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The Almighty Buck

Cobalt Networks files for IPO 41

A reader wrote in with the news that Cobalt Networks has officially filed their S-1 to the SEC on 9/8/99. The full story is online, although quite brief. Be interesting to see how this one goes.
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Cobalt Networks files for IPO

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  • /usr/src/linux/COPYING

    or, if you for some reason are not running Linux:

    here [gnu.org]

    1. Refers to the orignal program's source code

    You may charge a fee for the physical act of tranferring a copy...

    2. Refers to a modified program

    b) You must cause any work that you distribute or publish, that in whole or in part contains or is derived from the Program or any part thereof, to be licensed as a whole at no charge to all third parties under the terms of this License. (emhasis added)

    3. regarding binary distibutions...you must

    a) Accompany it with the ... source code
    b) Accompany it with a written offer .. three year ... source code

    All of the above require that what is released be released under the GPL.

    So, they only have to distribute to their customers, BUT they CAN'T prevent their customers from redisributing.

  • Yes, some variety in the portfolio.

    Red and Blue.

    No, not Big Blue, Cobalt Blue.

    Maybe Red Hat should work on a MIPS version,
    we could call the result "Red Hot Blues" !!
  • i've used cobalt at a couple of locations, and i have to say that i like them. They're stable, they're quick to set up, and they look very cool (not that this one is too important, but ...) I wish Cobalt good luck.

    I also have three of them that we don't need any more (a project that has been redirected mid stream), so if anyone wants to buy one, let me know.

  • They went with MIPS because it doesn't need either a fan or a big heatsink.

    I find the MIPS thing a bit of a problem - there's alot of Linux stuff that won't compile nicely for MIPS, and of course none of the RPMS work too well!

    Their distro is loosely RedHat based, but they don't track RedHat - they simply used it (4.x??) as the starting point.
  • Wouldn't it be a blatant violation of the GPL if Cobalt had ported linux to MIPS and not returned the changes it made to the community?

    No. The GPL imposes an obligation to provide source to those whom you have supplied with binaries, not to the copyright holder of the code, Linus Torvalds or Joe Random Hacker.

  • by Anonymous Coward
    However, they would need to provide source to people they sell their product to. They do. BTW- one of the founders of cobalt is David Miller who did the MIPS port LONG before cobalt exsited.
  • by Anonymous Coward
    Cobalt Networks S-1 filing [freedgar.com]

    It will be on www.sec.gov in a day or two.

  • Not really. The processing power on nearly every cobalt machine is minimal.
  • i have a qube2 and i have to say, i really like the principle....

    however, i am attempting to use it as a file server for an all-macintosh network (which they claim cross-compatibility allows) and their version of atalk is faulty. it changes creation dates of files and directories (each time you touch or open a file, the directory date changes... from year 1939 to 1969 to 2015 to 2131 for example). which makes it a pretty useless file server.

    furthermore, running a backup of the files touches the files, so every day it appears as if all files have been modified, and they are all backed up again not just the files that really have been modified. this can be pretty annoying on a 13.2 GB hd.

    as a stand alone product, i'm farily content. however, for me it is pretty useless. i have heard from their seriously lacking tech support that they know about it, but aren't seriously persuing a fix.

    oh well. so much for cross-platform compatibility.

  • I got the opportunity to set one of these up this summer. They are really cool. We used one of the Qube II's. The web interface for setting it up is easy enough for your MS network admins. If there is something that you can't do through the web interface, you can always telnet to the box. Out of the box it runs very quick. Just don't turn it off. It takes about 30 minutes to fsck the disk. Figured I might as well test that while we had it.

    They come in a few different configurations. There is the Qube and the Raq. The Qube by default has two ethernet interfaces and an open PCI slot. The Raq has one ethernet interface, but I think it had SCSI. Not sure if they support RAID or not.

    As for their sales guy, he was very knowledgable. He answered every question we had, and with a bunch of security buffs and other Linux users sitting in on the presentation, he got his share of toughys.

    The only thing that I didn't like, was all the admin stuff is done in the clear. There is no standard SSL package for the admin side. It doesn't come with SSH, but I think they provide a compiled RPM of it on one of their distribution servers outside the US.

    It's statble and most of the software that a small business is going to use is already preinstalled on it. It does run the 2.0.34 kernel, Apache 1.2, and Samba 1.9.x. I think they're working on new machines, but I don't know much about that.

