because some time ago they took advantage of their hype-inflated stockprice to buy a profitable company (Cygnus).
  • From what I saw at the expo Caldera had a really kick ass product. They're webmin tool is way kewl too. They need to seriously lobby for money, I think it is well worth the effort to keep them around
  • If Linux wants to make money, I recommend they follow a model that works...AOL!

    Now before you laugh, consider it. Wouldn't it be nice for the basic user to have all that free software just installed and updated on their system once it comes out, appearing as a shiny little KDE icon, just as easy as an AOL update? Offering options of what they can download?

    All you'd need to do is to make a distro with a daemon that connects to a "Linux service provider" to get updates once they connect to the net, then manages the installs for the user through idiot proof wizards. They'd never have to touch a command prompt, It would all be placed on their desktop automatically.

    The best part is, you could CHARGE for the service, and start spamming the world with Linux CDs that offer the "first two months" free. Now THERE'S a business model!!! ; )

  • by Arandir ( 19206 ) on Thursday September 06, 2001 @07:45PM (#2261271) Homepage Journal
    Remember the old adage "give away the razor and sell the blades?" It works great for hardware, and it seems to make sense for software.

    But common practice in the Open Source world is different. Here, they give away the razor, flame anyone who sells blades, and wonder why no one's paying them for the privilege of being a barber.

    Okay, rant off...
  • by jfunk ( 33224 )
    Not a happy day for fans of open source business models.

    Ok, lessee here, an OS database company that few people have heard of and a company that many of us have heard of but have been taking a very self-destructive path over the past couple of years (if you don't know what I'm talking about, do a search for Caldera in the /. archives).

    How, exactly, does this spell bad times for open source business models?

    I'd submit the fact that most of the companies that have been fucked over the past year or so were not actually open source companies.

    This has everything to do with bad management and worse decisions. Even before the downturn, only 1 in 10 new companies survived their first year.
  • The linux "business" is not really a great one in my opinion. I love linux, but I just don't think it will ever be a really amazing "for pay" product by itself. Now selling IBM-PC clones with Linux on them, or just giving the customer an option between Windows and Linux is a really good idea I think.. you can make money that way off the hardware for sure. I know someone is going to bring up the subject "PC clones! How about a wristwatch!". Sure.. wristwatches too.. toasters, televisions... whatever works. :)
  • Caldera, you might remember, was funded by the great Ray Noorda, founder of Novell. The plan was to use Linux and, later on, what was left of DR-DOS, to crush Noorda's great white whale, Microsoft. They got a legal settlement on DOS, but it didn't do them any good.
  • The whole "make money off services" line seems more and more like a lame excuse as time goes by. I'm just about convinced that it is simply the best response someone could come up with when challenged to show how anyone can make money off something they give away.

    Imagine something like this....

    Gnubert: "Free software is the way to go!"

    $uit: "Free? What do you mean by that?"

    Gnubert: "I mean free, we give it away and anyone can use it for whatever they want while improving it themselves"

    $uit: Mumbles to himself something about Haight Ashbury and LSD. "Uhm.. Well how do you expect anyone to make money doing this? After all, we are running a business here. We'd all like to get paid and ultimately turn a profit, so just how do you suggest we do this?"

    Gnubert:"Uhmm.......well....hmmm...um.. I know! We can provide services to our customers that we charge for! We give away the software and then provide support contracts and other services that we can use to make money!"

    $uit: "Well if the software is supposed to be so good, why does anyone need support from us? Also, whats to stop other companies from competing with us? Not to mention the fact that providing services costs money, do you really expect us to be able to make enough money from services to offset the loss created by developing the software itself?"

    Gnubert: "That's just it, we don't have to pay to develop it. Hackers will work for free because they believe in the Truth of Free Software, amen. Now.. if you'll just invest some money in our new company, FreeRiderProblem.com, we can get busy making new software to give away. We'll make the evil rat bastards at MickeySoft wish they'd stuck to selling basic interpreters! They shall pay!!!!!!!!!"

    $uit: "I don't care about that, I just want to make some money here, got it?"

    Gnubert: "But you don't understand, MickeySoft is out to steal your soul! At this very instant the company has people working to figure out how to enslave you! They want to own and control everything. Their leader eats the brains of children and bathes in their urine! WE must stop......own us all....monopoly......kill....."

    $uit: Quietly slips away as quickly as he can....

    ........Sound familiar?

    Ideologies only work in the minds of those who follow them. In the real world facts and natural laws dictate what goes on. We can seek to discover those laws and use them to our advantage, or we can try to force our ideologies into the picture like someone trying to force the wrong piece into a jigsaw puzzle.

    Which are you going to do?

    Lee Reynolds

    (Go ahead, mod me down because you don't agree with me.)

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