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Some Caldera 2001-2002 SEC Filings - The Caldera-Tarantella Deal - 2 Updates |
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Tuesday, July 26 2005 @ 06:42 AM EDT
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When the SCO Group filed its Complaint (and then later its Second Amended Complaint, which is their final one, the one that matters), it filed as Caldera Systems, Inc. That's because that is who they were. In the Complaint, however, it wrote about the history of its dispute with IBM using the voice of oldSCO, the Santa Cruz Operation, later known as Tarantella. It goes on and on about its research and development of Unix products, its entering into the Project Monterey deal with IBM, and the wonders of Unix, as if it were not Caldera, but oldSCO, the company that did all those things. Santa Cruz Operation continues to exist as Tarantella and in fact Sun Microsystems just acquired it on July 13, 2005, and so it is now a division of Sun Microsystems. The SCO Group is not oldSCO. It bought software divisions from Tarantella, but it didn't acquire Tarantella, as Sun's later acquisition demonstrates. The SCO Group is just the new name for Caldera, what they decided to call themselves, and that didn't happen until after the IBM lawsuit was launched. You can see that by looking at the header in the original Complaint, which was filed as Caldera Systems, Inc. v. IBM, not SCO Group v. IBM. Later, after Caldera changed its name, it changed the title of the case to SCO v. IBM. Not being the Santa Cruz Operation, oldSCO, or Tarantella, Caldera was not a party to the Project Monterey agreement. It was oldSCO that was, which is why today's The SCO Group would like to be viewed as standing in their shoes for purposes of the litigation. If anyone had a contractual beef with IBM, it was oldSCO, not Caldera, because it was the Santa Cruz Operation that entered into the contract with IBM to do Project Monterey.
Caldera was a Linux company, which in May of 2001 purchased Unix products and services divisions from Tarantella and then began morphing first into a Linux and Unix company and finally into a Unix company as it is known today. Well. Some of us view them as a litigation company. So when reading the Complaint, one is really required to suspend reality and listen to them talk about Linux being their competition back then, and how IBM did the most awful thing by helping Linux become a product suitable for business, something it otherwise could not have done, at least not so quickly.
Linux was not a competitor to that company. Caldera, in the words of Bryan Sparks, who founded the first iteration of Caldera in 1994, was "the first company to invest heavily in the establishment of Linux as an acceptable business solution."
Sparks was founder and CEO of both Caldera, Inc., the company which brought suit against Microsoft over DR DOS, and then Lineo, Inc., which was spun off from Caldera, and now he's with Solera Networks. Yes, that Solera Networks. Caldera, Inc. was founded by Sparks as a start-up venture funded by The Canopy Group. Yes, that Canopy Group. As you will see, MTI was also an investor. Yes, that MTI. Caldera Systems, Inc. was the iteration that Ransom Love was the President and CEO of, and then when the Tarantella deal happened, they formed Caldera International, Inc., and Caldera Systems became a subsidiary. The quotation is from a 1999 Caldera press release, and it continues: "Five years after forming Caldera, we are now launching Lineo for the purpose of defining the commercial embedded Linux marketplace and obtaining wide market implementation of this incredible operating system environment in compact devices worldwide."
"OEMs see the benefit of embedding Linux into their devices and have requested an embedded OpenLinux solution," said Ransom Love, President and CEO of Caldera Systems, Inc. "Embedix will define the embedded Linux market as OpenLinux has defined the Linux for business market."
In just four weeks, at Linux World, the industry's largest Linux-focused trade show, Lineo will be announcing a partnership with the world's leading provider of embedded computing technology and will be detailing the first broad market Linux-based embedded devices.
Lineo is calling its embedded Linux platform Embedix, which is based upon OpenLinux -- Caldera Systems' successful boxed Linux product targeted at desktops, servers and high-availability solutions. Embedix is a specially configured Linux platform designed to meet the strict memory, storage and performance requirements of embedded systems. Lineo has already developed and sold Embedix-based solutions to a select group of OEMs. Lineo's embedded Linux development environment, code named "Hurricane", includes the complete set of OpenLinux technologies paired with special tools for producing software for embedded systems.
All of this is background for some older Caldera SEC filings I've been looking through, and what simply leaps off the page is that when Caldera/nowSCO told the court that Linux was a hobbyist platform until IBM started to meddle and that it never would have been a competitive threat as quickly as it did, they were pretending to the court that they were always a Unix business, speaking not as Caldera, but as if they were oldSCO/Tarantella. Whatever were they thinking? Linux wasn't their competition back then. They were a Linux company, the first to push Linux in the enterprise, at the very time that IBM got interested in Linux.
