SCO CEO Details Project Diamond

As SCO Forum 2004 kicked off on Monday in Las Vegas, SCO CEO Darl McBride spoke with Senior Writer Paula Rooney about the state of the company's Unix channel and products including an update on Project Legend and future plans for a super SCO Unix code named Diamond. McBride was also asked to share his thoughts on the Linux channel and ongoing litigation with IBM as LinuxWorld Expo gets under way in San Francisco. LinuxWorld Expo officially kicks off Aug. 2, the last day of SCO Forum 2004.

CRN: Everyone is wondering if SCO deliberately scheduled SCO Forum 2004 to overlap with LinuxWorld Expo, or vice versa. What do you say?

McBride: [He laughs] We didn't know there was a conflict. The reservations were made down here and after we found out, we figured we're starting a day or two earlier than [LinuxWorld Expo]. But we didn't plan it that way. It's coincidental.

CRN: What's the point SCO is trying to drive home to Unix customers and partners at this year's SCO Forum?

McBride: The theme is 25 years of SCO Unix. Two years ago we changed the name back to SCO from Caldera and got a standing ovation because we were supporting what our partners were selling. Last year we told them we'd protect their IP (intellectual property). This year it's that we're back in the game as far as developing products. This year and over next year will be the biggest rollout of products in the company's history.

CRN: Seems to be quiet on the Western front at the moment, in terms of litigation over Linux.

McBride: We didn't want a fight with Linux and we didn't start it. We're about a year and a half into this thing, and we feel strongly we'll win this thing. Big Blue has big problems, and the trial will begin Nov. 1, 2005. But in terms of this conference, we announced we recently shipped the UnixWare update and we have OpenServer [Unix on Intel] Developer preview and other products on the way. It's a quiet show and boring [perhaps for the media] in a good way. It shows we're committed to Unix and we're not just a litigation shop. I've seen litigation shops and that's not us. We had investors come in and try to turn us into that but we said no.

CRN: SCO once boasted it had 16,000 resellers. How many active resellers does SCO have now?

McBride: We pared down the list to 11,000 or 12,000. Between 5,000 to 6,000 [partners] buy something from us each quarter, but it's not static. It's still a good level of activity many companies would be envious of. UnixWare still represents the bulk of revenue from server sales and then a small percentage from services and a small amount from SCOsource licensing.

CRN: Speaking of which, has SCO signed any new SCO source licenses in the last quarter?

McBride: There will be guidance on our earnings call at the end of the month. We said before we expected revenue stream to be in the six figures, and we're not deviating from that guidance. Last quarter the number was $11,000. We continue to have people signing up.

CRN: What do you tell your resellers about pushing Project Legend, the OpenServer upgrade now expected to ship in the first quarter of 2005?

McBride: Our guys are working on incentives and marketing ideas to get the channel to upgrade customers to Legend. Legend will give more performance and capabilities than the older version.

CRN: What advice do you give to resellers further out?

McBride: We came up with Project Diamond, which is a coming together of OpenServer and UnixWare scheduled to come out in 2006. This is a major upgrade important for SCO's ecosystem going forward. Project Legend is the first step [toward uniting the Unix and Unix on Intel operating systems], but there are still two operating systems. There will be only one when Diamond comes out, and we'll take 64-bit and major capabilities we developed with Monterey and add other Web-based tools to make Diamond the Internet operating system of choice.

CRN: SCO introduced at SCO Forum this week SCO Office Server 4.1. What is your target audience here?

McBride: It's for SMB and branch offices. We have big clients like McDonald's, Kmart and Pizza Huts that will be targets because they operate like an SMB and have many small offices and branch offices.

CRN: What do you think of the Linux services model compared to the SCO's channel model and that of Unix and Windows?

McBride: We're not trying to grind money out of reseller but share it with them. It's well known that people have to gear up if they want to install Linux. IBM loves this for their IBM Global Services. Linux requires services, but the question is, will the Linux services market get gobbled up by big vendors like IBM or is there a part where the channel guys can make money on it? I think IBM will do everything they can to get IGS guys out there doing the services work. I don't think Linux is very channel-friendly for [a few] reasons--[for one,] its list price. They're not reselling the products, and Linux vendors have maintenance agreements, but they're not giving the channel a big cut of that. On the services and support side, either Linux [distribution] vendors or big vendors are coming in, so from a channel perspective, no matter what lens you look through, it's not very channel-friendly. When we talk to OEMs that sell Linux and UnixWare, they say with UnixWare, you don't have to have a lot of support and with Linux, you need lots of support.

CRN: What would you like to say to Linux ISVs and partners attending LinuxWorld Expo this week?

McBride: We got into a very big battle because of things IBM has done over the years. We have questions about what happened subsequently with Linux, and we have claims before the court, and we'd encourage people to take a look at our claims with an open mind. We think the tide of public perception against us will turn if they look at the filings and once more information comes out.