Intel, Apax invest in Linux distributor SuSE

In another vote of confidence for Linux, SuSE said it has received $US12.3 million in investments from Intel and investment firm Apax Partners.

The size of the two investors' respective stakes in SuSE following the investment was not disclosed, but Peter Blumenwitz, technology expert with Apax Partners, said the two companies now have seats on SuSE's supervisory board. SuSE is a Germany-based Linux vendor that sells commercial services and distributes its own version of the open-source operating system.

SuSE has grown rapidly over the past year, doubling its staff from 100 to 200 people. The company will use the cash injection to put more muscle behind its existing offices in Germany, the UK and the US, and to set up new sales and support offices worldwide.

SuSE's expansion plan includes setting up new offices in France, Italy, Spain and in Asia, said SuSE chairman Roland Dyroff. SuSe is particularly looking to enter the Japanese market, he added.

The company will also use the funds for its efforts toward an initial public offering, a time frame for which it has not yet revealed.

Apax' Blumenwitz saw Linux' potential growth in the corporate market as a compelling reason behind the SuSE investment. "Linux is being increasingly taken seriously in the corporate environment," he said. Growth opportunities for SuSE will come not from selling its version of Linux, however, but from professional services, Blumenwitz added.

SuSE will be increasingly concentrating on helping companies set up more complex systems based on Linux, echoed Dyroff. The company has set up such consulting operations in Germany and the US, and will be looking to set them up elsewhere, he said.

SuSE also will be coming out shortly with infrastructure tools for Linux, Dyroff said, but declined to elaborate on the products. What SuSE won't do, he said, is build Linux-based applications. "That we will leave up to our partners," he said.

SuSE expects to achieve revenue of about $US22.5 million for the fiscal year ending December 31, 1999, Dyroff added.

In yesterday's statement, Intel said it invested in SuSE to help encourage the spread of Linux on Intel-based computers in Europe. The chip giant last year also invested an undisclosed amount in US-based Linux distributor Red Hat Software.

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