Lesser-known Linux companies join forces
In an attempt to attain the status of better-known rivals, Linux seller Caldera Systems has invested $3 million in Ebiz Enterprises, which operates LinuxMall.com and The Linux Store.
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The investment will be used to create PartnerAxis, a Linux-focused Web site where specialized software companies can tap into a network of "resellers" who install the software and sell the products to customers, Jeffrey Rassas, chief executive of Ebiz Enterprises, said today.
PartnerAxis began at Caldera under the project name Electronic Linux Marketplace, said Dean Taylor, leader of the project and one of 11 Caldera employees who will transfer to Ebiz. Taylor has been the executive vice president of marketing for Caldera.
The $3 million should be enough for Ebiz to bring the PartnerAxis division to profitability, Rassas said. He expects this to happen in 12 months.
As part of the deal, Caldera chief executive Ransom Love will join the Ebiz board of directors.
Although Caldera is one of the Linux companies that went public before Wall Street grew testier this spring, analysts say it doesn't have the revenue or brand recognition of Linux companies such as Red Hat or VA Linux Systems. Through its recent acquisition of Santa Cruz Operation's Unix operating system products, Caldera also hopes to raise its profile.
Ebiz Enterprises decided to join forces with LinuxMall in May. The terms of the LinuxMall deal are still shifting, however.
"It's no longer a merger," he said. "Ebiz will have a majority interest."
Ebiz and LinuxMall also have changed their plan to establish headquarters at LinuxMall's Colorado location and will instead keep the top executives at Ebiz in Scottsdale, Ariz., Rassas added.
In the most recent quarter ended June 30, Ebiz and LinuxMall had combined revenues of about $4 million. Together, Rassas said, they bring in about $1.5 million a month, have 90 employees, and have won corporate customers such as Qualcomm, Sycamore Networks, Honeywell and VerticalOne.