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Jun 25, 1997




April 28, 1997, Issue: 168
Section: Software

Deals Boost Visibility -- Linux OS makes inroads at retail stores

By Bradley J. Fikes

San Mateo, Calif.-Linux, a Unix-like but nonproprietary operating system, is becoming increasingly visible at retail this year due to a series of publishing and marketing agreements.

Backers of Linux are attempting to show that commercial profitability can be harmonized with Linux's "free software" use model.

In February, Macmillan Digital Publishing announced it would distribute a version of Linux by Red Hat Software, Durham, N.C. Called "The Complete Red Hat Operating System for Linux," it is sold at retailers such as CompUSA and Computer City for a suggested retail price of $49.

A dubious distinction also materialized in February:The first Linux virus was discovered by antivirus vendor McAfee.

So far this April:

- Macmillan expanded its relationship with Red Hat to a software and book publishing alliance. Macmillan created Red Hat Press to publish the book titles, under the Sams imprint of Macmillan Computer Publishing USA.

- Walnut Creek CDROM, Walnut Creek, Calif., is releasing its own 13-CD-ROM Linux edition, complete with electronic versions of two Linux books, a free upgrade and support.

- Caldera, in Orem, Utah, announced it will ship Corel WordPerfect and Netscape Navigator Gold for Linux. Last November, Caldera shipped Wabi 2.2, an application that runs Windows 3.1 programs under Linux.

Red Hat, Walnut Creek, Caldera and Infomagic, Flagstaff, Ariz., have joined forces to increase the retail visibility of Linux, said Dennis E. Burke, channel sales manager for Walnut Creek CDROM.

Although none of its backers predicts Linux will outsell operating systems by companies such as Microsoft, they champion it as a low-cost and powerful alternative to Windows NT, suited for use in a network, as a Web server, or on a standalone machine. By some estimates, as many as 5 million people worldwide are using Linux, Burke said.

Macmillan approached Red Hat last October because of Linux's growing popularity, said Gregg Bushyeager, Macmillan director for software publishing.

"Red Hat had gained significant momentum in their community. We approached them to leverage their brand with our software SKUs," Bushyeager said.

Linux users also feel a "sense of community" and loyalty to the OS

that makes marketing Linux-based products a "merchandisable" option, he said.

This sense of community includes the ethic that Linux developers should devote at least some of their time to pro bono development, said Ransom Love, Caldera vice president of marketing and sales. For example, in February, Caldera released its OpenDOS 7.0 operating system on its Internet site free to noncommercial and educational users. The source code was made available in March. OpenDOS is based on Novell's DOS 7 technology, which Caldera acquired last year. It runs all DOS applications, including Windows 3.1, and networking systems such as Novell's NetWare.

Brand marketing is critical to the retail success of Linux, said Red Hat president Robert Young. That's because Linux is made available under a General Public License that mandates making the source code available and guarantees all users the same rights to Linux as the provider. Without any proprietary control, name identity is the vendor's major asset.

Linux is often inaccurately described as freeware. While it can be distributed free of charge, the term refers to freedom of use for the software. Anyone can modify Linux and give away or sell their version, but they cannot restrict anyone else's right to do likewise. The contract terms are enforced by the license holder, the Free Software Foundation. The FSF refers to this as a "copyleft" model, as opposed to the proprietary copyright system. However, this only applies to Linux itself, not to applications built for Linux, such as Netscape Navigator.

While Red Hat cannot and does not want to prevent users from copying the software, Young said the company offers two values to registered users:technical support and the value attached to its name, which is a registered trademark.

"It's brand management," Young said. He offered the analogy of catsup, a product whose ingredients are known and used by many food manufacturers, but dominated by Heinz, because the brand name is trusted by consumers, Young said.

The FSF has no objection to this model and indeed promotes it-as long as the GPL is observed.

"Actually, we encourage people who redistribute free software to charge as much as they wish or can," reads a document on FSF's home page (www.fsf.org)

Walnut Creek and other Linux vendors are also pursuing brand-oriented marketing strategies.

Burke said Walnut Creek's product is packaged to fit onto retailer's shelves like any other commercial product.

"It will have the girth, weight and clean design [of proprietary operating systems] like Windows, DOS and OS/2," Burke said.

"Linux has grown up in retail, and we're taking it to the next level of becoming more mainstream," said Caldera's Love. "We have margins sufficient to provide VARs the opportunity to participate."

Retailers have become more informed about Linux, said Dean Taylor, Caldera director of worldwide sales.

"I've done four retail tours in the last 12 months," Taylor said. "The response has gone from 'I don't even know what you're talking about' to the point where they're getting continual requests for the product and they don't know where to go."

Copyright 1997 CMP Media Inc.

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