SCO Group
The SCO Group was an American software company in existence from 2002 to 2012. It became known for owning Unix operating system assets that had belonged to the Santa Cruz Operation, including the UnixWare and OpenServer technologies. Under CEO Darl McBride, it pursued a series of high-profile legal battles known as the SCO–Linux controversies.
The SCO Group began in 2002 with a renaming of Caldera International, accompanied by McBride becoming CEO and a major change in business strategy and direction. The SCO brand was re-emphasized, and new releases of UnixWare and OpenServer came out. The company also attempted some initiatives in the e-commerce space with the SCOBiz and SCOx programs. In 2003, the SCO Group claimed that the increasingly popular free Linux operating system contained substantial amounts of Unix code that IBM had improperly put there. The SCOsource division was created to monetize the company's intellectual property by selling Unix license rights to use Linux. The SCO v. IBM lawsuit was filed, asking for billion-dollar damages and setting off one of the top technology battles in the history of the industry. By a year later, four additional lawsuits had been filed involving the company.
Reaction to SCO's actions from the free and open-source software community was intensely negative, and the general IT industry was not enamored of the actions either. SCO soon became, as Businessweek headlined, "The Most Hated Company in Tech". SCO Group stock rose rapidly during 2003, but then SCOsource revenue became erratic and the stock began a long fall. Despite the industry's attention to the lawsuits, SCO continued to maintain a product focus as well, putting out a major new release of OpenServer that incorporated the UnixWare kernel inside it. SCO also made a major push in the burgeoning smartphones space, launching the Me Inc. platform for mobility services. But despite these actions, the company steadily lost money and shrank in size.
In 2007, SCO suffered a major adverse ruling in the SCO v. Novell case that rejected SCO's claim of ownership of Unix-related copyrights and undermined much of the rest of its legal position. The company filed for Chapter 11 bankruptcy protection soon after and attempted to continue operations. Its mobility and Unix software assets were sold off in 2011, to McBride and UnXis respectively. Renamed to The TSG Group, the company converted to Chapter 7 bankruptcy in 2012. A portion of the SCO v. IBM case continued on until 2021, when a settlement was reached for a tiny fraction of what the SCO Group had initially sued for.
Initial history
Background
The Santa Cruz Operation had been an American software company, founded in 1979 in Santa Cruz, California, that found success during the 1980s and 1990s selling Unix-based operating system products for Intel x86-based server systems. SCO built a large community of value-added resellers that eventually became 15,000 strong and many of its sales of its SCO OpenServer product to small and medium-sized businesses went through those resellers. In 1995, SCO bought the System V Release 4 and UnixWare business from Novell to improve its technology base. But beginning in the late 1990s, SCO faced increasingly severe competitive pressure, on one side from Microsoft's Windows NT and its successors and on the other side from the free and open source Linux. In 2001, the Santa Cruz Operation sold its rights to Unix and its SCO OpenServer and UnixWare products to Caldera International.Caldera, based in Orem, Utah, was founded in 1994 by several former Novell employees who saw promise in Linux as a technology and failed to convince Novell management to move forward with it. Caldera's early funding came from Ray Noorda, the former CEO of Novell, and the Utah Valley-based Canopy Group investment fund that Noorda started for high-technology firms. The company had been in the business of selling its Caldera OpenLinux product but had never been profitable. It attempted to make a combined business out of Linux and Unix but failed to make headway and had suffered continuing financial difficulties. By June 2002, after it had moved to nearby Lindon, its stock was facing a second delisting notice from NASDAQ and the company had less than four months' cash for operations. As Wired magazine later wrote, the company "faced a nearly hopeless situation."
On June 27, 2002, Caldera International had a change in management, with Darl McBride, formerly an executive with Novell, FranklinCovey, and several start-ups, taking over as CEO from Caldera co-founder Ransom Love.
Back to a SCO name
Change under McBride happened quickly. On August 26, 2002, he announced at the company's annual Forum conference relocated from Santa Cruz to Las Vegas that Caldera International was changing its name to The SCO Group. He did this via a multimedia display in which an image of Caldera was shattered and replaced by The SCO Group's logo, which was a slightly more stylized version of the old Santa Cruz Operation logo. The attendees at the conference, most of whom were veteran SCO partners and resellers, responded to the announcement with enthusiastic applause. McBride announced, "SCO is back from the dead", and a story in The Register began simply: "SCO lives again." As part of this, the company adopted SCOX as its trading symbol.The change back to a SCO-based name reflected recognition of the reality that almost all of the company's revenue was coming from Unix, not Linux, products. For instance, McDonald's had recently expanded its usage of OpenServer from 4,000 to 10,000 stores; indeed, both OpenServer and UnixWare were strong in the replicated sites business. Furthermore the SCO brand was better known than the Caldera one, especially in Europe, and SCO's large, existing reseller and partner channel was resistant to switching to Caldera's product priorities.
