Caldera gets $30 million infusion from Sun, others
In the latest example of the uninhibited flow of money toward all things Linux, the software company receives a strategic investment from a group of major computing companies.
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Other investors in the Linux seller include Unix seller Santa Cruz Operation (SCO), network software seller Novell, thin client software seller Citrix, and venture firms Chicago Venture Partners and Egan-Managed Capital, Caldera Systems announced today.
The cash infusion will help Orem, Utah-based Caldera keep its head above water in the frothing Linux market. Several Linux-related companies have received tens of millions of dollars from their initial public offerings in recent months, and Caldera is considering an IPO of its own.
"Caldera really needs this. It's essential...because of the sales channels Red Hat's been able to establish," said Giga Information Group analyst Stacey Quandt.
Though Linux companies cooperatively develop much of the Linux software, competition for customers is getting fiercer, Quandt said. "I think they're all trying to establish more market share by extending themselves by any way they know," she said.
It's the biggest sign of Linux support thus far shown by Sun, whose computers run a close cousin, a Unix variant called Solaris. Sun also has invested in Linuxcare after Linuxcare signed a deal to support the Linux version of the Star Office software suite Sun acquired.
Sun has taken a lukewarm attitude toward Linux, arguing that it was a good operating system to wean people away from Microsoft Windows, but that heavy-duty computers would be better off relying on Solaris.
Linux is an operating system that was originally developed by an army of hobbyists but is increasingly being advanced by companies. It works like Unix and competes with Windows NT, and many see it as useful for building many of the parts of the Internet. Though Linux can be obtained for free or very low cost, several Linux-related firms have won tens of millions of dollars through initial public offerings.
As a result of the investments, Caldera Systems will add four new members to its board of directors. Two of them are Ed Iacobucci, chairman and chief technology officer of Citrix, and John Egan, formerly of data storage firm EMC and now a general partner of Egan-Managed Capital.
Novell and Caldera Systems have had close ties for years; former Novell chief executive Ray Noorda helped to get Caldera Systems on its feet.
Conspicuously absent from the list of investors is Intel, the Santa Clara, Calif.-based chipmaker that has invested in the three other biggest commercial sellers of Linux--SuSE, TurboLinux and Red Hat. Intel, the first computing company to invest in a Linux firm, has been among the most aggressive backers of Linux, which is most popular on Intel-based computers.
Like Sun, SCO has been warming gradually to Linux. SCO's livelihood depends on sales of Unix, but in recent months the company has begun offering Linux services and launched a campaign to invest more heavily in Linux as well. For example, SCO also has invested in LinuxMall.
Novell sells the NetWare operating system, but increasingly has been emphasizing a future where its revenues come from other network software.
Caldera Systems has been aiming its OpenLinux product at two markets: the novice user of Linux and the "value-added reseller," a company that assembles Linux with other products to make a more comprehensive offering.
Caldera competes with Red Hat, SuSE, TurboLinux, Mandrake and other versions of Linux, though much of the development that underlies their products is cooperative.
Lineo, Caldera Systems' closely tied sister company, is also creating a version of Linux called Embedix for small devices such as set-top boxes in which the nitty-gritty details of the operating system are hidden from the user.
Red Hat isn't standing still. On top of heavy funding of Linux development and marketing, the company unveiled a plan with i-Entertainment Network under which Red Hat will chronicle Linux gaming developments and i-Entertainment will make Linux games based on Red Hat software.
Caldera Systems was spawned from Caldera Corporation, but is independent and not involved in its progenitor's suit against Microsoft.