Y2K, C2Net, HKS and Red Hat

Dec 31 09

Y2K, C2Net, HKS and Red Hat

Paul Weinstein

In November of 1999 I had over a year
of work as a professional programmer under my belt working for C2Net
Software. It had been a bit of a bumpy ride, by the end of 1999 I had
already been hired, laid-off, hired as a consultant and rehired as an

Given the personal struggle and the
fact that I worked for an “Internet company”, I had a bit of
remote detachment about Y2K. But by November 1999, even C2Net was in
the mist of Y2K preparations, internally and externally.

Externally plenty of customers had, as
part of their own Y2K compliance efforts, started seeking us out long
before November to verify that our main product, the Stronghold Web
Server, was Y2K safe. The concern being that plenty of elements
about managing web traffic require proper handling of date and time
information, from the underlying network protocols to creation of
unique session identifiers. The good news was that Stronghold, was a packaged and commercially distributed version of
the Apache Web Server, which was indeed Y2K compliant, thanks to its
many developers.

While most customers went away content
with a signed letter of compliance, I remember our Sales and
Marketing VP asking me if I wanted to go to NYC on behalf of client
and be available if anything went wrong. Basically, since Stronghold
was in the clear and any web application the system was running would
have been outside of our domain – I was being asked if I wanted an
all expense paid trip from San Francisco to New York City to
witnesses the ball drop in Time Square for the new millennium1.
Naturally, I declined2.

Internally, the biggest worry I had was
dealing with our online credit card processing system. First off, the
virtual terminal program we had was running on Windows 98, which
itself was not Y2K compliant.

However, the bigger problem was the
credit card processing software, ICVerify. Today there are plenty of
solutions for processing credit card purchases, in real-time, online,
from do it yourself solutions such as MainStreet Softworks’ Monetra
to all-in-one solutions such as Google’s Checkout. But in 1999, while
a number of virtual terminal solutions, such as ICVerify existed, for
processing credit cards “by hand”, few solutions existed for
processing credit cards automatically, online.

In fact the only reason C2Net’s system
did real time transaction3
was because ICVerify had been hacked in such as way as to process
transactions via a secured network connection. The best part of the
situation, like many other Y2K issues, was that the person(s) who had
created the “solution” no longer worked for the company, as
everyone at the company had been adversely affected by the previous
year’s corporate turmoil, as I had.

Patching Windows 98 would hardly solve
the problem and since no one with the company understood the
ICVerify hack completely, it was unknown if patching it would
adversely affect our main method for selling Stronghold within the
United States.

Given that Stronghold was a
commercially distributed version of Apache and Apache at that time
was built for Unix (POSIX) based systems, the main requirement,
besides real-time processing, was the ability to run along with our
custom ecommerce system built using FreeBSD, Stronghold and PHP. That
left us with one viable solution, Hell’s Kitchen’s4

By December of 1999 I had already
identified CCVS as our would-be solution, to the point that I had
actually purchased it on behalf of C2Net and had started developing
the replacement credit card processing solution. Doing so had me in
contract with a couple of primary individuals at HKS, including the
founder, Todd Masco, who must of had his hands full with a few other
people, such as myself, rushing to replace their credit card
processing systems before the new year. Despite that I don’t recall
not being able to reach Todd or Doug DeJulio when needed.

Last Remaining Share
Last Remaining Share

That in and of itself endeared me to
HKS, but little did I know at the time that wasn’t going to be the
half of it. While I recall missing the end of the year deadline for
getting our new payment system operational by a week (or so), I
was hardly in the thick of it. In fact, if anything Todd, Doug and
HKS had most certainly had it much worst. For besides the presumed
end of the millennium rush to update transaction systems across the
nation, in the first week of 2000 the public announcement was made,
Red Hat had acquired HKS.

The folks at HKS really had played it cool.

Now here is where things get a bit
interesting, the main selling point of Stronghold was that it was a
full distribution of the Apache Web Server that included the commercial right to
use the encryption technology that allows for secure web
transactions, thus allowing one to built solutions such as our custom
ecommerce system. As mentioned Stronghold, by way of Apache, was a
POSIX based application that ran on systems such as FreeBSD, Sun
Solaris and on a the new, up-and-coming operating system Linux which
was (and still is) favored by Red Hat. CCVS was a POSIX based credit
card processing system.

All of which meant that by the summer
of 2000 I received a friendly phone call from Todd, now of
course at Red Hat, looking to build contacts at C2Net with regards to
possible partnership.

Now it was my turn to play to cool.

Given, in part, the issues at C2Net
over the previous year the majority owner of the company was looking
to sell and by late spring/early summer the whole of C2Net had been
informed that negotiations had been started in regards to Red Hat
purchasing C2Net5
and then sworn to secrecy.

So when Todd’s call came, I had to
politely tell him I would pass on his information to our VP of Sales
and Marketing and then of course made a beeline to said office after
hanging up with Todd. Sadly, with hindsight and all, I should have
realized that if Todd was in the dark about the potential purchase of
C2Net by Red Hat, given the obvious fit between the three products,
that the acquisition of HKS might have been poorly executed, which
in turn was not a good sign for C2Net. But at the time I recall
hearing shortly after that Todd did eventually get filled in. And by
August of 2000 C2Net and Red Hat issued a joint press releases
announcing the agreed upon acquisition.

1 That
is of course if, like most Americans, you can’t count and/or don’t
care that our Gregorian calendar had no year 0.

2 Call
it Bloomberg’s Law or whatever, but in the US one’s loathing of all
things New York (or Los Angeles) is inversely proportional to one’s
distance from New York City. Thus, Boston, which is closer, hates
NYC greater than Chicago. San Francisco, not so much hating NYC as
it does LA. New York and Los Angeles can of course clam no one
loathes themselves more than they do, which in doing so means they
care little about anyone else, given their immediate proximity to
their own location. Having grown up in and around Chicago, I
naturally care equally less about New York as I do LA.

3 And
for that matter the only reason why we had a machine running Windows
98 in our environment

Yes, despite my previous ragging on New York City, I do know that
not only is Hell’s Kitchen the name of a neighborhood in New York,
but if I recall correctly, that the company Hell’s Kitchen was in
fact named after said neighborhood.

5 A
bit fuzzy here on the timeline and details, but I recall hearing
about a deal between Caldera and C2Net that never materialized and
then Red Hat got cold feet when “the bubble burst” in purchasing
Red Hat, until various revenue commitments renewed discussions
between C2Net and Red Hat.