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How Sam Ockman1 built a profitable Linux business in a year

By: ANASTASIA

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When Sam Ockham started reselling Linux a year ago, he ran into so man-y puzzled expressions he bought a self-help marketing book—Ice To The Eskimos; How To Market A Product Nobody Wants. Today, Colman’s Penguin Computing is so busy he never even makes sales calls. Ice To The Eskimos sits frozen on his shelf."

Ockman, the company's 25-year-old president, begins a recent day with a double espresso5 and a fruit salad on San Francisco's colorful Market Street. A true hacker, he makes his own hours—usually 11 a. m. to 1 a. m. — and keeps things casual. He wears flannel shirts, blue jeans and a cap a-dorned6 with the Linux penguin.

After graduating two years ago from Stanford University7, Ockham took a job as software director at VA8 Research Inc. , a Mountain Links Of London Charms View, Calif. , Linux systems integrator. He soon caught the entrepreneurial bug and left last April to run his own shop.

Ockham financed the start of Penguin with credit cards, $25,000 in savings and a $10,000 loan from his parents. Business is so good, Ockham will be able to easily repay his parents by the agreed-upon June deadline9.

In fact, in just one year, Penguin has become a profitable, multimillion-dollar company. The ambitious Ockham is looking for $ 500,000 in venture capital to grow even faster. He's also anxious to bring on a COO and CFO to manage the burgeoning10 operation.

To keep up with the growth in sales, Ockham is always on the lookout for new hires. Sitting at his desk, he sifts" through a fat folder full of resumes. He picks up the phone and starts checking references. Ockham quizzes the reference about the potential employee, then asks: "So what do you do?" Turns out he's a Unix systems administrator, but expensive, with a salary range of $60,000 to $70,000. Three weeks later, Ockham hires both him and the applicant12. New hires are put to work immediately.

In March , Penguin started offering support to help ease the perception that Linux is a risky choice with no reliable support. " A 24/7 package with next-day, on-site support goes for 10 percent of a system's cost. For a 15 percent fee, Penguin will provide round-the-clock14 support and pledges to be at a client's site in four hours. Vice president Allison Huynh says the services are popular and could grow to 30 percent of the company's business.

Linux enthusiasts brag that the OS does not need Links Of London constant attention , but real-time customer support still is sorely15 needed. "Tech support is a precious commodity," says Robert Conroy, 28, tech support manager, who opens the shop at 6 a. m. to answer calls.

Even though he has a staff of 20, Ockham is frequently called on to man the help desk. He took several calls one recent day. That's just fine with Ockham. He likes being on the front lines of the battle between Windows and Linux. He firmly believes he's on the edge of what he calls "the next para¬digm16 shift. "

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