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Progeny Evolves Beyond Distribution Model - page 3

The Reports of Progeny's Demise...

  • October 17, 2002
  • By Brian Proffitt

In the recent past, any company that wanted to implement Linux on a device that would later be sold at market would have one of two choices: try to use a stock Linux distribution as is or take an existing distro and modify it to meet their needs. Essentially, therefore, creating their own distribution. Murdock's assertion is that providing Linux as a ready-made platform for such a business gets around this problem.

"The platform is for businesses who don't want to get into the distribution business," Murdock said.

Murdock cited the Google Search Applicance as an example of a company that could have benefited from the Platform Services approach. What Google did was modify Red Hat Linux to their needs. If Google had come to Progeny, Murdock said as a hypothetical, Progeny could have provided the mega-search firm with a tailor-made Linux platform upon which Google could have built their technology.

Linux has a lot of positives working in its favor as a platform, Murdock said. There's no chance of vendor-lock, the code is open source, intellectectual property issues are virtually non-existent, and Linux is already a time-tested OS.

"And," Murdock added, "you can't discount the royalty-free aspect."

Holding up his two-way pager/PDA device, Murdock mused that when such devices have an OS with a proprietary license, the cost of the OS severely cuts into the profit margin for the manufacturer. The amount of profit generated from each unit sold is nil when using a proprietary embedded OS. The manufacturers are compelled to generate revenue from other sources, such as services.

"Using Linux," he said, "allows companies to make money on products, not services."

What Platform Services will do, therefore, is take the best parts of Linux, whether it's whole distributions or just the bare essentials of Linux--whatever the customer needs to implement their own technology.

Currently, Platform Services is modeled on a subscription fee system of revenue, which is not tied to the number of end units sold.

Murdock hopes that this will soon evolve into a more end-to-end model, where Platform Services will have more of a subscription-based model as Progeny will assist the customer from initial development, to deployment, and even to maintenance, if need be.

"My hope in moving toward an end-to-end model down the road is that we can derive revenue based on the number of units deployed, rather than the number of units sold, the traditional way to derive revenue from software," he explained.

Platform Services already has one big-name customer to its credit: HP has utilized Progeny's new service to create an effective programmer's toolkit that HP's developers can use to more effectively develop apps for Linux.

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