Red Hat Inc. will unveil an agreement this week to provide high-level technical support for Compaq customers running Red Hat Linux. Red Hat will also began shipping version 6.1 of the operating system this week, which includes server load-balancing and failover capabilities. The vendor will offer several versions of the package, with prices ranging from $30 to $150.

VA Linux Systems, a Linux computer manufacturer, said last week that it will release a packaged version of Linux called Debian, starting at $20, and will fund channel distribution with investments from Silicon Graphics Inc. and training company O'Reilly & Associates Inc. Red Hat, VA Linux, and others expect to expand their businesses with sales of services, such as integration and telephone support.

Also last week, Linux distributor TurboLinux said it secured an undisclosed amount of funding from Intel and venture-capital firms. Intel already has investments in Red Hat and VA Linux.

Linux has been seen as a niche operating system with a cult following. But it's gaining popularity among administrators of Web and departmental servers because of its stability and low cost of ownership.

"Linux provides a way to bring in a revenue stream with the least amount of cost and the most stability," says Dave Bennett, CIO of Inland Truck Parts Co., a $70 million distributor and retailer of parts for heavy-duty rigs. The Overland Park, Kan., company recently hired VA Linux to configure servers for its 400 employees.

The operating system still has some hurdles to clear--it doesn't scale well beyond four processors, and installation can be difficult for nontechnical users. Linux vendors are beefing up their service and support to address those issues.