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VNU Net: SCO and Caldera open to questions

Aug 31, 2000, 22:00 (0 Talkback[s])
(Other stories by Nick Booth)

By Nick Booth, VNU Net

SCO is a company that might have been. It owns original Unix technology which runs on the ubiquitous Intel platform and had an open and co-operative culture. But IBM and Microsoft triumphed while SCO pottered along, eventually ending up in the hands of a Linux startup.

At the SCO Forum this year, the first since Caldera signed to buy two divisions of SCO, we looked for signs that, beneath all the slogans and lip service, a realistic reseller partner strategy had emerged.

Caldera is in the throes of completing its purchase of two of the three divisions of SCO (the third, Tarantella, will now exist as a separate company), and by the end of October, Doug Michels, SCO chief executive, said the newly acquired Server division and Linux/Unix division of SCO will enable its partners to cash in.

The internet, said Michels, is making the browser the de facto interface for accessing business information. "We're going to smash Windows," Michels told the whooping assembly of SCO developers and customers.

As is his custom, he treated the audience to some other predictions for the coming year. Internet infrastructure will dominate the commercial computer world, and leased line wide area networks will be replaced by virtual private networks.

He also said that application service providers (ASPs) will be the preferred method of delivering IT, that Linux and Unix will merge as one community of open systems and that proprietary platforms will be eliminated.

Any reseller thinking of acting on his words might take note that last year's predictions did not include the observation that SCO would be bought by a Linux company. Perhaps he didn't want to create a stampede for its shares.

Despite the obvious flexibility and security of all strands of Unix, it is arguable that its weakness lies in the nebulous set of products with which it is associated. According to the people paid to clarify these types of business issues, the penguins have landed. This, apparently, is old news, and the whisper these days is about the company the penguins keep.

Events have conspired to present the owners of SCO a second chance to dominate IT, he said, adding that open source computing and the internet are nothing new. The development of the latter as a commercial entity has put all the elements in place for a different IT business model.

A Love of commitment
Ransome Love, chief executive at Caldera, said: "What the world needs now is a company that can give Linux a global infrastructure and a commitment to open source computing."

"We need something that goes on every platform, from the thinnest client to the fattest data centre," he added. "To fully exploit the opportunities you need to get support through partners in every level of every market of every industry."

This is only possible, he argued, if Linux vendors like SCO/Caldera do more to tailor the technology at the core of the operating system.

The abiding question remains how resellers and partners will ever make money out of these worthy IT initiatives. Does Caldera need to create its own proprietary brand of Unix/Linux and keep its code closer to its chest? Openness hasn't been lucrative so far, so will the perceived value of the product be greater if the company was less accommodating and more aggressive?

"We won't make Unix proprietary," said Love. "The future is an open internet platform."

Resellers eyeing Tarantella as a potential money spinner must also risk backing an untested formula.

Tarantella's independence means two things. Firstly, it has to build a prestigious portfolio of big clients. "Our main objective is credibility," explained Mike Orr, Tarantella's president. "We are practically a startup now, so we need to get the big enterprise customers on board quickly."

Secondly, independence means Tarantella no longer needs to push SCO/Caldera products. The first choice among prospective enterprise customers is Sun Microsystems, after which they opt for Hewlett Packard, he admitted.

The predominant platform for the enterprise market, which Caldera expressly bought the two SCO divisions to sell into, is on Risc-based systems. "You'd be amazed how many sales of hardware are tied up with software," said Orr.

It would be a cruel judgement to interpret this as meaning that when you need credibility and you're no longer hidebound to push SCO, you no longer push it.

Perhaps there are other interpretations, but whatever the outcome it is now up to Caldera to get a clear message out to customers and the channel.

Change, no change.
All change: Tarantella is now a separate company, renamed Tarantella Corporation. Its goal is the publication of applications designed to run on the internet, as demand for thin client and ASPs increases. Tarantella owns 28 per cent of Caldera.
Unchanged: Monterey. The next-generation Unix project that SCO started with IBM to develop open systems products will bear its first fruit, called AIX5L.
Unchanged: Linux and open source development to continue.
Unchanged: The Openserver platform.
Unchanged: Clustering and Unixware 7. Unixware will become a clustering product.
Unchanged: Both firms remain unprofitable. For the three months ended 31 July, Caldera reported a loss of $7.5m. For its latest quarter ended 30 June, SCO lost $19.2m. Asked whether this will continue, Caldera's Love quipped "see you later".

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