    All in all, it's a good box. Easy to set up and manage. It looks cool too. I love that color of blue. Try and find the picture on their website of 40 of their Raq mount units in a Raq. It's slick...
  • Note that David S. Miller, who did lots of TCP and MIPS porting work, was employed by Cobalt for a while, so they've already made some contributions. Most of the non-x86 ports require patches to Linus' kernel tree, so the MIPS port isn't unusual in that respect.
  • I could have sworn it says if you don't supply source with your product, you need to make it freely available to those who want it? You can't restrict access to it, and you can't charge extra (beyond maybe the cost of pressing a CD and shipping it)

    Someone should turn the screws on those companies, if that's the case
  • last i checked, cobalt's business plan rests on proprietary UI. this is not a long-term viable business plan since glade et al now make customized UI idiot's work. corporate customers always demand blame-dereference services, but i think cobalt's expertise in that area is poor. i do not believe they value quality, which is the only thing to survive the onslaught of free software.

    from a more traditional market perspective: cobalt was one of the first linux-as-appliance manufacturers, so they are in the position of having to make the mistakes whereas others may learn from cobalt's w/o expending resources (if smart enough). if cobalt is also smart enough, they will develop rewarding developer relationships instead of paying neophytes for square wheels. poor investment in experienced development means that the early good seeds that wandered through cobalt can only hope management sees the light. cobalt's strengths lie in its multiple distribution channels and community goodwill. these can be counted to remain loyal for the short term, but long term return to horizontal markets and (once again) free software change the value of that approach. as for product, it could be that cobalt will forego mips going forward, in the process shifting focus from efficiency (dollars/cycle) to price, in an effort to maximize margins.

    other players will likely follow suit, and market the same message: our UI ontology maps to yours. since the market is still not sophisticated enough where every business has an in-house hacker, there is room for profits. cobalt has seeded the industry, but the window before market sophistication is small, and cobalt needs to strengthen its service before more traditional service providers loosely partner w/ netapp or whatnot and cobalt dies the usloth death.

  • The interesting question for /.ers is should Cobalt be viewed as a company that supports the OpenSource philosophy? Despite porting Linux to use MIPS, as far as I'm aware, they have not contributed their port back into mainstream (correct me if I'm mistaken).
    Poke around ftp.cobaltnet.com sometime, in particular ftp://ftp.cobaltnet.com/pub/prod ucts/2800wg/SRPMS/ [cobaltnet.com].
  • by Suydam ( 881 )
    This is a good thing right? Aren't all their servers Linux based? Too bad this wasn't mentioned in the article...

  • Corporations support the Open Source movement simply by exploiting it. Financial support would be nice too, but one of the strengths of the Open Source community is that it can pursue 'market share' without having to worry about profits.
  • by Anonymous Coward
    Do you think Cobalt will offer IPO shares to Linux community members like RedHat did?
  • I'm glad redhat did thier IPO the way they did because now I can buy stocks in companies like cobalt and beos that I want to support by more than just buying products.
  • Well it seems as if there is going to be another opportunity for people to make a large sum of money in a day or so, that is if you have a few hundred thousand dollars that you like to play around with in the market. I do hope that this doesn't turn into another RedHat fiasco. Its like knowing exactly which horse is going to win a race down at the track, and that the horse that is going to win happens to be going off at 99 to 1 odds. Seems great. So you roll up to the betting window and the teller informs you that since you haven't already bet $100,000 with them in the past, he will not be able to take you bet.
    Whatever you people do, don't get wrapped up in this whole IPO thing. It will bite you in the ass in the long run.

  • They run "Linux 2.0" but I couldn't find the exact distribution.

    Basically they sell Linux boxes with Apache and Perl on them. Nothing that a typical /. user couldn't make, but the convenience factor is nice, and presumably they're simple enough to administer that even an MCSE could do it. .

    You can start at Cobaltnet [cobaltnet.com] for their home page, or, being provincial, go to their North American mirror [cobaltnet.com].

    They were also mentioned in WiReD 7.05 [wired.com].

    From there, you can read scads of reviews from Linuxworld and ZDNet, product specs, etc.

    They seem to have a good product for someone (ISPs?) needing to add cheap, reliable, high performing web servers without needing too much inhouse expertise. And the cube is a funky cobalt blue box.

