VNU Net: SCO and Caldera open to questions

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

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

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
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
Unchanged: Linux and
open source development to continue.
Unchanged: The
Openserver platform.
Unchanged: Clustering
and Unixware 7. Unixware will become a clustering
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”.