Image:Strategy discussion at The SCO Group in Linden Utah December 2002.jpg|thumb|left| A high-level strategy meeting being held among executives, product managers, and engineering personnel of The SCO Group, in the company's Lindon, Utah offices in December 2002
McBride emphasized that the OpenServer product was still selling: "What is it with the OpenServer phenomenon? We can't kill it. One customer last month bought $4 million in OpenServer licenses. The customers want to give us money for it. Why don't we just sell it?" As a historical comparison for his strategy of building back up the brand and being more responsive to customers, McBride used a model of the revival of the Harley-Davidson brand in the 1980s. Besides McBride, other company executives, including new senior vice president of technology Opinder Bawa, were heavily involved in the change of direction.
The product name Caldera OpenLinux became "SCO Linux powered by UnitedLinux" and all other Caldera branded names were changed as well.
In particular, the longstanding UnixWare name which Caldera had changed to Open UNIX was restored, such that what had been called Open UNIX 8 was now named in proper sequence as UnixWare 7.1.2. Announcements were made that a new OpenServer release, 5.0.7, and a new UnixWare release, 7.1.3, would appear at the end of the year or beginning of the next. Moreover, through a new program called SCO Update, more frequent updates of capabilities were promised beyond that. Caldera's Volution Messaging Server product was retained and renamed SCOoffice Server, but the other Caldera Volution products were split off under the names Volution Technologies, Center 7, and finally Vintela.
Software releases and e-commerce initiatives SCOBiz and SCOx
In addition to reviving SCO's longtime operating system products, the SCO Group also announced a new venture, SCOBiz. SCOBiz was a collaboration with the Bellingham, Washington-based firm Vista.com, founded in 1999 by John Wall, in which SCO partners could sell Vista.com's online, web-based e-commerce development and hosting service targeted at small and medium-sized businesses. More importantly, as part of SCOBiz, the two companies would develop a SOAP- and XML-based web services interface to enable Vista.com e-commerce front-ends to communicate with existing back-end SCO-based applications. Industry analysts were somewhat skeptical of the chances for SCOBiz succeeding, as the market was already crowded with application service provider offerings and the dot-com bubble had already burst by that point.Lastly, SCO announced a new program for partners, called SCOx. A key feature of SCOx was a buyout option that allowed SCOx solution providers to sell their businesses back to SCO. McBride stated that the program would give partners a chance at "living the American dream".
The company's financial hole was emphasized when it released its results for the fiscal year ending October 31, 2002 it had lost $25 million on revenues of $64 million.
The previously announced operating system releases began appearing, beginning with a Linux release. Caldera International had been one of the founders of the United Linux initiative, along with SuSE, Conectiva, and Turbolinux, and the newly-named SCO Linux 4 came out in November 2002, in conjunction with each of the other vendors releasing their versions of the United Linux 1.0 base. The SCO product was targeted towards the small-to-medium business market, whereas the SuSE product was aimed at the enterprise segment and Conectiva and Turbolinux were intended mostly for the South American and Asian markets. The common United Linux base, and the promise of common certification across all four products, attracted some support from hardware and software vendors such as IBM, HP, Computer Associates, and SAP. An assessment of SCO Linux 4 in eWeek found that it was a capable product, although the Webmin configuration tool was seen as limited when compared to YaST, SuSE's own operating system configuration tool. In terms of service and support, SCO pledged to field a set of escalation engineers that would only be handling SCO Linux issues.
The new Unix operating system releases then came out. UnixWare 7.1.3 was released in December 2002, which featured improved Java support, the Apache Web Server framework, and improvements to the previously developed Linux Kernel Personality for running Linux applications. In particular, the SCO Group stated that due to superior multiprocessor performance and reliability, Linux applications could run better on UnixWare via LKP than they could on native Linux itself, a stance that dated back to Santa Cruz Operation/Caldera International days. One review, that found UnixWare 7.1.3 lacking in a number of other respects, called LKP "the most impressive of UnixWare's capabilities". SCO OpenServer 5.0.7 was released in February 2003; the release emphasized enhanced hardware support, including new graphic, network and HBA device drivers, support for USB 2.0, improved and updated UDI support, and support for several new Intel and Intel-compatible processors.
The SCOx software framework was announced in April 2003; its aim was to enable the SCO developer and reseller community to be able to connect web services and web-based presentation layers to the over 4,000 different applications that ran small and midsize businesses and branch offices. The web services aspect of SCOx included bundled SOAP/XML support for the Java, C, C++, PHP, and Perl languages. A primary target of the SCOx framework was SCOBiz e-commerce integration, although other uses were possible as well. The planned SCOx architecture overall was composed of layers for e-business services, web services, SSL-based security, a mySCO reseller portal, hosting services, and a software development kit.
But by then, these software releases and e-commerce initiatives had become overshadowed by legal actions.