    Why is this good for Linux? I suppose when you can go to a professional looking web site with your PHB and get some nifty servers preloaded with Linux shipped to you for far less than NT, you might start seeing more Linux boxes show up. It makes them more of a web page toaster than a complex, arcane, unsupported hack.

  • I was very fortunate to meet the cofounder and VP of Cobalt at last springs ISPCon in Baltimore. I must say I was very impressed with the CacheRAQ2 (consequently, we bought a couple for trying out in one of our POPs). I was not only impressed with the equipment, but actually to have the "suits" that were there to sell the products seemed to treat my other netadmin and I (who were dressed... shall we say in attire more becoming sys admins.. i.e. shorts, hawaiian shirts, etc...) with respect and actually KNEW the technical issues that we were addressing, and truly seemed to care about our concerns (r.e. uptime, remote administration, security, ssh, caching stats, caching of java applets, etc). Not that this has anything to do with their IPO announcement, but I feel that this will be another company that I would like to support.
    I am also concerned as was mentioned in previous posts if they are going to release their (per)version of RH in the manner becoming of the Open Source community, or if they plan on keeping it under lock and key and proprietarily (sp?)
    IMHO in just the few minutes that I talked to the people from Cobalt, I feel that they are probably waiting for their source to be bulletproofed before releasing it to the masses. If this is the case, then I applaud them and will back them wholeheartedly. BUT if they decided to keep it under lock and key to try to keep their product to themselves, I will probably NOT opt to buy their stock, but I WILL keep investing in their products.
    These boxes are FAST, reliable, and with a very small footprint... I'd like to turn one over to a (play) server just to see what it would take to crash it:)
  • 1 - Wouldn't it be a blatant violation of the GPL if Cobalt had ported linux to MIPS and not returned the changes it made to the community? Perhaps they were returned to Linus, who chose not to include their tweaks?

    2 - Well, I'm not a Linux developer, so I can't say first hand, but I think the idea of insisting on a gift for contributions to opensource software or products is a BAD THING. Where do you draw the line? Only people who have contributed to the kernel? Apache developers? Documenters? Testers? Those people that download and use every developmental release are just as important as the ones that create it, so long as they contribute by reporting bugs at the very least, and fixing them if they have the time and knowledge.

    I've been using Redhat since 4.2... On occassion, I report issues I bump into. Though I don't know how much bearing they have, I don't expect anything in return. That's what the whole free software philosophy is supposed to be. Not doing stuff for free in exchange for shares of companies that use your stuff.

    3 - Sorry for going so off-topic there! :)
  • I think Cobalt has a great thing going. The integration they've put into their product really helps in the performance area.

    I also like how they aren't using an Intel architecture, which helps promote Linux's cross-platform abilities.

    Best of luck Cobalt! (I love that color too ;)

  • by LL ( 20038 ) on Thursday September 09, 1999 @12:44AM (#1693836)
    Well basically Cobalt [cobaltnet.com] sells standalone server appliances and rackmount systems, a niche area eminently suited for Linux due to hands-off maintenance and need for long-term stability. Rather intrigingly, they use MIPS-based chips [mips.com] (is similar to SGI) which, despite corporate x86 fixation, is a very cost-effective and efficient processor. If one ignores benchmark pissing contests, MIPS chips actually produce very good real-world application performance per dollar. Some generic reviews can be found by searching zdnet for their products. While I have no clue as to their success in the wider market, I note that several ISPs offer bulk CPU/storage/network based on amortised capital cost + (storage+bandwidth) operational charges. This may be a good choice for companies looking for a place to park their corporate data without worrying about the fine details.

    The interesting question for /.ers is should Cobalt be viewed as a company that supports the OpenSource philosophy? Despite porting Linux to use MIPS, as far as I'm aware, they have not contributed their port back into mainstream (correct me if I'm mistaken). Despite distribution hiccips and angst, RedHat have recognised the value of the Linux community by releasing a portion of its IPO shares to the hacker community but then their success is directly tied to the availability of high quality source. Cobalt is not exactly the same situation being more a vertical integrator rather than Linux distributor/support.

