Just over ten months after the release of its first shrink-wrapped distribution, Progeny Linux Systems has announced that it is getting out of the shrink-wrap product business and concentrating its efforts on its consulting operations, where the company has already reported profits.

As a result, the company will not release a second edition of its popular Debian GNU/Linux-based distribution and plans to offer a migration guide to help users re-merge their Progeny installations with Debian's current 'testing' release, Woody.

A statement released by Progeny's Chairman, Ian Murdock, founder of the Debian GNU/Linux project, reads:

"The primary motivation for this decision is our desire for convergence with Debian proper. From a technical perspective, nearly all of the features we introduced in Progeny Debian have found or are finding their way into Debian, and it is thus becoming increasingly unnecessary for us to continue investing the resources required to maintain a separate 'Progeny enhanced' version."

Additional market pressures have also contributed to the decision.

According to Steve Schafer, Progeny's President and CEO, retail competition among distributors is intense and requires a six to eight month release cycle to even remain competitive:

"Mandrake and Red Hat own the show," he said, "to even play it costs a lot of money."

According to Schafer, larger retailers routinely demand results within two weeks of a product entering their inventory, and purchasers have become sensitive to fairly small differences between distributions, something Progeny's "leading but not bleeding" approach to package inclusion couldn't cater to:

"[Distributors] have to include almost everything that's new," Schafer said, a demand that has apparently caused some to step up to even more vigorous release cycles.

At the same time, the demand for more current content in distributions has matched a decline in the profitability of shrinkwrap distributions.

"Not only are [retail distributions] not a money maker, they can really run a company into the red," said Schafer, whose experience includes participating in the Macmillan/Mandrake distribution deal that first landed Mandrake in large retail outlets such as WalMart.

Progeny's focus hasn't always been commercial distribution. The company was initially founded to develop a project referred to as "Linux NOW (Network of Workstations)," a suite of software, filesystem, and kernel enhancements that would have provided unified administration tools, process migration, and intelligent cacheing of data across networks in order to make use of idle workstation resources. The Progeny distribution was intended to add much-needed enhancements to the Debian GNU/Linux installation and management process in order to provide a stable reference platform for Linux NOW.

The distribution included an enhanced GUI installer, hardware autodetection, and newer versions of key packages such as the 2.2.19 series of kernels (which included backports of popular 2.4-series features such as USB support) and version four of XFree86. In addition, the company provided a service for secure updates and phone support.

According to Schafer, the tide began to turn for the company in July when it failed to raise a second round of financing, prompting a move "from a product focus to a consulting focus," including putting more resources into its Progeny Services Network.

The company cut its staff to approximately half of its strength and focused on projects that included work with Hewlett-Packard on its IA-64 project and lower-profile jobs rolling out security solutions for web hosting companies. In late August, the company announced that development work on Linux NOW had been halted. Schafer now describes the project as "for all intents and purposes, defunct," noting that some in the company hold out hope for reviving it once markets improve. At the same time, Schafer says that the cuts combined with more profitable consulting work have allowed the company to show a profit.

Since then, Schafer says the change in focus has been further encouraged by a client list that appreciates Progeny's enhnancements but consistently asks for the mainline Debian distribution, currently at version 2.2 (Potato) and expected to make a new release (Woody) in the coming months.

In the mean time, the work Progeny's developers contributed to making Debian GNU/Linux more end-user friendly will be, according to Schafer, rolled back into the main Debian distribution. 'Discover,' Progeny's hardware detection software and database; and the autoinstaller the company's developers introduced to make installations across networks and clusters more efficient are both slated for inclusion in upcoming releases, as are several other enhancements. Schafer described the company's relationship to the distribution as "the Norton Utilities of Debian."

Current Progeny users will continue to receive support on their purchase until the end of this year. The company plans to release a guide assisting users in the process of re-merging their Progeny Debian GNU/Linux installations with the Woody release of Debian by the end of the month.