The continental plates have shifted once again over at Santa Cruz Operation Inc, leaving Alok Mohan high and dry as chairman while co-founder and CTO Doug Michels takes over the reins as president and CEO. Mohan is said to be tired of commuting back East to see family – he was brought to California SCO as CFO from NCR Corp in 1994 – and is to focus on developing new business opportunities and directing merger and acquisition strategy. But in a clear indication of the new management’s feeling, EVP and head of sales Dave McCrabb said the company’s finances – it yesterday reported shrinking revenue for its second quarter – are still nowhere near where it wants them to be. We can’t remember the last time SCO’s share price climbed much above $7 and it remains down at $4 and change. McCrabb said Michels, who remains chief technologist, will be surrounded by operation and execution guys lest anyone doubt his credentials for the role. The coup sees SVP and general manager of the Americas, Ed Adams out after five years while McCrabb is promoted to run a worldwide sales group. Ray Anderson is now SVP for all corporate and product marketing, while SVP and European boss Geoff Seabrook becomes SVP corporate development. McCrabb says he doesn’t know whether he’ll be looking for a new European boss as that part of the company is seen as one of its malaises. Jim Wilt gets to head product development as SVP products. Michels’ other reports are CFO John Luhtala; SVP corporate affairs Steve Sabbath; and SVP human resources Jack Moyer. SCO did not record an annual profit while Mohan was at the helm and his position as head of a public company operating under this constraint had become to look untenable. SCO earned $18.4m on $184.1m sales in 1994 and lost $15.2m on revenue of $193.7m in 1997. Nevertheless Mohan helped negotiate the acquisition of Unix from Novell Inc on which the future of the company now largely depends. As Intel transitions to a 64-bit IA-64 architecture over the next couple of years, SCO is seeking to maintain its position as the leading supplier of 32-bit Unix to the Intel market and carry its lead forward, by developing enterprise functions, for the 64-bit sector. It recently won investment from Compaq, ICL, Unisys, Intel and Data General for that effort but faces competition from Sun, DEC/Tandem/Sequent, Hewlett-Packard and Silicon Graphics. Following a reorganization last year which saw the company shed 10% of its workforce and change CFOs, expenses have been reduced and gross margins have improved somewhat. As a consequence SCO yesterday reported second quarter net income up 229% at $3.3m compared with $0.97m last time on revenue which declined 6.5% to $50.54m from $54.08m. Novell holds 16.9% of SCO, Microsoft has 11.7%, Doug Michels has 11.2% and his father and co-founder Larry Michels has 8.7%.