    I suspose the point of all this musing is to think and explore the relationship between traditional businesses and the OpenSource "gift economy" as detailed by ESR [tuxedo.org]. Would insisting on a gift (of shares) be considered boorish? A "gift" which is automatically expected suddenly shifts from a voluntary exchange of appreciation to a compulsary tithe on the future goodwill (ie thou must give away x servers or else!) which could shatter the easy-going nature of the OpenSource community. While individuals can be expected to keep social balances in their heads (e.g. cousin x gave y last Xmas so I'll give z in return where y~=z), corporations are run on tough balance sheets principles under recognised accounting rules with the sole objective aim of increasing "value" to "shareholders". This creates an unresolved issue in dicussing how corporations can both support and benefit from OpenSource without being seen as overly exploitive (which could potentially lead to loss of goodwill). What do people think?

  • Have you had problems with anything in particular? I've had no problem compiling any of the things I've needed on our Qube2 (e.g. PHP, MySQL, ntop, sysmon, scanlogd, newer apaches, IMAP c-client, etc).
  • I have setup a few of of the cubes and RaQ2s. Nice little units. Good for the commandline challenged masses for doing web their own web site administration.

    Of course, everthing can be done via the command line if you want. Too bad they can't ship with ssh installed.
  • by Anonymous Coward
    if anyone has had the pleasure to use their products, will know how a real out-of-the-box linux solution needs to be provided to end customers. I'm waiting on one now, because the suits agree (NT goes down too often) and its a POP (Pay One Price) "thin server" (which means it comes preloaded to perform x number of functions - thats its not 'intended' to do everything - which will change if they IPO.. cobalt will run head-to-head with Linux VA, Penguin Computing, and any other poor souls unfortunate enough to sell non value added linux boxes!) that works straight out of the box. consultants arm yourselves with the cubes and march out to small-midsized companies wanting internet access/mail/intraoffice connectivity on the cheap and realiable. dont say anything about linux - it still spooks mom n' pops - just say "Cobalt Networks!" Everyone has given them GREAT reveiews, and I've installed the Cube @ my dads company (works like a charm, although he is/was hesitant) and I'm getting a RAQ2 today- which will be used for production email servers (anyone figured out a configuration for these lil' boxes to be served off [NFS?] data?)

    rah rah rah

    ~runyaga (forgot my pwd && @ work)
  • : The underwriters for the IPO include Goldman,
    : Sachs & Co., Merrill Lynch & Co., and
    : BancBoston Robertson Stephens.

    Interesting underwriters, could be a good IPO....

  • I think they also compete with Penguin Computing indirectly by selling rack-mount Linux systems.

    I dig those nifty blue cases :)

  • Pardon me for giving it a miss, but this just doesn't excite me the way that Red Hat or Bamboo did. Now, VA Linux Systems or Penguin Computing might get me interested.

    It'll probably go up though. But who knows.

    Me I just put a $140 limit on my Red Hat (IPO at $14), since people are going nuts.

  • Hmm. I'm changing my mind. Maybe this is a good IPO. Depends on the prospectus and pricing.

  • I'd love it if they had a model that included a built in DAT drive, or if they would put an external SCSI connector on the Qube like they do with the Raq.

    I like the Raq for ISP's, but I won't install the Qube for small workgroups networks (their supposed target market) because of the lack of a sensible backup option. I do *not* think backing up to a workstation is acceptible.

    Oh well, the Qube 2 has lots of improvements over the original Qube... hopefully an integrated tape drive, or some method of attaching a external tape drive will be available on the next generation Qube....
  • by Analog ( 564 ) on Thursday September 09, 1999 @05:42AM (#1693849)
    So the news story says Cobalt has net losses of 8.2 million on revenues of 7.7 million. A couple of questions:
    • What are they spending all the money on? If it's R&D, maybe I can have an "investing in the future" warm fuzzy, but if it's manufacturing or something else I have to wonder how they're going to get costs under control.
    • Of the many companies that have IPO'd with such numbers, how many have actually come back and made the investment worthwhile? And how many of those have been software companies, where the fixed costs are relatively low?
    • Kind of a follow-on to #2, many software companies have proven to be good for short term stock gains despite the lack of long term profits; have any hardware manufacturers?
    • And lastly, the obvious question that must be asked - how do these guys stack up against VA and Penguin, and are they really even competitors (it seems to me they aim at a somewhat different market)?

The IQ of the group is the lowest IQ of a member of the group divided by the number of people in the group.