With Linspire in Its Belly, Xandros Eyes Expansion

Custom Linux provider Xandros announced Wednesday that it has acquired Linspire , developer of the CNR software distribution facility, and the Linspire and Freespire Linux desktop operating systems.

Xandros, which also develops Linux desktop and server products along with advanced cross-platform Windows-Linux management tools, will use the combined technologies, expertise and market presence of the two companies to support its goal to becoming a one-stop Linux solutions company, officials said.

The acquisition was made to enhance Xandros' ability to provide a growing number of Linux and mobile users with one-click software delivery to update their devices. It's also intended to facilitate third-party applications development and provide access and delivery to users of applications and content from digital warehouses, according to Xandros.

"Xandros and Linspire have had talks at the CEO level over the years about the possibility of a combination given their historically similar Debian-based roots and complementary product lines. Such talks accelerated in late 2007 and culminated in the current agreement," Andreas Typaldos, CEO of Xandros, told LinuxInsider.

Terms Clarified

The transaction was an acquisition rather than a merger, Xandros said. The company declined to disclose the financial terms of the agreement.

The acquisition retains nearly all of Linspire's engineering, support and key sales staff. However, a small number of administrative and related resources were not included to prevent redundancy with existing Xandros staff in a number of areas, according to Typaldos.

Linspire will remain an independent company, even though it is now a wholly owned subsidiary of Xandros. Typaldos will serve as president of Linspire.

Linspire CEO Larry Kettler will serve as vice president of Xandros' executive management team for business development, Typaldos confirmed.

"Xandros has emerged as a leader in the OEM (original equipment manufacturer), mobility, desktop and PC management and application business, so I'm excited to see the Linspire technology, including CNR, go to a worthy competitor that shares our vision," said Michael Robertson, Linspire founder and chairman. "The Linux business is going through some healthy and necessary consolidation, which will give resulting companies greater assets and size to deliver on larger initiatives so Linux can touch more people."

Freespire Continues

Xandros will continue to offer downloads through the digital software distribution warehouse for a variety of Linux platforms, including Freespire, which will continue to be maintained as an open source project, the company said.

Pending further planning, both product lines will be maintained, said Typaldos.

No changes are planned for products and services currently available to existing Linspire/Freespire users, he added. However, Xandros has not yet developed plans for combining desktop technologies from the two companies.

Other Details

Xandros' acquisition of Linspire is not related to an agreement last year between Xandros and Microsoft (Nasdaq: MSFT), according to Typaldos. The acquisition also will not affect Xandros' ongoing relationship with Microsoft, he said.

In June 2007, Xandros and Microsoft inked a broad collaboration agreement for technical, business, marketing and intellectual property commitments. The goal was to provide customers with enhanced interoperability and related benefits to bridge the gap between open source and commercial software.

"Xandros has always planned to continue increasing its product portfolio, and Microsoft understands and respects our strategy in that regard. On whether Microsoft was consulted, Xandros is an independent company and consults internally with its board, management and advisers, and not with outside parties in making decisions," he said.

Company Growth

Xandros remains in what Typaldos described as a heavy hiring mode. The company's fast growth path has positioned it as the third largest Linux company in the world and possibly the largest private Linux firm, he said.

However, Typaldos declined to reveal the total sales and profits for the combined company because Xandros is a privately held business.

The acquisition of Linspire is part of Xandros' expansion into the enterprise market, he confirmed. It is part of Xandros' larger plan and vision to become a full product company to service both the consumer/OEM and enterprise markets. Neither company will change its open source strategy.

The acquisition also provides Xandros with advanced CNR technologies and Linux expertise and enlarges its customer base and support network.

Future Vision

The acquisition will result in tighter integration between Xandros and Linspire products, according to Xandros. Integration of CNR and the Xandros Networks on Xandros and other platforms will be launched shortly.

Additional products will follow, but no changes are planned for CNR customers using Ubuntu, Red Hat, Suse and other Linux operating systems, according to Typaldos.

"Products like the Asus Eee PC have demonstrated the huge potential market for Linux-based OEM netbook solutions, and CNR will help Xandros make these platforms easy to enhance and maintain, while providing on-demand delivery of a growing number of Linux applications, utilities, games and content," said Typaldos.