Last week, VA Linux Systems exploded on Wall Street with the largest first-day stock market gain ever recorded.
The stock was priced to open at $30 (US$), but incredible demand caused shares to shoot out of the gate at an amazing $299. By the time that all the dust had settled on the Nasdaq Stock Market floor, VA Linux closed at $250, up 733 percent from the IPO price.
This Linux-fueled ride on Wall Street is the second since August, when Red Hat closed at $52.06 on its first day out. Red Hat also benefited from VA Linux’s Wall Street debut Thursday, and closed the day at about $300 a share.
Profit Model Based On Service
Since Linux is already a free and open system, companies like VA Linux and Red Hat will ultimately have to make their money by bundling Linux with related software utilities and manuals — and by providing support service.
This arrangement has caused some detractors of Linux to wonder if shareholders might be expecting too much from companies that have a product that anyone can download from the Web for free.
Nonetheless, companies that are developing applications for Linux are benefiting from this Linux fad. The day before the VA Linux IPO, shares of Corel soared. The company sells a Linux operating system and is also developing Linux versions of its word-processing and graphics software.
Will Momentum Continue?
While Microsoft publicly claims to consider Linux a real competitor, it has been rumored that the software giant is not really sweating it. Apparently, as far as Microsoft is concerned, the Windows operating system is already the standard and the battle has been won.
A few months ago, I basically agreed. However, I’m not so sure anymore.
There is such a growing desire among computer users for an alternative to the Windows operating system that I believe it will push the Linux movement toward history. Not the kind of IPO history that VA Linux registered the other day, but something much, much bigger.
If more companies begin developing applications for Linux, and more major computer manufacturers begin loading them onto their PCs, there will be a Linux revolution within 18 months.
Linux Could Sweep Market Overnight
This scenario is what investors on Wall Street were envisioning last week. I’m personally looking forward to the day when I can at least have the choice of using another operating system besides Windows for my daily work.
What do you think? Let’s talk about it.