Terra Soft to Merge With Japanese Cell Developer Fixstars

Terra Soft Solutions, the developer of Yellow Dog Linux (YDL), has been acquired by the Japanese software firm Fixstars Corporation, a developer of Cell Broadband Engine solutions.

The new company, now known as "Fixstars Solutions," is operating as a wholly owned subsidiary of Fixstars and will maintain its entire product line from a regional office in Loveland, Colo., where Terra Soft is based.

Former Terra Soft CEO Kai Staats will serve the new company as its Chief Operating Officer. Satoshi Miki, CEO of Fixstars, will continue to head the parent company in Japan. Fixstars has additional home offices in Montreal and Victoria, B.C., Canada.

"This acquisition completes the Cell ecosystem by providing a complete turnkey solution for vertical markets," Staats told LinuxInsider.

Corporate Histories

Terra Soft was founded in 1999 to provide a Linux operating system for the Power architecture family of microprocessors. With its early roots in Apple (Nasdaq: AAPL) PowerMacs, Terra Soft in 2002 became the only Apple Value Added Reseller licensed to install an alternative operating system. Ranking No. 5 in volume in North America in 2004, Terra Soft's customers included Lockheed Martin (NYSE: LMT), Boeing (NYSE: BA), NASA, DoE national labs, and top universities around the world.

Founded in 2002, Fixstars provides Cell Broadband Engine optimization services to companies such as Sony (NYSE: SNE), Toshiba, Mizuho Securities and U.S.-based Broadcast International. Fixstars helps customers optimize in-house applications where and when appropriate and provides solutions with immediate focus on the financial, healthcare, petroleum exploration and digital media fields

"I think Fixstars and Terra Soft are a very good combination to provide Cell-based solutions in America as same as Fixstars does in Japan," Satoshi Miki, CEO of Fixstars, told LinuxInsider.

Fixstars provides Cell-based solutions in Japan using YDL, a distribution for the Cell platform, he explained. Bringing the YDL developer on board makes good business sense, he said.

"To provide better total Cell-based solutions to customers, we want to have the YDL product inside the company rather than a partner company. Also, the Terra Soft team is very responsible, knows Cell very well," he said.

Sought Merger

Staats met with Miki in March while visiting Tokyo. As a YDL user, Miki was already interested in Terra Soft's work and recognized the value of a close working relationship, said Staats. The two began to work toward a value added reseller relationship with the goal of pre-installing Yellow Dog Linux on Fixstars' GigaAccel-180, a full Cell computer on a PCIe card.

When Miki later visited Terra Soft's offices, the two executives briefly discussed the potential of an investment or acquisition. Staats and Miki met again the last week of August to formerly discuss that plan.

"It was a simple, highly exciting conversation, for our vision for the future of the Cell ecosystem was already nearly perfectly aligned," Staats said.

Staats and Miki then entered into completing the legal documents two weeks later. They signed the deal on Oct. 30.

"We believe we may have set a new record for the speed of an asset acquisition, once again beating the odds," Staats said.

COO Position

The merger occurs just two months shy of Terra Soft's 10-year anniversary, though the closing of his company is not a sad time for Staats.

"What we are doing with this greatly expanded, far more capable team is tremendous," he said. "I am now the Chief Operations Officer and a board member for the new Fixstars Solutions. My first day on the job [for Fixstars Solutions was] the first time in 15 years I have worked for someone other than myself," noted Staats.

His first official duty as the COO was to go to Salt Lake City, Utah, with another Fixstars executive to meet with an existing customer .

"It was refreshing to engage technical challenges, face-to-face again. I am excited to spend more time in this capacity," said Staats.

The YDL Life

As the developer of Yellow Dog Linux and the more recent Yellow Dog Enterprise Linux, Terra Soft offers to Fixstars the completion of the Cell ecosystem. Fixstars is now able to offer an end-to-end solution from hardware to operating system to application optimization services, Staats explained.

"This is very important where the Cell processor is concerned, for while its potential for incredible performance is very high, the path to fruition is often quite challenging. With the Fixstars' team standing behind and assisting with every component in the process, the speed to functional product is dramatically increased," he said.

In addition, Staats will also be applying his experience and expertise as a systems designer and integrator. He will help bridge the language and distance barriers between our U.S. and Tokyo teams through shared knowledge and management systems.

Concurrent with the announcement of the acquisition, the Terra Soft Solutions Web site is replaced by us.fixstars.com, a domain name forward already in place. The content is slightly modified to reflect the acquisition.

Over the next few months, the companies will be integrating the www.fixstars.com and us.fixstars.com Web sites into a single content presentation with both Japanese and English translations, said Staats.

New Horizons

Only YDL and Red Hat (NYSE: RHT) Enterprise Linux (RHEL) distributions offer active support for the Power architecture and more specific for Cell Broadband Engine (Cell/B.E.). Yellow Dog Enterprise Linux (YDEL) has support for every Cell based computer on the market today, Staats said. These include Sony PS3 and ZEGO BCU-100, IBM (NYSE: IBM) QS2x and PXCAB, Fixstars' GigaAccel 180 and some Mercury OEM products.

"This is significant, for it enables customers to start -- perhaps with an inexpensive PlayStation -- to develop and test their code, even build a lightweight cluster. With the same code, they may upgrade to a Sony BCU-100, GigaAccel 180, or IBM QS22. This seamless code migration reduces cost of expansion and maintenance while building customer confidence in a growing product ecosystem," he explained.

The new company will continue work on Linux for the Power architecture with a primary focus on Cell. To that end, the company will seek expansion of its role as a reseller of IBM's and Sony's Cell-based hardware, Staats said.

In addition, Staats is actively engaging IBM Business Partners to expand the Yellow Dog Enterprise Linux channel partners to make YDL the defacto Linux OS for the Power architecture.