"I don't think it's any secret that all the companies in this space have talked," TurboLinux's Thomas said in an interview. But Red Hat, the most powerful and best-funded Linux company, isn't buying -- at least not the standard Linux sellers. "Over the last three years, we've had discussions where we could have done that, and we have chosen not to," Szulik said. The company is more interested in moving into new software areas, he said. "Any of these distributions are great targets for Red Hat, but they don't have to buy these guys," said WR Hambrecht analyst Prakesh Patel. Red Hat has enough cash and revenue, combined with tight expense control, that it can afford to play a waiting game, he said: "It's the one company that's financially going to be there in the next couple years." The top Linux executives at Caldera and Turbolinux foresee increased cooperation between Linux companies, but Red Hat's comparative market strength means it can afford to set its own standards. "I think we'll see some opportunities emerge for collaboration in areas where frankly we should have been collaborating before," Caldera chief executive Ransom Love said in an interview. For example, other Linux sellers could put their weight behind a unified management software effort such as Caldera's Volution program, and the long-nascent Linux Standard Base would gain traction. Turbolinux's Thomas also predicts that versions of Linux will converge. "There will be a generic or standard Linux distribution," he said. "People are moving toward neutrality." Fat chance, observers say. "There's no reason for Red Hat to cooperate with Caldera or Turbolinux or SuSE," Patel said, adding that Red Hat has about 70 percent of the market, while none of the others accounts for more than 10 percent. Indeed, Szulik derides the standardisation hopes of Turbolinux and Caldera. "I don't think that coming out with a standard is going to be a great panacea," he said. Despite the troubles, there are some positive signs on the horizon. Little-known Ebiz Enterprises, through its acquisitions of Linuxmall.com and Jones Business Systems, expects to have positive cash flow by 30 June 30. Turbolinux, now with Linuxcare aboard, expects profitability by the end of 2001 if it can maintain its current revenue level, Thomas said. Red Hat is in good shape and could break even or perhaps see a profit in its next quarter, Patel said. "Red Hat has zeroed in on several winning business models," he said. "Riding the Linux hype, they did their secondary offering at a very high price. They haven't missed any quarters. They've grown gross margins." For his part, Szulik is trying to make sure Red Hat isn't tarred with the same brush of disdain that afflicts failing Internet companies. "It's very easy to put Red Hat in the same category as eToys," he said. "We're from that same era. But we're two very different businesses." Caldera's Love, despite his company's difficulty digesting higher-end Unix software from Santa Cruz Operation, has no regrets. "It's the maturation of Linux," he said. "Maturation is often awkward and painful to go through, but its result is far better." Even as Linux businesses are struggling, though, the idealistic motives that underlie much of the Linux movement still are intact. Eric S Raymond is author of open source manifesto The Cathedral and the Bazaar and is one of the most vocal open source advocates. But his position on VA's board of directors put him in the awkward position of having to vote for layoffs, he said in a recent letter posted on Linux discussion site NewsForge. "I went along with the 25 percent cuts because I understood the possible alternative: no company," Raymond wrote. "It was a weird, wrenching feeling to wander around VA headquarters that afternoon, talking with good friends of mine, knowing in a few cases that they were likely to be canned through no special fault of their own." But Raymond also has a deeper optimism, even though his previous paper worth of $41m has dwindled. "I wasn't in it for the bucks then, and I'm not now," he said. "If the slump does nothing else but take our eyes off those dollar signs and put them firmly back on the work, maybe it will have been the best thing for us after all." Take me back to Pt I/ In Linux Land the battle is on Take me to the Linux Lounge Have your say instantly, and see what others have said. Click on the TalkBack button and go to the Linux lounge Let the editors know what you think in the Mailroom. And read what others have said.