Linuxcare Shies from Renewing IPO Plan

LONDON (05/03/2000) - After calling off its initial public offering (IPO) and replacing its chief executive officer on the same day last month, Linux services provider Linuxcare Inc. is still not in any rush to jump back in line to go public.

"We really had the company in high gear heading for the IPO, but as we approached it, we decided to make some changes in the company," Arthur Tyde, the company's cofounder and executive vice president, said here today in a telephone interview.

"At that point, the market was doing pretty good, but we decided to do some internal restructuring, so we pulled out, then the market tanked," Tyde said about the company's announcement on April 7.

Right now the company is focusing on restructuring, not filing for an IPO, Tyde said. "We've tossed some times around, but that's not what we're focused on right now."

First off, the company plans to replace its interim CEO Pat Lambs. "Most of the company reported to Pat anyway," Tyde said. In addition, the company also created an "office of the CEO," which consists of Lambs and Tyde, as well as Ted Schlein, chairman of the board, and Paul Vias, a director at Linuxcare.

"The office will probably go away when we find a new CEO," Tyde said. The office was formed with representation to focus on each of the company's four core interests -- support, professional services, training materials and certification. It is also possible that the new CEO will come from outside the company, he said.

Linux pickup in Europe is now only between eight and 12 months behind the U.S. adoption level, Tyde said. "Last year we had the first big Linux show in the U.S.; this year there are big ones in the U.K. and Paris," he said. "People are asking the same questions here that they were asking eight months ago in the U.S."

Linuxcare is not a typical Linux company, in that it doesn't actually sell a version of Linux -- it provides Linux-based services. "Since we're not tied to a single distribution, a lot of companies see us as a neutral third party in the Linux market," he added.

As for the distribution companies, "their core business is taking things off the Net, shrink-wrapping them and selling it to the public," according to Tyde.

As far as current fears that one company may attempt to "take over" the open-source operating system, Tyde has no fear when it comes to companies like German distributor SuSE GmbH or Canadian distributor Corel Inc. "Red Hat (Inc.), on the other hand -- I'm a little concerned that they're trying to own the brand," he said.

North Carolina-based Red Hat has the largest market share of the operating system in the U.S. and was the first Linux company to launch an IPO.

Linux users recently have increasingly voiced fears that programmers could end up writing for a specific company's version of Linux instead of for the open source community.

"When we do a patch for a driver or a system, we prefer to work with the open source developers instead of with a specific distribution," Tyde said.

Linuxcare, located in San Francisco, can be reached at +1-415-354-4878, or on the Web at http://www.linuxcare.com/.

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