Linuxcare's Near Death Experience

When Sm@rt Partner last visited Linuxcare, it was a company in deep trouble. The CEO and CIO had left under a cloud, Red Hat had taken the lion's share of Dell's lucrative Linux work, and its IPO had been cancelled.

Most companies, especially a cutting edge technology business, might be contemplating going out of business. Linuxcare, however, has responded to its sea of troubles by sailing its way into an unexpected harbor of good business.

First, despite still not having a CEO, Linuxcare has inked several big deals over the summer. Foremost among them was Linuxcare's agreement with Fujitsu Siemens Computers to deliver Linux and open-source consulting and technical support to its customers and partners. Another significant deal for Linuxcare was with its agreement with Compaq to provide the first user-friendly install of Linux on Alpha chips.

That, along with some classy high-end wheeling and dealing, enabled Linuxcare to land a $30 million round of funding from Lehman Brothers, Itochu International, Charter Ventures, and others.

Since then, Linuxcare also has landed the job of making Linux drivers for Sun storage hardware. The first of those deals has brought Linux support to Sun's top enterprise data server--the Sun StorEdgeT3. You can expect to see more such deals from Linuxcare, making Sun-specific hardware Linux capable, in the near future. Other high-level deals with Motorola also are brewing.

As for the leadership void at the top, Linuxcare seems to be doing fine without a CEO. David Sifry, CTO and founder, says that while Linuxcare is interviewing candidates, it's in no hurry. "We're taking the time to find the right person, rather than the first one." After all, "our business is fundamentally fine."

And, given these surprising developments, few could argue with that. Linuxcare is now planning to IPO in 2001 and expects its first profitable quarter by that year-end. Some companies do get a second chance, and Linuxcare is making the most of its.