|
Mission Critical Linux Axes 90 Percent of Workforce
by Kristin Palitza
Once promising Linux-developer Mission Critical Linux (MCLX) had to lay off 90 percent of its workforce, or 60 employees, after it failed to sell its business last week. The company cut off its entire services and consulting arm to focus solely on product development. "We need to concentrate on making money; it's a tough business environment," founder Moiz Kohari told Guild Companies. The company plans to put all its resources into improving its Convolo high-availability clustering technology. Convolo comes in two variations, DataGuard and NetGuard, both Linux high-end clusters to prevent server locks through failover capabilities.
"We needed to get away from offering operating systems support services," Kohari said. The company's services provisioning strategy didn't work out for mainly two reasons, he further said, first due to a general slowdown in the services market, and second because MCLX did not succeed in competing against large providers that dominated the field, like IBM Global Services. Most of MCLX's employees were hired to provide professional services, and as the start-up changed its strategy to refocus on products, it had to let go all services people--the majority of its workers, Kohari said. "Product development doesn't require hundreds of people," he added.
Only the core group of the start-up is left after those extensive cuts, including Kohari, Senior Vice President of engineering Steve Ofsthun, Chief Technology Officer Dave Winchell, and Chief Financial Officer Michael Keller. This group, mainly former Compaq engineers who founded the company in 1999, developed MCLX's Convolo flagship product.
Kohari is back at a top position at MCLX after he left the company for about four months. Last year, Kohari tried to sell MCLX, thinking, "we had two significant offers to sell." Kohari left the start-up--"They didn't need me anymore," he said--and named Robert Tumanik as replacement CEO last July. But both deals fell through. The potential buyers were never disclosed, but one of them was reportedly commercial Linux distributor Red Hat Kohari, back at MCLX, said he is now handling "business development and other engineering-related issues."
The Lowell, Massachusetts-based MCLX recently got some help to stay alive. It received a significant, but undisclosed amount of funding from undisclosed investors two weeks ago, that Kohari said allow the company to continue operations for longer than one year. However, MCLX will continue to face fierce competition from Red Hat, which is also developing Linux-based high-end clustering technology.
|