The SEC filings couldn't be more clear that Caldera was a Linux company, first and foremost, and even after they bought the UNIX assets of oldSCO/thenTarantella in 2001, and even after Darl McBride's coming on board, for a while they continued to push Linux in the enterprise as well as Unix. IBM was a partner, and Linux was their business, not their competition. The stated dream back then was to get Unix and Linux to work together, to run Linux applications on Unix seamlessly. By 2003, their SEC filings describe them as a UNIX company and list Linux as their competition, but that isn't the way it was back in 2001 and earlier. They not only sold Linux to enterprise customers, I also note that they had an extensive education and training program for the business community for both Linux (any distribution) and later for their flavor of Unix. Is it credible that they could do that and never notice what was in Linux, specifically the blocks of code they claim IBM should not have donated and that they claimed in their complaint they never knowingly distributed under the GPL? I find that hard to believe, particularly when I note in 2001 filings that they were teaching using the 2.4+ Linux kernel. UPDATE: Groklaw member ff5166 found an article by Steven J. Vaughan-Nichols from August of 2000, shortly after the Caldera-Tarantella deal, that tells us that Caldera was cutting edge with that kernel, the first to release a "technology developer release preview" of Linux 2.4: As time goes on, you can expect to see the product lines start to merge as Caldera integrates the best features of Unix and Linux together. In the short term, you can expect to see a major revision to OpenServer; UnixWare gain the ability to run binary Linux applications; and, given that Caldera was the first to release a "technology developer release preview" (a.k.a. a late beta) of the soon to be arriving Linux kernel, Linux 2.4, one of the first Linux 2.4 releases. Now tell me how they didn't know what they were releasing under the GPL. Their complaint lists the summer of 2000 as the time period when IBM executives were talking about their contributions to Linux to improve its enterprise functionality. But Caldera at that same time, and later, was offering to build customized Linux operating systems for business customers. They taught them how to *administer* Linux, not just install it. They also offered Linux certification testing. One filing in January of 2002, their 10-K, the annual report for the fiscal year ended October 31, 2001, says, "Our Linux products, however, are
specifically suited for and targeted toward the requirements of
business." I think they had to know back then what was in there. And how can they claim that they didn't release all the code in Linux under the GPL, if they knew back then what was in there? Obviously, that will be a difficult sell. That 10K is also where we read about the acquisition of Unix from Tarantella. I found that after buying the UNIX assets from Tarantella, they didn't realize the money they anticipated. They list the reasons, one of them being "a weakening of partner relationships", which at first you might think could mean disappointment over IBM not going forward. However, the dates are clear. In the Complaint, it says IBM told oldSCO it was finished with Project Monterey on May 1, 2001. Caldera bought Tarantella's Unix assets on May 7, 2001. They surely can't complain that they didn't know, unless oldSCO/Tarantella didn't tell them. IBM had no duty to say anything to Caldera, I wouldn't think. But if Tarantella failed to mention it, that would be something else again. They also list what they got from Tarantella, and it's interesting to note that while they list trademarks in the category of intangible assets, they do not list copyrights. I have collected some excerpts from that 10K, filed on January 18, 2002, as well as some later filings in 2002, because they include important pieces of the puzzle that need to be in our permanent collection. There were quite a few exhibits attached, and if anyone is in Washington and can get hold of them, I'd find it interesting indeed to read them. There has been a great deal of focus on what SCO got from Novell, but the other important question is, what did Caldera get from Tarantella? It's been a missing piece. Some of these exhibits may fill in that gap. I've marked certain highlights in colored text, but you may notice other things I've missed. That's the advantage of many eyeballs. To compare what they said in these SEC filings with their Second Amended Complaint, here are a few snips to refresh your memory: 22. In the business computing environment for the Fortune 1000 and other large corporations (often called the “enterprise” environment), UNIX is widely used. As detailed below, before IBM's involvement in and improper contributions to Linux, Fortune 1000 companies were not using Linux for mission critical applications, such as wire transfers and satellite control systems. Linux, as an operating system, simply was incapable of performing such high level enterprise computing before IBM's improper contributions to Linux. . . .
36. Seeing this emerging trend, it became evident to SCO that Intel chips would gradually gain widespread acceptance for use in the enterprise marketplace.
37. Therefore, while other major UNIX vendors modified UNIX for their respective RISC-based computing platforms, SCO developed and licensed the UNIX-based operating system for Intel-based processors for enterprise use that is now known as “SCO OpenServer.”
38. SCO’s early engineers faced difficult design challenges in modifying UNIX for effective use on an Intel processing platform. The principal design constraint centered on the limited processing power the Intel chip possessed in the early 1980’s. The Intel chip (designed as it was for personal computers) was not nearly as powerful as the enterprise RISC chips used by IBM, Sun, SGI and others in their respective UNIX offerings.
39. Despite the early design constraint of Intel’s limited processing power, SCO was able to develop a version of UNIX for Intel PCs with full multi-processing and multi-user support as well as excellent reliability. A PC running SCO's OpenServer UNIX was a much more viable business application platform than the same PC running any available version of Windows. SCO found an appropriate enterprise market niche for the early versions of SCO OpenServer as a highly reliable platform for business critical applications such as point-of-sale control, inventory control and transactions processing. Intel systems running UNIX were fully capable of performing multi-user business applications and could do so at a much lower cost (and just as reliably) as the proprietary mini-computer hardware sold by other UNIX vendors, such as Sun and IBM.. . .
48. On or about September 19, 1995, The Santa Cruz Operation, Inc. acquired all right, title and interest in and to UNIX and UnixWare source code, the AT&T Software and Sublicensing Agreements, the copyrights, claims arising after the closing date against any party and all related and ancillary products and rights from Novell, excepting only the right to certain existing ongoing royalty payments which was retained by Novell.
49. From and after September 1995, SCO dedicated significant amounts of funding and a large number of UNIX software engineers, many of whom were original AT&T UNIX software engineers, to upgrade UnixWare for high-performance computing on Intel processors.
50. By approximately 1998, SCO had completed the majority of this task. That is to say, UnixWare had largely been modified, tested and "enterprise hardened" to use Intel-based processors in competition against IBM and Power PC chips, the Sun SPARC chip and all other high-performance computing UNIX platforms for all complex computing demands. The term "enterprise hardened" means to assure that a software product is fully capable of performing under the rigorous demands of enterprise use.
51. SCO was ready to offer large enterprise customers high-end UNIX computing platforms based on inexpensive Intel processors. Given the rapid growth of Intel's performance capabilities and Intel's popularity in the marketplace, SCO found itself in a highly desirable market position. . . .
56. By about May 2001, all technical aspects of Project Monterey had been substantially completed. The only remaining tasks of Project Monterey involved marketing and branding tasks to be performed substantially by IBM.
57. On or about May 2001, IBM notified plaintiff that it refused to proceed with Project Monterey, and that IBM considered Project Monterey to be “dead.” . . .
