VA Linux closes hardware books

The business of Linux continued shifting last week as pioneer VA Linux Systems, Inc. formally shifted its business model away from hardware sales to focus on its SourceForge application software business.

At the same time VA Linux reported a fiscal fourth loss of $290,000 on sales of $16 million. The company had announced plans in late June to abandon sales of systems hardware in all regions except Japan. Final systems hardware orders and deliveries of systems, excluding Japan, have now been completed and closed, the company said last week.

With the new model, the company projected first quarter fiscal 2002 revenue to fall in the range of $3 to $4 million, with a net loss of between $10 million to $13 million. "We have made a significant transition over the past two months," said VA Linux CEO Larry Augustin. "We are now focused on delivering our software expertise through our new application software strategy, with our SourceForge product at its core. Our reduced levels of operating expense and cash use will provide stability as we further develop and improve SourceForge."

For the year ended July 28, VA Linux reported a loss of $525,000 on sales of $135 million.

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About the Author

Mike Bucken is former Editor-in-Chief of Application Development Trends magazine.