Eazel Inc. folded yesterday, two months after the launch of its first product, a user-friendly, open-source desktop software for Linux systems.
In an announcement on its Web site, Eazel explained the closure, which was effective yesterday.
"Our most diligent efforts were not sufficient to secure additional funding. We're disappointed that we can't continue developing software and services for users of open-source software. We are confident, however, that Nautilus development will continue forward," the announcement said.
Nautilus is the open-source software Eazel provided for free download from its Web site.
Touted by analysts as an improved, easier-to-use screen environment, Nautilus was built to run on the Gnome 2.0 desktop interface. The company had signed an agreement to build a version for Sun Microsystems Inc.'s Solaris operating system (see story). In December, Dell Computer Corp. agreed to invest in the company and said it would preload the software on its laptop and desktop PCs that are sold with the open-source operating system (see story).
"It was looking like it was going to be one of the better options," said Al Gillen, an analyst at International Data Corp. "It's a pity because the work that Eazel was doing was really compelling."
Despite the promise of the software, Gillen said he wasn't necessarily surprised at Eazel's news. "There was a lack of demand, because that was really focused on the user experience," he said.
Founded in 1999 by a group of industry veterans who were part of the original Apple Macintosh team, Eazel began developing Nautilus to make the Linux desktop easier to use. The Nautilus shell integrates file management, Web browsing and system management.
Linux is most popular in the server environment, not as an end-user application, Gillen noted. Those who use Linux-based desktops, such as KDE and Gnome, are usually highly technical users and willing to regularly improve the software by downloading patches and building on the open-source code.
Also a problem for Eazel is that it's a free, open-source product and doesn't have an obvious means of making money.
Prospective investors probably were wondering how the company would make a profit with no source of revenue, Gillen said. "A lot of people are wondering that," he said.
In March, Eazel celebrated its first release of the Nautilus1.0 file manager for the Gnome desktop environment. A day later, the company laid off 40 of its 70 employees because it had been unable to secure a second round of financing.