TurboLinux to Announce Layoffs, New CEO

BOSTON (06/02/2000) - TurboLinux Inc. this week joined other Linux vendors toughing out turbulent market times, announcing layoffs and a new CEO.

The layoffs were reportedly an effort to cut costs and help the company increase profits. The layoffs did not have a bearing on the company's decision to install Paul Thomas, who has served as chief operating officer, in the CEO seat.

The company has moved former CEO Cliff Miller into the role of chairman, a move that reportedly has been discussed for some weeks.

TurboLinux, known for its Linux clustering software, first made its mark in the Asian market, which was ripe for a low-cost open source operating system, according to observers. But mixed marketing in the U.S. - pushing into the consumer market while simultaneously focusing its technology development on the higher-end Linux server clustering - may have resulted in customer confusion.

John Dunkle, an analyst with Workgroup Strategic Services in Portsmouth, New Hampshire, says the company needs to clear up its strategic direction. "There is inconsistency, which is not a good sign," he says.

Still going strong

But despite the rough seas Linux companies have been weathering lately, including a recently pulled initial public offering and layoffs at LinuxCare, the operating system continues to garner market share - particularly in the Internet space.

Larry Augustin, president and CEO of VA Linux Systems, told attendees at the European Linux Conference in London last week that 60 percent of Web servers on the Internet are running Apache, the open source Web server software.

"In 1998, Linux had 16 percent of the server operating system market. And in 1999, it already had 25 percent," he said, citing figures by International Data Corp. (IDC), a market research firm in Framingham, Massachusetts.

But he also acknowledged that the main barriers keeping Linux from crossing over to mainstream acceptance by companies are not easy to overcome.

The "open" model of Linux - which is widely considered to be its strength - can also hinder its acceptance in some cases, Augustin added. "People don't like the fact that the code is constantly being developed," he said. "They don't like the fact that there are three kernel releases [per] week on the Internet," he added, referring to the heart of Linux source code, which is constantly under construction.

The IDG News Service contributed to this story.

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