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February 9, 1994

SANTA CRUZ OPERATION PLANS SERVER SPREE, SETS PROGRAMME TO TARGET NOVELL’s NATURAL CUSTOMERS

By CBR Staff Writer

Keen to distance itself from the gamut of rival Unix-on-iAPX-86 pretenders – and its own recent troubles too the Santa Cruz Operation Inc, which still has by far the majority of Unix operating system installations on Intel Corp iAPX-86 computers, has set out its stall for a new generation of packaged system software products which it hopes will fulfil specific distributed information requirements rather than general open systems goals. It envisages, for example, giving businesses access to the so-called information superhighway now enthusiastically promoted by the Clinton Administration, supplying data collection servers for mobile computing users and developing integrated systems tailored for downsizers that want to run particular database applications. For example, Santa Cruz believes that while many large organisations, government and education providers are already experienced users of the Internet- and Unix-based information superhighway, there will be a growing demand for ramps on to the system from conventional businesses that want to exploit it. Moreover, recognising what it now believes is the dominant desktop system in the general business community, Santa Cruz says it will make these – and in fact all of its system software products – Windows-friendly offerings, grafting a philosophy and technologies developed by its IXI Ltd interface subsidiary. With one eye looking at a future role for itself in the increasingly competitive Unix-on-Intel market, and another eye on Novell Inc product plans, Santa Cruz intends to market this integrated system software at users who would be natural customers for NetWare.

Winner becomes clear

Indeed, the Santa Cruz, California-based firm sees NetWare, not UnixWare, Solaris x86 or NT as the main threat to its business. It believes that with a combination of general-purpose Unix, LAN Manager for Unix networking and other integrated components like a replication server, tightly-integrated licence management, electronic mail and more it can deliver in a single system functionality that would requires several NetWare servers assigned to different tasks. Although it says it already has many of the technologies and skills it needs to address its anticipated markets, Santa Cruz says it has never before integrated, packaged and marketed them as it now intends to do. It will buy or make additional technology where required. How these new offerings will be marketed hasn’t yet been decided, according to company officials, who tested plans at a Wall Street technology investors conference last week. They may ship as a new tier of products or as an expansion of the current range. Santa Cruz will continue to offer a basic range of general-purpose Unix servers which it now sells as the Open Server series – albeit with new Windows-friendly packaging – and although it is not writing off its desktop strategy, or indeed the Common Desktop Environment Unix front-end it is co-developing with its COSE partners, it will nevertheless concentrate efforts on the server side of its business, now some 80% and a rising share of revenues. The measure of Santa Cruz’s intent is perhaps evident in its declaration that it should not be regarded as a Unix company but as a server company, and that it now views open systems as a means to an end rather than an end in itself. The company is readying a new release of its Open Server and Open Desktop products – now on a third revision internally – and says it will pick up an object-based application environment, but only when a winner becomes clear. In addition, the company wants more Windows integration with Unix technologies and is looking at developing or buying things like Open Data Base Connectivity and Object Linking & Embedding layers, possibly through IXI. Santa Cruz, which gets its Unix via the licence arrangement that 14.2% shareholder Microsoft Corp has with Novell Inc, says it won’t be re-negotiating or upgrading those licence terms. And, although it says the Santa Cruz Unix code now includes less than an estimated 2% of Novell source, it says

the probable litigation cost of terminating the licence even if that figure were to reach anything like 0%, make that option a non-starter. And, given the royalty payments it is making, it says there would also be no financial gain for negotiating a buyout of the licence from Novell as SunSoft Inc plans to do.

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