A Rose by Any Other Name--Is It Still the Same?

by Jeff Gerhardt

This article is the first in a series of on-site reports from GeoFORUM. I am not in a hurry to write these comments, as I feel the changes going on at this event need some thoughtful evaluation, not the typical knee-jerk reaction I normally might give (along with many others in the Linux community). Changes are generally good; they illustrate an action generated by an environmental pressure. Right now, the Linux community as a whole faces the onslaught of a series of environmental pressures. We can learn from the process Caldera is going through currently.

GeoFORUM, for those in the know, is attended by developers and sales engineers of small companies that represent the Caldera product line. It is an annual tech conference that grew out of the old Xenix and SCO UNIX development communities. As you might expect, the crowd here is a bit older than the one at your typical tech conference. This all goes back to some of my roots, as I did a fair amount of work in Xenix and OS-9 back in my Tandy days of the mid 80s. I was excited about going to this conference--for a change, I would not be one of the oldest guys at the conference.

This older crowd also is representative of a group of businesses that, in many cases, have been involved with this development community since the mid 1980s. Based upon an informal, anecdotal poll I took while walking around the hall, the average company attending the conference had been in business for eight or more years. Compare that with the average lifespan of a company attending a run-of-the-mill Linux event. In terms of understanding what is going on at the conference this year, this average age is an important fact to keep in mind.

I was a few minutes late to the opening keynote (breakfast was very good), so I did not make it to the special reserved press section at the front of the hall. Instead I sat with the crowd, and I am glad I did. I sat next to a guy named David Drew from a company called Net Plus Plus. This was his 16th consecutive year of attending the event; sixteen years of reasonably successful business results that have motivated him to continue to support the SCO group of products, now owned by Caldera.

Here is good reason for David to have that basic motivation. For the last 16 years he has had a group of products that were very well known for their stability and for being reasonably priced. He has made a good living as a participant in this community. So, the opening few minutes of the three-day conference were met with glee by David and the majority of the resellers/developers in that room. Their joy was readily apparent at the sudden announcement that Caldera had changed their name to The SCO Group.

When I first arrived at the conference on Sunday night for registration, I sort of felt something was up. There were rumors of a major announcement; rumors of a name change had been floated ever since the SCO purchase. However, I always envisioned a new umbrella name to cover both Caldera and SCO product groups. When I walked up to the registration table and saw the GeoFORUM logo but no company name printed on the signs, I sensed a change was imminent.

Monday, during his opening comments, new Caldera CEO and President Darl McBride announced the name change of the company from Caldera to The SCO Group in dramatic fashion. Using a high-tech multimedia show, the Caldera image was shattered into shards by the new SCO Group logo, which is pretty much the same as the old SCO logo.

So why did Caldera morph into The SCO Group? It's business folks, just business. Let's look at the facts, and let's start with the channel-oriented ones.

Caldera obtained their reseller channel by purchasing SCO. The size of that reseller channel is somewhere between 12,000 and 16,000, depending on how you quantify the reseller. These 14,000 (let's split the difference) resellers of Caldera/SCO products around the world were still selling SCO UNIX products in preference to Caldera Linux products. Why? Simple: they made more money and it was easier. Their existing client base had some two million SCO servers installed, and they were happy. Over the last year or so, Caldera has tried to kill the SCO product line and get the channel to sell Linux. But the channel was built upon a momentum of SCO UNIX and would not stop. Bottom line, the change was driven by the pressure created by the channel itself.

I originally thought it was a great move on Caldera's part to purchase SCO and create a new revenue branch. But the attempt to transition the SCO channel into a Linux channel was pushed too quickly. It should have been driven by customer demand, not marketing.

Now for the the simple financial facts. Say your company has no debt to speak of. You have a distribution channel of 14,000 SCO dealers. These dealers are on target to sell $60 million (US) for the year 2002. SCO products generate positive cash flow, while Linux products cost $2.00 of marketing for every $1.00 of sales. Maybe these facts are enough collectively to make you rethink your business plan.

I am as die-hard a Linux supporter as anyone on the planet. But, I see complete business sense in this move to change the name to The SCO Group. It is not rocket science, folks; it's marketing 101. The simpler the message, the easier it will be understood by potential clients, and multiple product brands are harder to market than a single brand.

Does the name change mean that Caldera, I mean The SCO Group, is no longer a Linux company? That remains to be seen. And I'm not so sure it matters in the short term. Their customers and their channel wanted SCO, not Linux. Sorry, but those are the facts.

Is the Caldera name really dead? Probably not. I have a quote from a SCO Group executive, who asked to remain anonymous, that "if and when we do launch a new Linux desktop, it very well may have the Caldera name on it."

Tonight's episode of The Linux Show will feature Opinder Bawa, the new senior VP of technology from Caldera/The SCO Group, to discuss the announcement.

Jeff Gerhardt is the host of The Linux Show.

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