The Functional Limitations of Linux Before IBM’s Involvement
80. The first versions of Linux evolved through bits and pieces of various contributions by numerous software developers using single or dual processor computers. Unlike IBM, virtually none of these software developers and hobbyists had access to enterprise-scale equipment and testing facilities for Linux development. Without access to such equipment, facilities and knowledge of sophisticated development methods learned in many years of UNIX development it would be difficult, if not impossible, for the Linux development community to create a grade of Linux adequate for enterprise use.
81. Also, unlike IBM, the original Linux developers did not have access to multiprocessor code or multi-processor development methods needed to achieve high-end enterprise functionality.
82. To make Linux of necessary quality for use by enterprise customers, it needed to be re-designed and upgraded to accommodate complex multi-processor functionality that had taken UNIX nearly 20 years to achieve. This rapid re-design was not feasible or even possible at the enterprise level without (a) a high degree of design coordination, (b) access to expensive and sophisticated design and testing equipment; (c) access to UNIX code and development methods; (d) UNIX architectural experience; and (e) a very significant financial investment. The contributions of IBM, which had access to UNIX System V Protected Materials and years of enterprise level experience, made possible this rapid redesign of Linux for enterprise use.
That brings us to the next step in this saga, the sale of the Unix products by Tarantella to Caldera. Question: if oldSCO/Tarantella was doing so wonderfully, until IBM in May of 2001 pulled the plug, which is the story SCO tells in the Complaint, how come Caldera, a Linux startup that had yet to turn a profit was able to buy their Unix assets that exact same month and year? The deal was dated May 7, 2001. Let's take a look now at Caldera's SEC filing, their annual report regarding 2001 that they filed in January of 2002, note how little it matches the story told to the court, and you'll find out the rest of the story. There are other tidbits in there too that I thought you'd find interesting, like how many employees they had back then (400 in May of 2002, after some layoffs) and the name of the IPO shareholder lawsuit, E. Adams v. Caldera Systems, Inc., (Case # 01-CV-6271). And you'll note with interest that Caldera proudly lists its participation in the "IA64 Linux Project, an Intel-sponsored initiative to port the Linux kernel to the Intel Itanium processor." Later, as you can read in this article from June 13, 2002 in The Register, Caldera backed off from the project and from 64-bit Open Unix, but note the reason given by them back then was due to feedback from Intel and from their customers, not because of mean old IBM: As the legacy Unix variant, OpenServer was never likely to be ported to Itanium, but sizable investment has gone in to projects to develop a 64-bit version of Open Unix, both with IBM on the Monterey project and through SCO's Gemini project that created UnixWare 7, the predecessor to the current Open Unix 8. Feedback from Intel and customers, however, has led Caldera to the conclusion that there is enough life in the 32-bit market.
"The feedback from Intel and our customers is that 64-bit addressing today just isn't a priority, and the 32-bit processors are just getting better and better," said Caldera's VP EMEA, Chris Flynn. "32-bit is good enough for most people's processing requirements." That appears to suggest that Open Unix and OpenServer's lifespan will last only as long as 32-bit processors continue to sell, but Flynn maintained that the operating systems will remain available as long as customers want them.
"There's plenty of mileage in 32-bit Unix," he said. "Until our customers tell us that they don't want Unix and they don't want 32-bit Intel any more, which I don't see happening, then nothing's going to change. 32-bit is just great for customers over the next few years, but we do have choices, and we could move forward with our 64-bit projects."
One of those choices will be 64-bit Linux, which is being developed through the IA-64 Linux Project, and will be available from Caldera. Flynn believes that by the time users are looking to purchase 64-bit servers and operating systems in volume, Linux will have gained the robustness and scalability it requires to compete with Unix in the enterprise market.
Another option Caldera has on the shelf is IBM's AIX 5L, which was developed from the Monterey project between IBM and SCO. In 2001, Caldera offered a preview of the AIX 5L operating system for Itanium to developers, and it remains a possibility that Caldera will offer IBM's Unix for 64-bit users should there be the demand. 2d Update: Here are some of the contracts and agreements in the Tarantella deal: Caldera Systems, Inc./Caldera Holding, Inc./Santa Cruz Operation, Inc. Agreement and Plan of Reorganization dated August 1, 2000, in SEC filing; see also here and here on Groklaw and on Findlaw. Here's a version with the three amendments attached, one in September of 2000, and one in December of 2000, and one February of 2001. Here's just the Third Amendment dated February 9, 2001. Voting Agreement between Doug Michels, as shareholder, and Caldera and the new Caldera Holding Company.
I've also placed them in the permanent Contracts page. I've also found a Caldera International 5/16/2001 SEC filing, a 13D with exhibits attached, including stockholder agreement, secured promissory note, form of security agreement, and escrow agreement.
With that background, take a look at Caldera's SEC self-portrait from 2001-2002:
********************************************************
From the Caldera International, Inc.'s 10-K, the annual report for the fiscal year ended October 31, 2001:
The Linux for eBusiness solution must be able to
accommodate business applications and be able to interoperate properly
with
the diverse environment of internal corporate information systems and
the
internet. It must have the flexibility to be maintained centrally or
managed
remotely. Finally, a solution must adhere and conform to commercial
standards
to incorporate the latest technological advancement and ensure wide
acceptance.
The UNIX(TM) operating system complements Linux and addresses many
of
the drawbacks noted above for Linux. UNIX, the precursor to Linux, has
had a
long history of business implementation, and has attracted a robust list
of
both customers and vendors that provide solutions. Sun, Hewlett Packard,
IBM,
Tarantella (formerly The Santa Cruz Operation) and others have developed
a
large base of UNIX business applications to conduct internet and local
transactions. On the Intel platform, Caldera's OpenServer and OpenUNIX
represent the only tangible low cost Intel UNIX available for business
(HP
and Sun being the only other providers), and these offerings have
permitted
businesses, particularly small to medium businesses, to take advantage
of the
reliability of this operating system at a relatively low cost.
