CALD buys a chunk of SCOC:
news.cnet.com
Caldera's SCO buy highlights new role for Unix
By Stephen Shankland
Staff Writer, CNET News.com
August 3, 2000, 12:25 p.m. PT
news analysis Symbolism was abundant yesterday when Linux seller Caldera Systems acquired the Unix products of
Santa Cruz Operation.
Although Unix remains a more mature product than its younger sibling, Linux, a clone of Unix, is the rising star.
Linux is receiving abundant attention from programmers, students and software companies such as
Oracle. Unix, meanwhile, has been relegated to a mere feature of a server bought from Sun Microsystems,
IBM, Compaq Computer, Hewlett-Packard or SGI.
SCO initially scoffed at Linux as an immature operating system, a gangling adolescent wanting to play in
the adult realm of Unix. But in the past two years, Linux has attracted the attention of major companies
such as IBM, Dell Computer, Compaq, HP, Intel, Oracle, SAP and countless others, and SCO has been
forced to recognize Linux as a serious competitor.
SCO moved gradually to embrace Linux, making sure Linux programs would run on SCO's Unix and
offering professional services for companies wanting consulting help with Linux. But Linux was moving
faster than SCO, and now SCO's Unix is part of a Linux company's product line.
With its acquisition of SCO's Unix products, Caldera has inherited SCO's main sales challenge: telling
customers why it's worth spending thousands of dollars on Unix when Linux is often just as good for many
tasks, such as running a few dozen point-of-sale terminals in a retail outlet.
The answer is that Unix is still much more mature when it comes to heavy-duty server tasks such as
running huge databases on servers with dozens of processors and requirements for minimal downtime.
But unfortunately for SCO, it turns out that's much easier to do when an operating system is tightly
wedded to a specific hardware design.
SCO must have realized it couldn't stay in business on its
own. Its solution to keeping its version of Unix relevant was
to join with IBM while hitching itself to the upcoming 64-bit
chip family from Intel, the IA-64 line. SCO teamed with IBM
to merge Big Blue's AIX version of Unix with SCO's UnixWare to create a composite
called Monterey-64.
But even with IBM's clout and Compaq's intention to adopt Monterey-64, the future of the
product is uncertain. Dell, for example, is putting its eggs in the Linux basket, despite examining Monterey-64 and Sun's version of
Unix, Solaris.
The moral of the story
There's a lesson here for Microsoft: Selling software on its own may not be a great business model. Microsoft's Windows is
immensely popular on the desktop and has strong prospects for low-end servers. But that franchise is endangered
by Linux's price structure: free or very cheap.
It's a lesson already learned by Novell, which has been making the shift from selling its Netware operating system
to selling back-end "directory" software for managing the resources of large groups of computers.
And Linux will get better. For one, SCO has highly regarded "clustering" software developed with help from Compaq. Clustering lets
one machine take over for another if the first fails and lets several computers share a job.
"We intend to move clustering over onto the Linux platform," SCO chief executive Doug Michels said.
Merging SCO's and Caldera's product lines won't be simple, however. Michels and Caldera CEO Ransom Love argue there won't be
redundancy having several Unix-like operating systems in one company, but the company will have to decide how to allocate
development and marketing resources among its products.
And neither SCO nor Caldera has fared very well with Wall Street of late. SCO's stock, currently at $3.28, has remained low except for
a spike in January. Caldera's price of about $7.75 today is well below its IPO price of $14 this year and its high of $33.
SCO has learned its lesson about the viability of standalone operating system products. Now it's Caldera's turn. |
