SAN JOSE, California – David Sifry nodded at the Red Hat Software booth, directly across from his own at Linuxworld.
"There's some pretty happy smiley faces over there," said Sifry, chief technical officer of Linuxcare. "Yep. Some pretty happy, smiley faces."
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Sifry was talking about the happy smiley millionaires manning the booth for Red Hat after shares in the company shot up to US$52.06 in Wednesday's IPO, nearly triple its $14 offering price.
It wasn't only the Red Hat paper millionaires who were smiling. Everyone at Linuxworld seemed to be grinning.
It was partly because the nascent operating system, which can be downloaded for free, continues to be sucked down faster than beer at a barbeque.
It was also because Red Hat's successful IPO – the first for a major Linux company – indicated there is probably a lot more money from Wall Street coming down the pipe.
VA Linux Systems, a major Linux hardware manufacturer, is in the final stages of planning an IPO. VA's president and CEO, Larry Augustin, confirmed that the company was searching for an underwriter.
"All this dot-com stuff is old news," Augustin said. "It's Linux that's the new thing. Who needs IPOs when you have LPOs – Linux public offerings?"
"It's a different business model – for one thing, there's a chance of some profits," Augustin explained. "The dot-coms have been overdone. At some point they are going to have to prove they have a business that's actually viable."
Among Linux distributors, other candidates for IPOs include two of Red Hat's biggest US-based competitors: Caldera Systems and Turbo Linux.
In the Linux services arena, there's Linuxcare.
Sifry, of Linuxcare, said his company was concentrating on building up its business before trying to raise money in the stock market.
On Monday, however, Linuxcare took out a full-page ad in The Wall Street Journal, thanking Linus Torvalds – the Finnish programmer who wrote the heart of the system and lent it his name – for getting the ball rolling.
The ad was a nice gesture and a nice profile raiser in the financial community's leading organ.
With a smile on his face, Sifry said he couldn't discuss an IPO. But one good indicator that Linux is attractive to Wall Street was the shifting proportion of T-shirts to suits.
In March, 70 percent of the Linuxworld crowd wore scruffy T-shirts, Sifry said. Today, it's 50 percent T-shirts and 50 percent suits, or the "California casual" equivalent of polo shirts and khakis.
"I think the Red Hat IPO continues to legitimize the Linux community as a whole," Sifry said. "It shows Linux is a viable business. It's the start of something big."
John Mashey, Silicon Graphics' chief scientist, agreed that Red Hat's IPO was a leading indicator.
"You're going to see more of it," he said. "It shows that people think there's money in it."
Now that some Linux companies are starting to make big money from free software, will there be a backlash from the people that make it happen, the Linux rank and file?
There didn't appear to be any bad feelings on the convention floor.
A group from the Atlanta Linux Showcase, a technical conference for Linux programmers, said the Red Hat IPO was absolutely great.
"It rocks," said Chris Farris, Showcase's vice president. His buddies nodded in agreement. "Yeah, it definitely rocks," another said.
"It's better than being bought up by another company," Farris added. "At least it makes it easier for them to stay true to their roots. And as long as they stay true to their roots, it's fine."
It proved difficult to track down Red Hat investors on the show floor, although the company set aside a large block of shares for the Linux community. But it wasn't hard to find people who wished they had shares in the company.
"I tried but didn't get any," said Arthur Tyde, executive vice president of Linuxcare. "I was pretty cheesed about that."