In comparison to Linux, UNIX has had almost a 20-year advantage in
deployment. However, Linux is already overtaking UNIX in the growth and
development of new software as Linux is increasingly viewed as an
internet-friendly operating system that excels in price and quality and
is
seen as an alternative development platform. Caldera's efforts to unify
Linux
and UNIX provides the business customer the ideal option of developing a
single application that can now scale from the smallest device to the
most
comprehensive operating environment available on Intel. . . .
The Caldera Solution
Caldera provides operating systems and web-enabled software products
that enable solution providers servicing small to medium businesses to
build
reliable, replicatable solutions. These solutions are built on the Linux
and
UNIX operating systems, and are delivered through a global channel of
resellers. Key benefits of our solution include:
FOCUSED BUSINESS FRAMEWORK. Caldera has always had a business focus
with Linux, and now with UNIX, and has created a system that fosters
product
development, deployment, management, support, and services for business
clients. . . .
COMPREHENSIVE, DISTRIBUTION-NEUTRAL EDUCATION AND TRAINING. Many
companies are delivering different versions of Linux called
distributions. We
provide a comprehensive distribution-neutral training program for Linux
and
for Caldera's UNIX. Our courses focus on educating and training the
business
community on the benefits of these operating systems for business use.
We
offer a comprehensive set of courses designed to prepare students to
develop,
deploy and manage Linux and UNIX in a business environment, including
system,
network and internet administration and programming. We offer
high-quality
instructor-led training through our own training center at our
headquarters
and also offer our educational programs indirectly through our Caldera
Open
Learning Providers around the world.
OPEN SOURCE ADVOCATE. We fully embrace the open source model and
continuously contribute tools and technology to the open source
community to
the betterment of our products. We foster, and regularly contribute to,
multiple open source development projects that enhance the capability of
our
products and services. These efforts serve to collaboratively enhance
the
capability and quality of the technology to foster greater market
growth. . . .
OPENLINUX
OpenLinux is an ideal product for building internet-enabled
business
solutions. Based on the Linux 2.4 kernel, the product is a fully
integrated
and stable Linux operating system. . . .
PROFESSIONAL CONSULTING AND CUSTOM DEVELOPMENT SERVICES
Our UNIX and Linux consulting services include project management,
software development and programming, migration tools and services, and
development of customized Linux operating systems. We assist our
end-user
customers, ISVs and solution providers in planning, creating,
implementing
and deploying business application solutions.
EDUCATION AND TRAINING SERVICES
Our educational programs and products are designed to help our
customers learn to develop, deploy and administer both Linux and UNIX
operating environments for Intel systems. Our courses provide
preparation for
UNIX and Linux certification. Linux certification tests are provided by
an
independent organization named "The Linux Professional Institute".
Caldera develops comprehensive training curriculum for both UNIX
and
Linux. Caldera has a program to authorize independent training centers
around
the world, named the Caldera Open Learning Provider program. Authorized
Open
Learning Providers use the Caldera supplied UNIX and Linux curriculum to
customize and deliver instructor led training classes. . . .
Our Linux products, however, are
specifically suited for and targeted toward the requirements of
business. . . .
SOFTWARE ENGINEERING AND DEVELOPMENT
The acquisition of the server and professional services divisions
from
Tarantella increased both the size and breadth of skill in Caldera's
engineering
group to support Caldera's existing Linux and Volution products in
addition to
the UNIX products. Our engineering team is highly regarded in our
industry as
having some of the most talented individuals in delivering trusted
computing
technology, specifically for Intel-architecture systems. These skills
have been
put to good use in the delivery of our latest products as well as a
number of
professional services engagements with Intel and others. . . .
Our delivery of Open UNIX 8.0 with the Linux Kernel Personality was a
milestone in the Intel UNIX world as it established a bridge between the
well
established UNIX environment and the new world of Linux by creating an
environment on which Linux applications can run unchanged on UNIX. A key proof point for this capability was established
when
the Linux version on Oracle's 9i database was fully certified on Open
UNIX 8.
This capability ultimately allows our customers to run the same
applications
on either Linux or UNIX and provides a means to support Linux
applications on
much larger hardware platforms, such as the UNISYS ES7000 with 32 Intel
Pentium Xeon CPUs, than the Linux operating system can effectively
support
today. Looking forward, we will leverage our UNIX expertise to
collaborate
with our partners and the Linux community to attain similar capability
as
demand for Linux on the next generation Itanium processor increases. .
. .
Certain components of OpenLinux have been developed and made available
for
licensing under the GNU General Public License and similar licenses,
which
generally allow any person or organization to copy, modify and
distribute the
software. The only restriction is that any resulting or derivative work
must be
made available to the public under the same terms.
We own the registered trademark "CALDERA(R)" and also have license
rights
relating to "CALDERA SYSTEMS(TM)", a pending trademark application. In
September
1999, the United States Patent and Trademark Office rejected our
applications
for "OpenLinux(TM)" and "Linux for Business(TM)". We filed our response
with
respect to the rejection of the "OpenLinux" trademark on March 28, 2000.
Our
trademark application for "Linux for Business" was suspended on April
24, 2000,
pending disposition of prior applications. We have recently been
informed that
resolution of these applications will remain pending until a
determination has
been made by the United States Patent and Trademark Office as to the
treatment
of LINUX related trademark applications generally. In Europe, the
European
Community Trade Marks Office has approved our application for
registration of
the trademark "OpenLinux(TM)".
. . . .
EMPLOYEES
As of October 31, 2001, we had a total of 545 employees. Of the
total
employees, 146 were in software engineering, 117 in sales, 58 in
marketing, 87
in customer service and technical support, 34 in customer delivery, and
103 in
administration. . . .
