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February 15, 1989


By CBR Staff Writer

Microsoft Corp, which effectively handed its Xenix low-end variant of Unix to the Santa Cruz Operation Inc a couple of years ago, has bought back into the Unix business by taking a substantial minority stake in the company from the eponymous California township. No terms were disclosed, but privately-held Santa Cruz has reportedly doubled in size in each of the past five years and is expected to be close to the $100m sales mark this year. Last year, Santa Cruz sold 100,000 copies of the Xenix variant of Unix System V and earlier releases, bringing its total installed base to 350,000 copies, and is expected to sell another 200,000 this year, according to the Wall Street Journal. The investment – which sounds as if Microsoft has taken at least 25% – enab les the Redmond, Washington company to hedge its bets on whether OS/2 will really turn out to be the high-end workstation wave of the future or whether Unix now has too big a head of steam behind it now to be pre-empt ed. Santa Cruz Operation certainly sees the Unix bandwaggon gathering even more pace over the next few years – the company says it may eventually go public, but not until the public understands the role of Unix better. So when it found that it needed additional cash to finance its breakneck growth rate, it and Microsoft found a common interest. The move also shows that Micro soft, beginning to pull away from its micro software rivals, remains as hungry as ever.

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