This article is more than 1 year old

Scaldera born in flames

Old Economy stalwart needs New Economy credit

The Unix business has never been known for the simplicity of its business alliances, and in that tradition one of the most complicated deals of all was concluded this week. Finally.

The SEC has at last approved the Santa Cruz Operation's merger with Caldera, which was originally announced last August, with the combined outfit trading under the Caldera International banner. SEC approved the S-4 filing on Monday, and a meeting of SCO shareholders is expected to see the deal completed on May 4.

The deal originally saw the Tarantella spin-off keep intellectual property rights to SCO's venerable OpenServer line, while Caldera had exclusive rights to sell it, guaranteeing Tarantella a revenue stream. After much wrangling, a much clearer arrangement with Caldera simply acquiring OpenServer outright, and rejigging its payments to Tarantella.

So the new Scaldera, as we must stop calling it, presents something of a curate's egg. It combines the Unix on Intel leader, with its strong and loyal channel, together with one of the oldest Linux distros. But will the merged outfit be indulged with New Economy generosity from its investors? That's in pretty short supply these days. Caldera lost $9m on revenues of fairly static revenues of $1m last quarter - an impressive burn rate. And SCO's Unix flavours have been hit particularly hard by the business slowdown: OpenServer is effectively in maintenance mode, and UnixWare is still regarded as one for the future, despite some big enterprise wins. SCO shed 20 per cent of its staff to even the budget late last year.

On the other hand, SCO's sever business brings in $24 million per quarter, and even after payments to Tarantella, that can only be positive for Scaldera's bottom line. And there isn't anyone better placed to ease the legion of SCO Users into the Linux future, and UnixWare's technology (particularly its Tandem-derived clustering) should turn rival distros green with envy.

Caldera's stock rose 14 percent yesterday in a falling market, although at $1.75 it bumps along at the bottom end of its trading range. ®

More about

TIP US OFF

Send us news


Other stories you might like