RISK FACTORS
Our business model is based on an expectation that we
can create and develop demand from the corporate community for product
and
service offerings, which will include both UNIX and Linux products and
services,. . . .
As a result of the registration that occurred in
connection with the Tarantella transaction, we have a large number of
shares of
common stock outstanding and available for resale. This also might make
it more
difficult for us to sell equity securities in the future at a time and
at a
price that we deem appropriate. Certain holders of our common stock also
have
certain demand and
piggyback registration rights obligating us to register their shares
under
the Securities Act for sale, including the rights held by the selling
stockholders.
...
ITEM 3. LEGAL PROCEEDINGS
In July 2001, Caldera and certain of its officers and directors
were named
as defendants in lawsuits filed in the United States District Court for
the
Southern District of New York (the "Actions"). The first lawsuit was
filed on
July 11, 2001, and entitled E. Adams v. Caldera Systems, Inc. (Case #
01-CV-6271). Based on comments made in open court by attorneys
representing
certain plaintiffs, over two hundred similar cases have been filed
against other
issuers. The Court has indicated that it is in the process of
considering a
consolidation of the Actions. Certain of the plaintiffs have sought
appointment
as a lead plaintiff with approval of their respective law firms as lead
plaintiffs' counsel. The various complaints allege claims against
Caldera,
certain of our officers and directors, and the underwriters of our
initial
public offering under the Securities Act of 1933, as amended. The
complaints
also allege claims solely against the underwriters under the Securities
Act of
1933 and the Securities Exchange Act of 1934, as amended. We believe
that the
claims against Caldera and any of its officers and directors are without
legal
merit and we intend to defend them vigorously. On August 8, 2001, all
pending
cases against all underwriters and issuers were reassigned to a U.S.
District
Court Judge, Southern District of New York. The time for Caldera to
answer or to
move to dismiss the complaint is presently adjourned pending further
instruction
from the court.
The Company is not aware of any improper conduct by the Company,
its
officers and directors, or its underwriters, and the Company denies any
liability relating thereto. The Company has notified its underwriters
and
insurance companies of the existence of the claims.
On September 17, 2001 Caldera was named as a defendant in a matter
entitled K. McCrabb v. Caldera Systems, Inc. (Case # CV801505), on
October 5,
2001 Caldera was named as a defendant in a matter entitled N. Maabadi v.
Caldera
Systems Inc. (Case # 802043), and on October 11, 2001 Caldera was named
as a
defendant in a matter entitled A. Milligan v. Caldera Systems, Inc.
(Case #
802190). All three lawsuits were filed by former employees in the
Superior Court
of California, County of Santa Clara, claiming breach of contract
regarding the
payment of bonuses and severance payments. All three matters are in
discovery
stage, and the ultimate outcomes are not yet determinable. The Company
believes
that it has viable defenses in each of the three matters. . . .
As of October 31, 2001, Caldera had over 18,000 beneficial
stockholders.
Caldera has not declared or paid any cash dividends on shares of its
common
stock and plans to retain its future earnings, if any, to fund the
development
and growth of its business.
OVERVIEW
We began operations in 1994 as Caldera, Inc. In July 1996, through
an
asset purchase, Caldera, Inc. acquired an additional business unit that
was not
engaged in developing and marketing Linux software. Caldera, Inc.
subsequently
made the strategic determination to separate its two business lines into
separate entities and, under an Asset Purchase Agreement dated as of
September
1, 1998, as amended, sold the assets relating to its business of
developing and
marketing Linux software to Caldera Systems, Inc., a newly formed
corporation.
Caldera Systems subsequently completed an initial public offering in
March 2000.
On May 7, 2001, Caldera Systems completed its acquisition of the assets
and
operations of the server and professional services groups of Tarantella
Inc.,
formerly known as The Santa Cruz Operation, Inc., pursuant to an
Agreement and
Plan of Reorganization, dated August 1, 2000, as subsequently amended
(the
"Tarantella Acquisition"). In order to facilitate this acquisition,
Caldera
International, Inc. was formed and Caldera Systems became a wholly owned
subsidiary
of Caldera International. Former holders of shares and options to
purchase
shares of Caldera Systems received an equal number of shares and options
to
purchase shares in Caldera International. As used herein, Caldera, or
the
Company, refers to Caldera International, its subsidiaries, and its two
predecessors, Caldera Systems and the portion of Caldera, Inc. related
to the
Linux software business.
Prior to the acquisition of the UNIX and OpenServer product lines
from
Tarantella, substantially all of our revenue was derived from sales of
Linux
products and related services. Currently, over 90 percent of our revenue
is
derived from sales of products acquired from Tarantella.
RESEARCH AND DEVELOPMENT. Research and development expenses were $16.8
million in fiscal 2001, $5.0 million in fiscal 2000 and $2.3 million in
fiscal
1999 representing an increase of $11.8 million from fiscal 2000 to
fiscal 2001
and an increase of $2.7 million from fiscal 1999 to fiscal 2000.
Research and
development costs represented 41 percent of total revenue in fiscal
2001, 116
percent of total revenue in fiscal 2000 and 76 percent of total revenue
in
fiscal 1999. The increase in research and development expenses from
fiscal 2000
to fiscal 2001 was attributable to increased personnel and related costs
as a
result of the acquisitions of the WhatiIfLinux technology from Acrylis
and
operations from Tarantella as our personnel focused on the development
of Linux
and UNIX operating systems. The increase in research and development
expenses
from fiscal 1999 to fiscal 2000 was due to an increased investment in
the number
of software developers, quality assurance personnel and outside
contractors to
support the
Company's product development and testing activities including the
development of training courses and technical support offerings. . . .
