SRA eyes additional shareholders for Turbolinux

Software Research Associates Inc., the Tokyo-company that in August purchased the Linux operating system business of Turbolinux Inc., is hoping to attract additional shareholders into the newly acquired company as a way of giving more companies a stake in the OS and promoting its growth, one of the architects of the acquisition deal said on Friday.

"Right now, we own 100 percent of the company," said Masatoshi Matsuo, a manager at the company's corporate planning division in Tokyo. "But we plan to sell some of the stake. It will be good to have more companies working together on a Linux distribution."

Beyond working with other companies on the Turbolinux distribution, SRA also committed itself to UnitedLinux, a standards based version of Linux targeted at business use. Turbolinux had announced support for the initiative before its acquisition by SRA.

"Linux is becoming key, even in the enterprise," said Matsuo. "Within one to two years, many companies will be using Linux for business systems and UnitedLinux will stimulate this market."

SRA was attracted to Turbolinux as a way to expand its business in the open-source area, said Matsuo. That business started three years ago when SRA, who have made a name for themselves creating programs for big name clients running mainframe or Unix systems, began offering an open-source graphics multimedia library program called Jun.

Recently, the company began considering its own Linux distribution but with RedHat Inc. and TurboLinux already enjoying strong market share of the domestic market and several other distributions also available, the company decided creating its own flavor of Linux was not a sensible idea. When Turbolinux approached SRA with the idea of being acquired, the company jumped at the chance. SRA sees the acquisition of Turbolinux as not only stimulating its open source business, which now includes Linux support, but also as a way to build up expertise and make a name for itself as a strong Linux player as more and more companies make the switch to the free operating system.

The popularity of TurboLinux in China and its already strong support for the Chinese language will also bring benefits, says Matsuo. Japanese companies of all types are beating a path to China as they look to lower costs and to expand their geographical reach. Having Turbolinux will mean that SRA has a strong base from which to offer services to these companies.

The acquisition is expected to have an immediate effect on SRA's revenues, said Matsuo. For the current fiscal year, which ends on March 30, 2003, SRA expects revenues from its Linux-related business to be ¥2.5 billion (US$20.8 million), which represents an increase of 56 percent on the ¥1.6 billion it reported for the previous year, said Matsuo.

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