SCO chief looks to UnixWare 7 for growth

On day one of its annual conference here today the Santa Cruz Operation Inc. boasted growing momentum behind its UnixWare 7 operating system, which the company's top official pitched as a dependable, scaleable platform for use in enterprise computing environments.

SCO announced that Oracle Corp. has released Oracle Applications and the latest version of its Oracle8 database software for UnixWare 7. Informix Corp. later this week will announce additional support for the SCO platform in its database software, said Doug Michels, SCO's president and CEO, in his keynote address.

In addition, SCO said it will ship this month a new release of OpenServer, its operating system targeted at small and medium-sized businesses. Version 5.0.5 adds streaming media technology from RealNetworks Inc. and increased support for network computing that allows mobile workers to more easily access a network, the company said.

SCO also unveiled a new version of Tarantella, a cross-platform, server-based product that lets users access Unix and other proprietary server applications over the Web. Release 1.2 includes enhanced features designed to make communications more secure between a client device and the server, SCO said.

But the focus of Michel's opening remarks was UnixWare 7, and how the company believes the operating system it released in March this year will allow SCO to steal business from market leaders like Sun Microsystems Inc.'s Solaris and Hewlett-Packard Co.'s HP-UX, which dominate the high end of the Unix computing market. [See "SCO Thinks Big at UnixWare 7 Unveiling," March 10. ]

UnixWare 7 combines elements of SCO's OpenServer Release 5 and UnixWare 2 operating systems. SCO originally acquired the UnixWare source code from Novell Inc.

"Bigger, more powerful servers used today must be more reliable, dependable and fully functional than ever before, and SCO's Unix can offer that," said Michels, who delivered his keynote outdoors at the leafy campus of the University of California, Santa Cruz.

"We really want to start getting more success in the enterprise market," he said later.

For users, SCO's UnixWare 7 could potentially provide a lower-cost alternative to Unix operating systems from Sun, HP and Data General Corp., which run on proprietary RISC (reduced instruction set computing) chip architectures, said Jean Bozman, an analyst with International Data Corp.

"RISC systems have historically been 30 to 40 percent more expensive than Intel-based systems" to purchase and maintain, Bozman said. However, SCO has yet to fully demonstrate that UnixWare 7 is scaleable enough and robust enough for use in large enterprise environments, she added.

To help position itself more as a player in big business, SCO tomorrow will make a joint announcement with Compaq Computer Corp. that involves Compaq subsidiary Tandem Computer Corp.'s Non-Stop clustering technology, SCO's Michels said.

The companies are expected to announce a program that will bring six-node clustering capabilities to UnixWare 7-based Compaq servers in a broad range of markets, an SCO spokesman said, though he declined to be more specific.

Growing support for Tarantella among large business customers will increase the brand recognition of SCO in the enterprise market, and lead to further adoption of UnixWare 7, Michels said. Tarantella runs on several Unix operating systems including Solaris and HP-UX.

SCO is targeting the enterprise in part because profits there are greater, but also because Microsoft Corp.'s Windows NT is steadily nibbling away at sales of lower-end Unix operating system software including SCO's OpenServer, analysts said.

To reach the more lucrative markets, SCO must first increase awareness among customers of its high-end Unix platform. It should do this by targeting its marketing efforts less at tech-savvy IS managers and more at business managers, who are increasingly the people who write the checks for corporate IT purchases, said Dan Kusnetzky, program director for operating environments and serverware at International Data Corp.

One Unix systems integrator at the conference said UnixWare 7 is a solid product, but that the company needs to make some refinements before it is ready for prime-time enterprise use. In particular, UnixWare 7 needs more device drivers, said David Gloria, vice president of Computer Integrators Inc. of Richardson, Texas.

"It's a great product; the performance is there," Gloria said.

Meanwhile, SCO said it remains committed to developing and supporting the OpenServer platform, revenues from which accounted for almost 80 percent of sales in its most recent financial quarter, Michels said.

The Unix system market in 1997 was more or less evenly split in unit terms between servers running on RISC processors and servers running Intel-type chips, Michels said. Of the 50 percent running on Intel-type processors, about four-fifths of those machines run SCO software, he said, referring to SCO figures.

SCO OpenServer Release 5.0.5 is scheduled to ship at the end of this month, priced at US$699 for the host system and $1,399 for a five-user system, SCO said.

The Year 2000 provides an unprecedented opportunity for the Unix industry to sell more of its software and services, as IS managers use the impending crisis as an excuse to replace systems and software they have long sought to upgrade, Michels said. That is especially the case since the delivery of Microsoft's Windows NT 5.0 slipped back to beyond 2000, he said.

"We're looking at the greatest opportunity for upgrade, retrofit and application-rejuvenation revenue we've seen in the history of the computing industry," Michels said.

The growth in popularity of freeware versions of Unix such as Unix-like operating system Linux also provides a boost, rather than a threat, to SCO's UnixWare since they enhance the credibility of Unix in general and lead to the creation of more development tools and Unix applications, Michels said.

SCO is in the process of adding Linux binary compatibility to UnixWare 7, allowing users to run Linux software on SCO servers "right out of the box," Michels said.

SCO has undergone several changes in the last year, including an executive reshuffle and an increased focus on distributing its software electronically rather than packaged in boxes, Michels said. The company has reduced its inventory in that time from around eight weeks to almost zero, cutting its costs along the way, he said.

SCO has also tried to improve relations with customers by making it easier to contact the company's sales staff and by providing more flexible licensing terms, Michels said.

"I don't think SCO has always been the easiest company to do business with, but we've done a lot of work there. If that's not working, let me know and we will fix it," he said.

Tarantella Version 1.2 is due to ship in the U.S. on August 29. Pricing will remain at $395 per user. The Security pack will sell for $50 per user, SCO said.