WRITE-DOWN OF GOODWILL AND INTANGIBLES. During the fourth quarter of
fiscal 2001 we determined that various assets related to the operations
acquired
from Tarantella and Acrylis were impaired and that the book value as of
October
31, 2001 exceeded the current estimates of fair value. As a result, we
recorded
a $73.7 million write-down of goodwill and intangible assets. The asset
write-down is the result of significant unanticipated decreases in
actual and
forecasted revenue of the acquired operations, a significant decline in
market
valuations and general economic conditions, particularly in the
information
technology sector, a weakening of certain partner relationships, the
loss of
certain key executives and other factors. During fiscal 2000 and 1999
the
Company did not have any write-down of goodwill and intangible assets. .
..
WRITE-DOWN OF INVESTMENTS. During fiscal 2001, the Company determined
that
the current carrying value of certain of its investments would most
likely not
be realized and write-downs were necessary. The Company recorded
write-downs of
approximately $8.3 million related to these investments. The Company did
not
have any impairment charges during fiscal 2000 or fiscal 1999. As of
October 31,
2001, the Company's remaining investment balance was approximately $1.2
million
and was related to Lineo, Inc. During fiscal 2000 and 1999 the Company
did not
record any write-down of its investments.
At the time of the acquisition, Tarantella had invested
approximately 76 man-months of effort (or approximately $0.8 million) in
the
UNIXWare 8 product and anticipated 122 man-months of effort (or
approximately
$1.2 million) to complete UNIXWare 8. UNIXWare 8 was estimated to be
approximately 38 percent complete at the time of the acquisition.
The Messaging Server product is an entirely new product, which
provides
messaging functionality on top of existing UNIXWare products. At the
time of the
acquisition, Tarantella had invested approximately 36 man-months of
effort (or
approximately $0.4 million) in the Messaging Server product and
anticipated 12
man-months of effort (or $0.1 million) to complete Messaging Server.
Messaging
Server was estimated to be approximately 75 percent complete at the time
of the
acquisition.
. . . .
COST-SHARING ARRANGEMENT WITH TARANTELLA, INC. During August 2000 and
after entering into the reorganization agreement with Tarantella to
acquire the
server software and professional services groups, the Company and
Tarantella
agreed that Caldera would reimburse Tarantella for certain employee
payroll and
related costs. The costs for which the Company agreed to reimburse
Tarantella
were related to employees that Tarantella had identified for termination
in a
company-wide layoff in September 2000. The Company viewed these
employees as a
critical part of the success of the new combined company and Tarantella
agreed
to retain the employees if the Company would reimburse Tarantella for a
portion
of their payroll and related costs. At the time the Company committed to
reimburse Tarantella for these employee costs, the ultimate amount was
not
determinable and both parties agreed that the amount would be determined
prior
to the completion of the acquisition. During December 2000, both parties
agreed,
pursuant to an amendment to the reorganization agreement, that Caldera
would
reimburse Tarantella $1.5 million relating to services rendered from
August
though December 2000. Accordingly, during fiscal 2001 and fiscal 2000
the
Company recorded $0.6 million and $0.9 million, respectively, for the
cost-sharing arrangement. . . .
Investing activities have historically consisted of purchases of
property
and equipment, investments in strategic partners as well as a $15.0
million
payment during fiscal 1999 to our predecessor, in connection with the
reorganization of our predecessor and Caldera's own incorporation. Cash
provided
by investing activities was $23.2 million during fiscal 2001. This
consisted of
$23.0 million paid, net of cash acquired, for the assets and operations
from
Tarantella and the WhatIfLinux technology from Acrylis as well as $1.5
million
paid for the purchase of equipment. . . .
Additionally, during the year ended
October 31, 2000, Caldera invested $2.0 million in the common stock of
Evergreen
Internet, Inc., a strategic partner, paid $3.0 million to Ebiz
Enterprises,
Inc. for 3.0 million shares of common stock and paid $1.4 million for
property and equipment. Caldera also received $15.0 million from the
sale of
2.0 million shares of Lineo common stock. . . .
During fiscal
1999, cash provided by financing activities consisted primarily of $15.5
million
of equity funding received from The Canopy Group and $3.0 million of
equity
funding from MTI Technology Corporation. Additionally, Caldera received
$4.8
million from The Canopy Group under a secured convertible promissory
note
agreement that accrued interest at the prime rate less one-half percent
that was
calculated at 7.25 percent. . . .
As of October 31, 2001, the Company had one outstanding non-interest
bearing debt obligation with a face amount of $8.0 million to
Tarantella. This
note is payable in four quarterly installments starting in the Company's
third
quarter of fiscal 2002. As of October 31, 2000, the Company had no
outstanding
debt obligations.
. . . .
Issuance of common shares for cash in an initial
public offering at $14.00 per share, net . . .
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash payment to Caldera, Inc. in asset acquisition
- - (14,964)
. . . .
Issuance of common shares in exchange for investment in Lineo, Inc.
$ - $ 10,000 $ -
Distribution to majority stockholder for fair value of shares
issued in
excess of the carryover basis of the investment in Lineo, Inc.
$ - $ (10,000) $ -
Distribution to majority stockholder for license rights
$ - $ (451) $ -
Contribution of additional shares of Lineo, Inc. from majority
stockholder $ - $ 1,966 $ -
. . . .
The acquired operations of Tarantella provide server software for
networked business computing and are a leading producer of UNIX server
operating
systems. In addition, these operations provide professional services to
implement and maintain UNIX system software products. The acquisition
provided
Caldera with international offices and a Linux/UNIX distribution channel
with
thousands of resellers worldwide. . . .
Subsequent to the acquisition of certain assets and operations from
Tarantella (see Note 3), the Company has experienced significant
unanticipated decreases in actual and forecasted revenue of the acquired
operations, a significant decline in market valuations and general
conditions, particularly in the information technology sector, a
weakening of
partner relationships, the loss of certain key executives and other
factors
which indicate the recorded values of the long-lived assets were
impaired. As
a result, the Company performed a valuation of its long-lived assets as
of
October 31, 2001 and concluded that a $73.7 million write-down of
goodwill
and intangible assets was necessary. . . .
