A View That Needs No Windows

February 6, 2000

A View That Needs No Windows

Issue in Depth
The New York Times: Your Money

By LAWRENCE M. FISHER

ike Bill Gates and Michael Dell, Larry Augustin spent his spare time in college toying with computers and wound up starting a company that made him a zillionaire. But unlike them, Augustin earned a college degree, at Notre Dame, and later a doctorate, at Stanford.
And so he comes across as less the entrepreneur from birth than the nerd's nerd, never happier than when up to his eyes in bits and bytes and the esoterica of hardware and software.

Barbara Alper for The New York Times
Larry Augustin, founder of VA Linux, the operating systems maker whose shares soared at the initial public offering, wants to free computer users from operating systems like Windows.

He proudly asserts that he was a charter subscriber to Sys Admin, a trade magazine devoted to systems administrators, the unsung heroes who keep computer systems running. "I've been a systems administrator for every operating system created in the last 20 years," he said.
Augustin's company, VA Linux Systems, a maker of computer systems in Sunnyvale, Calif., does not yet have billions of dollars in revenue. But it does have a multibillion-dollar market capitalization, thanks to an initial public offering in December that set records for first-day gains. And the stock provided most of the $1 billion that Va Linux agreed to pay last week for Andover.Net, an owner of Web sites offering technology news.
From a high of $320, Va Linux shares have dropped, closing at $125 on Friday. But at age 37, Augustin still has a net worth of about $825 million.
VA Linux is a standard-bearer for the Linux operating system and the Open Source movement. Augustin and the other founders of the company, and the movement, contend that by making the computer code underlying a program freely available, and readily modifiable by anyone, a stronger system with fewer crashes results, ending the domination of operating systems owned by one company, especially Microsoft Windows.
Linux is named for Linus Torvalds, a Finnish programmer who wrote a key component, though he has no connection with the company beyond his friendship with Augustin.
In the hands of Torvalds and Augustin, Linux has practically become a cult, although one with a sense of humor. Augustin breaks out in high-pitched bursts of laughter as he describes an esoteric online parody of slashdot.com, a Linux news site ("News for nerds. Stuff that matters.") owned by Andover.Net that doesn't take itself too seriously to begin with.
But go back to the late '80s and early '90s. Augustin had gone to Stanford after three years at AT&T Bell Laboratories, where he worked on high-speed digital switching. He ultimately wrote his PhD thesis on electronic automated design tools, the software used to create new chips.
He also spent much time playing scavenger -- collecting, among other things, cast-off disk drives, in the days when 30 megabytes filled a refrigerator-sized box. He used these castoffs to create a giant site, in a Stanford basement, that allowed the rapid exchange of information over the Internet before the days of the World Wide Web.
He also collected early workstations made by Sun Microsystems. His goal was to build a machine at his home that could use Unix, a sophisticated operating system widely found in academia and industry.
In 1993, Torvald released Linux on the Internet. Using this software, Augustin said, "I was able to put together my own computer for $2,000, and it was one and a half to two times faster than these old Suns, which cost about $7,000."
He continued: "Other people saw what I had and wanted one, so in November '93, I put up a Web page and said, 'I will sell people these systems.' I got my first check at the end of the month from someone I didn't know. I consider that the start of the business."
A couple of dozen companies have jumped on the Linux bandwagon, based on the premise that there is money to be made selling an operating system that anyone can obtain for free. VA Linux is unusual in that it sells complete computer systems that come loaded with Linux (but not Windows).
"We're designing from the ground up for Linux," he declared. "And what we offer to our customers is not just a system. It's full service, a single point of contact, service and support for building their entire infrastructure."
So far, VA Linux's major customers are all Web start-ups themselves, companies like Akamai Technologies and eToys, and most are less than two years old. But Augustin, whose buttoned-down shirts, neatly creased khakis and well-trimmed hair may qualify as the height of formality among Linux users, has positioned himself as the person to take the Linux message to corporate America.
"I make the argument that the current model of software development is just economically inefficient," he said. "I think this is the next big revolution in the software industry."
Stoking the revolution means long hours, he said recently, describing his previous day, which began in New York and ended in Silicon Valley. "Yesterday I got up at 3 a.m. California time, went into a set of meetings, got on an airplane, got back here at 3 in the afternoon and worked in the office until 7 p.m. when my wife started calling."
Balancing work and family can mean taking his wife, Alice Kitsuta Augustin, and daughter, Andrea, to industry gatherings like last week's Linux World in New York. "That's fine because we get together with Linus and the kids can play," he said, alluding to the fact that both of them have 3-year-old daughters.
Augustin tells employees not to think about VA Linux's share price, and he tries to take his own advice. "I didn't start this thing to cash in and get out," he said. "I started this to build a real company."

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