Caldera Caldera to buy SCO Unix

7-Jul-00 - Signed by the CEOs, the deal awaits signatures from SCO's board to seal and deliver it.


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Both SCO and Caldera face serious challenges in the marketplace. The two companies have compatible business models (a heavy emphasis on sales through the integrator and VAR channels), so a merger of strengths makes sense. Caldera, a relatively young company, hopes to take advantage of the large network of VARS, integrators and software developers SCO has built to advance its Linux distribution, while SCO sees them as likely to defect to Linux anyway.

Caldera is backed by Ray Noorda, founder of Novell, and has the financial savy to pull off a deal like this. Caldera's backers are flush with cash from Microsoft, which just bought off the DR-DOS dirty business practices suit to the tune of somewhere between 350 and 500 million dollars.

SCO faces the fact that its Unix is not well positioned to compete effectively against either Windows 2000 Server or against Linux.

  • Linux has marketing momentum, which SCO does not have. Everyone has heard the Linux story and how inexpensive, reliable and well supported it is. Hardly anyone knows anything about SCO.
  • SCO customers see their "computer guy" maybe twice a year, because the system just keeps on ticking, and any needed administration can be done from a thousand miles a way as easily as on-site. Once they get a few Windows PCs, the "Windows guy" is in there practically every week trying to make that trash work. Every time he's there, he's agressively selling more Windows products, Windows 2000 Server in particular.
  • SCO's systems run so well so long, they don't need replacement for many years, so most SCO systems are old. When a business decides to "modernize", it doesn't even occur to them that SCO has modern stuff too.
  • Microsoft's multi-billion dollar marketing effort needs no comment.
Caldera, despite its innovativeness and the high quality of it's Linux distribution, is having its own marketing problems.
  • Red Hat's Linux distribution is relatively junky, but Red Hat's flambouyant marketing is everywhere. As Microsoft has so adequately demonstrated, business will buy well marketed junk rather than quality product every time. Caldera was originally a Red Hat distributor, and financed some Red Hat development, such as the RPM install module, but parted ways over quality issues.
  • Software developers haven't the business sense of sea slugs, nor are they capable of a business plan extending beyond lunch. They haven't learned a thing from being crushed by Microsoft, and now they say "We only support Red Hat". OK, so get crushed again. What a bunch of idiots!
  • Business buyers have been conditioned by Microsoft to the "one winner, many losers" concept and they simply don't understand why Linux is different. They instinctively accept that "We only support Red Hat" bull. If it'll run on one Linux distribution, it'll run on the others, unless the developer has done something really stupid.
SCO will continue as a support organization. Which organization gets the Tarantella Web enabling product is not yet clear.

How does this affect your business?

This move will greatly strengthen Linux in the face of Windows 2000, making it easier for business to escape the smothering blanket of Microsoft dependence, and save a lot of money in doing so.

It will be easier for a business to select a higher quality, more powerful Linux distribution than Red Hat. By bringing SCO's advanced Unix features to Linux, Caldera will bypass the need for a great deal of duplicate development. It will greatly accelerate the availability of truly business quality applications running on Linux, and improve the level of support businesses can expect if they adopt Linux.

Much of the SCO product will eventually be GPL'd and appear in other Linux distributions, but, in the mean time, it will strengthen Caldera as the best choice for Linux in business.

How does this affect Automation Access?

We currently work with both SCO and Caldera. This looks like a solid win for us, creating a simpler product structure and improving our market position. We will now be backed by a far stronger Linux organization.

©:Andrew Grygus - Automation Access - www.aaxnet.com - aax@aaxnet.com
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