(3) ACQUISITIONS
TARANTELLA, INC.
On May 7, 2001, the Company acquired certain assets, liabilities
and
operations from Tarantella, Inc in exchange for: (i) the issuance of 16
million shares of common stock (1.6 million of which are being held in
escrow
for a one-year period); (ii) the issuance of options to purchase
up to an aggregate of 1.7 million shares of Caldera common stock in
exchange
for options to purchase Tarantella common stock previously held by
individuals who became employees of Caldera; (iii) $23 million in cash,
including the forgiveness of $7 million previously advanced to
Tarantella;
and (iv) a non-interest bearing promissory note in the amount of $8
million
that will be paid in quarterly installments of $2 million beginning July
2002. In addition, if the OpenServer line of business generates revenue
in
excess of specified thresholds during the three-year period following
the
acquisition, Caldera will pay Tarantella 45% of such excess revenue. The
following table summarizes the components of the consideration paid to
Tarantella (in thousands, except per share data):
Consideration paid:
Fair value of Caldera common stock (16,000 shares at $3.47 per share)
$ 55,520
Fair value of options to purchase 1,661 shares of common stock issued
in exchange
for 3,323 outstanding Tarantella options
4,201
Cash
23,000
Note payable (discounted at 6.5%)
7,322
Direct expenses
3,744
Total consideration
$ 93,787 . . . .
The Company has accounted for the acquisition of the assets and
operations from Tarantella using the purchase method of accounting.
Under
this method, the total purchase price, including direct fees and
expenses,
was allocated to the tangible and intangible assets acquired and the
liabilities assumed based upon their respective fair values. The
following
table summarizes the allocation of the consideration to the tangible and
intangible assets acquired and liabilities assumed (in thousands):
Purchase price allocation:
Liabilities assumed net of tangible assets acquired
$ (5,482)
Accrual for severance payments, non-essential facilities and related
costs (3,011)
Intangible assets acquired:
Distribution/reseller channel
26,700
Existing technology (consisting primarily of UNIXWare and
OpenServer) 5,800
Acquired in-process research and development
1,500
Trade name and trademarks
800
Distribution agreement
1,400
Goodwill
66,080
Total
$ 93,787
. . . .
6) NOTE PAYABLE TO TARANTELLA, INC.
As discussed in Note 3, the Company issued to Tarantella an
unsecured,
non-interest bearing promissory note in the amount of $8.0 million. Four
quarterly payments of $2.0 million are payable to Tarantella beginning
in the
Company's third fiscal quarter of 2002. Because the promissory note was
non-interest bearing, the promissory note has been recorded at a
discount using
an interest rate of 6.5 percent. As of October 31, 2001, the current
portion of
the note payable was $3.8 million, which represented the discounted
value of the
two payments to be paid during fiscal 2002. The remaining two payments
will be
made during fiscal 2003. . . .
(10) RELATED PARTY TRANSACTIONS
TARANTELLA, INC.
As discussed in Note 3, the Company acquired certain assets,
liabilities and operations from Tarantella, Inc. during fiscal 2001.
Prior to
the acquisition, the Company and Tarantella had entered into a strategic
business agreement that provided for certain joint marketing activities
between the parties. Additionally, both parties entered into a
distribution
agreement to sell each other's products. During the six months ended
April
30, 2001, Caldera paid to Tarantella approximately $1.1 million for the
purchase of products that were sold to Caldera customers.
Subsequent to the acquisition, Caldera and Tarantella have paid
certain
operating costs on each other's behalf, mostly pertaining to activities
in
foreign operations. On a monthly basis, each party submits the actual
operating costs for reimbursement. As of October 31, 2001, the Company
owed
Tarantella approximately $0.5 million for these operating costs. . . .
LINEO
In January 2000, the Company acquired an ownership interest in
Lineo,
Inc., the successor entity to the operations of the Predecessor that
were not
acquired by Caldera in the reorganization discussed in Note 1. The
chairman
of the Company's board of directors and one other director are also
directors
of Lineo. During fiscal 2000 and 1999, the Company had sales to Lineo of
approximately $34,000 and $2,000, respectively.
MTI TECHNOLOGY CORPORATION
A director of the Company is the chairman of the board of MTI
Technology Corporation ("MTI"). Additionally, another Company director
is the
current president and chief executive officer of MTI. During fiscal 2000
and
1999, the Company had sales to MTI of approximately $31,000 and $3,000,
respectively.
. . . .
(3) Exhibits are incorporated herein by reference or are filed with
this report as indicated below:
EXHIBIT NUMBER DESCRIPTION
2.1 Agreement and Plan of Reorganization by and
among
Caldera Systems, Inc., Caldera International,
Inc.
("Registrant") and The Santa Cruz Operation,
Inc.,
and related amendments (incorporated by
reference to
Exhibit 2.1 to Caldera's Registration
Statement on
Form S-4 (File No. 333-45936)).
3.1 Amended and Restated Certificate of
Incorporation of
Caldera International, Inc. (incorporated by
reference to Exhibit 3.1 to Caldera's
Registration
Statement on Form S-4 (File No. 333-45936)).
3.2 Amended and Restated Bylaws of Caldera
International Inc. (incorporated by reference
to
Exhibit 3.2 to Caldera's Registration
Statement
on Form S-4 (File No. 333-45936)).
4.1 Form of certificate of common stock
(incorporated
by reference to Exhibit 4.1 to Caldera's
Registration Statement on Form S-4 (File No.
333-45936)).
10.1 Caldera 1998 Stock Option Plan (incorporated
by
reference to Exhibit 10.3 to Caldera's
Registration
Statement on Form S-1 (File No. 333-94351)).
