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Intel Invests in eSoft - "Lintel" Continues to Grow

Written By: R. Krause
Published On: November 17 1999

Event Summary

November 16,1999 [CNET News.com]LAS VEGAS--Intel has invested in eSoft, a maker of Linux-based servers for small businesses, the chip giant's fourth Linux investment.

The amount of the investment was not disclosed. Under a deal with Intel also announced today, Intel will help the company develop software for Linux servers designed to be used on the Internet.

"We are confident this support will enable eSoft to accelerate our future research, development and business expansion activities," eSoft Chief Executive Jeff Finn said in a statement.

Intel's first Linux investment was in Red Hat, the leading seller of the Unix-like operating system. Since then, Intel also has invested in VA Linux Systems, a maker of Linux computers that is about to go public, and in TurboLinux, another Linux seller whose strategy is to add proprietary software on top of the operating system.

Market Impact

Coupled with Intel's recent decision to make Red Hat Linux available on their servers (See TEC News Analysis article: "Intel Throws its 'Red Hat' into Linux Ring", November 3rd, 1999), as well as their investments in VA Linux and TurboLinux, this continues a significant push by Intel to develop a "Lintel" presence. Linux already ships on approximately 15% of the servers sold in the US, this announcement will help increase that percentage. As Intel increasingly throws its weight behind Linux, the Linux market will grow.

This alliance will not lead to immediate consolidation, since the Linux server market is presently expanding with many entrants trying to create a leadership presence.

User Recommendations

As with previous Lintel-related announcements, this will provide reassurance to potential users concerned about Linux not being supported by a major computer manufacturer. In addition, users considering Linux will value the proliferation of choices in this market, despite the potential for confusion re: differentiating between Linux vendors.

One of the indirect effects of this announcement is movement of the Linux server choice away from the risky OS-based decision and closer to the product-based decision. As support for Linux continues to build, users should be less concerned that their investment in an "alternative" OS will lead them toward a dead end.

 
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