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March 22, 1996

SANTA CRUZ OPERATION DRAWS FIRE FROM USERS IN USENET GROUPS AS MOVES TO USER-BASED PRICING FOR UNIXWARE 2.1

By CBR Staff Writer

Santa Cruz Operation Inc has been getting slammed in Usenet groups since it SCO-zied the pricing of UnixWare 2.1 by introducing user-based price bands. In its defense the company says that the new pricing actually reflects the lowering of some of the Santa Cruz OpenServer 5 prices and that for systems of 15 users or less, the prices for UnixWare 2.1 Application Server are comparable or less than Novell Inc’s UnixWare 2.01 pricing. For example, the price for the entry-level five-user server is reduced about 22% to $1,790 ($1,295 plus $495 for a 10-user license). Above that band however, UnixWare licenses are now considerably more expensive. A new unlimited user license to UnixWare 2.1 will cost $13,000. Santa Cruz says this is comparable to thousand-user costs for competing products – much less than NT and AIX; similar to HP-UX. (An unlimited HP-UX server license is $13,000). An old unlimited-user license will continue to service unlimited users when it is upgraded – a practice known as ‘grandfathering’. In other words, users pay $550 for an upgrade to Santa Cruz UnixWare 2.1 AS from an unlimited license under older UnixWare (1.0, 1.1, 2.0x) and they will keep the unlimited license. The existing Santa Cruz OpenServer licenses for 1,000 and 5,000 users have been eliminated and replaced with the same unlimited license. At the other end of the scale, UnixWare 2.1 Personal Edition is raised about 40%, but is $100 less that the Santa Cruz OpenServer Desktop System Release 5. Although raising the price of the PE was regrettable, it was necessary given the projected unit shipments, cost-of-goods, cost-of-distribution and other related expenses, Santa Cruz says. The firm believes that the operating system provides commensurate value to the level of hardware used to deploy larger servers. The re-pricing represents what we hope is a fair balance between competitiveness with return-on- investment for ourselves, our partners and customers. We believe that Santa Cruz UnixWare 2.1 provides excellent value for the prices being charged and that it was essential that both OpenServer 5 and UnixWare 2.1 be priced similarly. Santa Cruz is in the process of assuming greater responsibility and to have a greater impact on the Unix community as a whole. Part of that growth and success is assessing which battle we can and can’t win and deploying our resources appropriately.

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