Linux distributor Caldera buys Unix veteran SCO
Summary
In August 2000 the Linux distributor Caldera Systems took over large parts of the Unix vendor SCO, including the server software and professional services divisions. Caldera thus received SCO OpenServer, a support structure and access to around 15,000 sales partners. A joint “Open Internet Platform” made of OpenLinux and OpenServer was planned, and the price was 17.5 million shares and seven million dollars in cash.
Ideas
- A Linux distributor bought itself Unix customers and a sales network.
- OpenLinux and OpenServer were to form a joint platform.
- SCO kept the Tarantella division and a stake in the OpenServer business.
Insights
- Acquisitions in the software market often buy customer relationships above all, not technology.
- Combining a free and a proprietary code base carries legal tensions.
Facts
- The share component was worth around 120 million US dollars at the time.
- A new parent company, Caldera Inc., with managers from both firms was planned.
References
Critique
- The report only describes the deal from the companies’ point of view; questions about licences and the future of Unix customers remain open.
Remarks
- Caldera renamed itself The SCO Group in 2002 and sued IBM in 2003 over alleged Unix rights in Linux. The dispute lasted for years and was unsuccessful for SCO.
Recommendations
- With company takeovers in the software sector, check who holds the rights to code and trademarks afterwards.
- With proprietary Unix systems, plan a migration path in case the vendor changes.
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