What: Pogo Linux, a company that manufactures and customizes computer servers, workstations and storage systems running on the Linux platform.

History: Founded in 1999 in Silicon Valley by University of California, Berkeley student Tim Lee when he was 20. Co-founder Erik Logan is chief technology officer. Two years later, hit by the valley's tech downturn, they moved Pogo Linux to Redmond for a lower cost of living and better quality of life.

What's new: The company has gone from six to 50 employees and experienced double-digit growth for the past three years. Sales increased 50 percent in 2004. The company has been profitable since 2000. It also opened a division in Shanghai and now gets almost half its sales from China.

Big picture: Linux is the fastest growing segment of the server software and hardware markets, competing with proprietary systems such as Microsoft's Windows. Lee chose the name to reflect "a pogo stick bouncing from Windows to Linux."

Advantage, Linux: Linux defies conventional wisdom about competing with Microsoft, Lee says. "Microsoft can't buy it out, since no one really owns it," he said. "There's not one target for them to shoot at, and they don't know where to aim."

Global game: A backlash against Microsoft is helping Linux. China's government is promoting Linux over Windows in government departments, and open source to develop its home-grown software industry.

On piracy: Linux is seen as one response to China's entrenched piracy problem. "Microsoft has gone in with a sledgehammer and tried to force the government to crack down on piracy," Lee said. "It's hard to pirate Linux when the operating system itself is open."

Customers: China's National Space Administration, online gaming companies, Internet cafes, semiconductor fabrication plants, the University of Washington, DirecTV.

Competitors: Hewlett-Packard, Dell, IBM, Lenovo.

Quote: "We're smaller, nimbler and more flexible," Lee said. "There's not that many companies our size investing in China. Not one of them is focusing solely on Linux."

— Kristi Heim