Applix Forms New Linux, ASP Company

BOSTON (04/24/2000) - Applix Inc. today announced the separation of its Linux group into VistaSource Inc., a wholly-owned subsidiary supported by a US$6 million investment from its parent company. The new company will focus purely on software.

"Applix has too many businesses under one roof," Bernie Thompson, president of VistaSource, said in a conference call today regarding the separation, which will have 65 employees.

VistaSource will provide Linux and ASP (application service provider) software technology, enabling customers to run applications off of the Internet in addition to their intranets. The company also owns and operates several collaborative Linux Web sites.

"The Internet is driving the need for application access everywhere.

Open-source access is critical so the customer is not locked in by the vendor," Thompson said. The new company is inspired by the open-source movement, which supports software customization.

Thompson cited the growing popularity of Linux as another reason for creating VistaSource, pointing out that Linux has captured 25 percent of the overall market share for servers and 3.9 percent of the overall client share internationally -- while the Apple Computer Inc. Macintosh operating system has a 5 percent overall client share. Revenue from the Applix Linux division was $18 million in 1999, with $1.5 million from Linux platforms alone, Thompson said.

"Our goal is to be a product worth paying for," Thompson said, citing the 200,000 licensed Linux users worldwide.

Thompson also announced the release of Applixware Office for Linux 5.0, which features word processing, a vector and bitmap drawing tool, presentation software, spreadsheets, e-mail and a graphical relation database. He likened the new product to a "Swiss army knife," as Office for Linux has a "rich base of functionality."

He added that the software is used by the U.S. military and government, which cannot call for support because of the high confidentiality of their projects, and the Nasdaq stock market has used the office software as a base to track potential insider trading.

Thompson said that the software is ideal for use on thin clients, referring specifically to IBM Corp.'s Network Station, which he said "could be based purely on Linux in the future. (IBM) needs great applications; we are the preferred solution for their platform."

VistaSource is "bringing a wealth of technology to the market," with a strategy based on the open source approach that empowers customers, he said.

Primary competition for the new company includes other office products produced by Sun Microsystems Inc., Corel Corp. and Microsoft Corp., Thompson said. "The fundamental differentiated advantage is that most of (our applications) are native, not ported, not running through an emulator like Corel's product."

There are no immediate plans for an IPO (initial public offering) in VistaSource's future, Thompson said.

VistaSource, headquartered in Westboro, Massachusetts, can be reached on the Web at http://www.vistasource.com/. Applix, in Westboro, Massachusetts, can be contacted at +1-508-870-0300, and on the Web at http://www.applix.com/.

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