linux business

[Tim Owen (LESSI)]

My two cents...

As a new Linux/open source business startup, I certainly feel that the
business opportunity and mid to long term future is very bright but has
relatively high risks.  However, I also feel that the stock market
overreacts bigtime on both the positive and negative sides in the short-term
(12 months or less).  Linux, and open source more generally, in my mind is a
long term play and will fundamentally change the software purchase and use
business model.  Hosting and services (use value model) will become the
value proposition not license sales (sales value model).

I highly encourage all to read The Cathedral and The Bazaar by Eric Raymond
for more in depth analysis of this trend.  Especially the essay "The Magic
Cauldron".

As for whether you should buy Linux based companies now or wait... do your
homework on the fundamentals and trends.  A discounted cash flow analysis is
necessary to determine whether the current price is reasonable.  But such an
analysis is based on assumptions and projections that will have sizable
margins of error for this young of an industry.  The real question is
whether Microsoft or other proprietary companies can "coopt and extend" or
"divide and conquer" open source solutions, whether the open source movement
turns into a "fork fest" or "less than benevolent dictatorship" that fizzles
before it matures,  and whether Linux/open source companies can figure out
how to make money.

Tim

-----Original Message-----
From: Marcel Kunath <kunathma@pilot.msu.edu>
To: linux-user@egr.msu.edu <linux-user@egr.msu.edu>
Date: Wednesday, March 22, 2000 12:20 PM
Subject: linux business


>question to the Linux trading pit:
>
>I am not sure how many of you tech people are watching the
>markets and particularly the Linux stocks but I just wondered what you
thought.
>
>I mean even with the late drops many are still trading at hundred times
>earnings. I see RedHat quite near its bottom at the 60 mark as off right
now.
>Corel is three times it's 52-week low right now which doesn't seem too high
for
>the potential they got with their Linux business.
>
>I am just wondering what others think on the short and long term
profitability
>on the Linux companies and their stocks. When do you see them making money?
Or
>when do you see them gain enough market share to stabilize their stock
price?
>
>I am just wondering if all the hyper day traders are finally out of the
Linux
>stocks so that the serious Linux people can secure their investments in
them.
>
>New distros coming out in August will feature a lot improvements and I
already
>see a second hype come aboard.
>
>  -- Marcel Kunath
>
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