10.2 Caldera 1999 Omnibus Stock Incentive Plan, as
amended
(incorporated by reference to Exhibits 10.3
through
10.4 to Caldera's Registration Statement on
Form S-4
(File No. 333-45936)).
10.3 Caldera 2000 Employee Stock Purchase Plan, as
amended
(incorporated by reference to Exhibit 10.9 to
Caldera's Registration Statement on Form S-4
(File
No. 333-45936)).
10.4 Stock Purchase Agreement, dated January 6,
2000,
between Caldera and Lineo, Inc. (incorporated
by
reference to Exhibit 10.11 to Caldera's
Registration
Statement on Form S-1 (File No. 333-94351)).
10.5 GNU General Public License (incorporated by
reference
to Exhibit 10.14 to the Registrant's
Registration
Statement on Form S-1 (File No. 333-94351)).
+10.6 Sun Community Source License version 2.3
dated
January 7, 2000, between Caldera and Sun
Microsystems, Inc. (incorporated by reference
to
Exhibit 10.17 to Caldera's Registration
Statement on
Form S-1 (File No. 333-94351)).
+10.7 Sun Community Source License version 2.7
dated
January 7, 2000 between Caldera and Sun
Microsystems,
Inc. (incorporated by reference to Exhibit
10.18 to
Caldera's Registration Statement on Form S-1
(File
No. 333-94351)).
10.8 Assignment of Lease dated January 21, 2000,
between
Caldera and Nextpage, L.C. (incorporated by
reference to Exhibit 10.23 to Caldera's
Registration Statement on Form S-1 (File No.
333-94351)).
10.9 Form of Indemnification Agreement by and
between
Caldera and its executive officersand
directors
(incorporated by reference to Exhibit 10.24
to
Caldera's Registration Statement on Form S-1
(File
No. 333-94351)).
10.10 Second Amendment to Lease Agreement, dated
April 5,
2000, between Caldera and EsNet Properties,
L.C.
(incorporated by reference to Exhibit 10.2 to
Caldera's quarterly report on Form 10-Q for
the
quarter ended April 30, 2000).
10.11 Lease Agreement, dated October 9, 1997
between
Caldera, Inc., a Utah corporation, and EsNet
Properties, L.C. (incorporated by reference
to
Exhibit 10.3 to Caldera's quarterly report on
Form
10-Q for the quarter ended April 30, 2000).
10.12 Master Lease dated March 30, 2000, between
Caldera
and 106th South Business Park, L.C.
(incorporated
by reference to Exhibit 10.4 to Caldera's
quarterly report on Form 10-Q for the quarter
ended April 30, 2000).
10.13 Form of Senior Executive Severance Agreement
(incorporated by reference to Exhibit 10.31
to
Caldera's Registration Statement on Form S-4
(File
No. 333-45936)).
10.14 Stock Purchase and Sale Agreement between The
Canopy Group, Inc., Caldera Systems, Inc. and
Metrowerks Holdings, Inc. (incorporated by
reference to Exhibit 10.40 to Caldera's
Registration Statement on Form S-4 (File No.
333-45936)).
10.15 Stockholder Agreement between Lineo, Inc.,
Bryan
Sparks, Dry Canyon Holding Company LLC and
Metrowerks Holdings, Inc. (incorporated by
reference to Exhibit 10.41 to Caldera's
Registration Statement on Form S-4
(File No. 333-45936)).
10.16 Warrant Purchase Agreement between Lineo,
Inc. and
Metrowerks Holdings, Inc. (incorporated by
reference to Exhibit 10.42 to Caldera's
Registration Statement on Form S-4 (File No.
333-45936)).
10.17 Form of Secured Convertible Promissory Note
issued
by The Santa Cruz Operation, Inc. to Caldera
Systems, Inc. (incorporated by reference to
Exhibit 10.43 to Caldera's Registration
Statement
on Form S-4 (File No. 333-45936)).
10.18 Form of Security Agreement between The Santa
Cruz
Operation, Inc., as debtor, and Caldera
Systems,
Inc., as secured party (incorporated by
reference
to Exhibit 10.44 to Caldera's Registration
Statement on Form S-4 (File No. 333-45936)).
10.19 Form of Intercreditor Agreement among The
Canopy
Group, Inc., The Santa Cruz Operation, Inc.
and
Caldera Systems, Inc. (incorporated by
reference
to Exhibit 10.45 to Caldera's Registration
Statement on Form S-4 (File No. 333-45936)).
10.20 Form of Loan Agreement between The Canopy
Group,
Inc., The Santa Cruz Operation, Inc. and
Caldera
Systems, Inc. (incorporated by reference to
Exhibit 10.46 to Caldera's Registration
Statement
on Form S-4 (File No. 333-45936)).
10.21 Form of Security Agreement between The Canopy
Group, Inc. and The Santa Cruz Operation,
Inc.
(incorporated by reference to Exhibit 10.47
to
Caldera's Registration Statement on Form S-4
(File
No. 333-45936)).
10.22 Form of Secured Convertible Promissory Note
issued
by The Santa Cruz Operation, Inc. to The
Canopy
Group, Inc. (incorporated by reference to
Exhibit
10.48 to Caldera's Registration Statement on
Form
S-4 (File No. 333-45936)).
10.23 Form of Secured Promissory Note to be issued
by
Caldera International, Inc. to The Santa Cruz
Operation, Inc. (incorporated by reference to
Exhibit 10.49 to Caldera's Registration
Statement
on Form S-4 (File No. 333-45936)).
10.24 Form of Security Agreement between Caldera
International, Inc., as debtor, and The Santa
Cruz
Operation, Inc., as secured party
(incorporated by
reference to Exhibit 10.50 to Caldera's
Registration Statement on Form S-4 (File No.
333-45936)).
21.1 Subsidiaries of the Registrant
23.1 Consent of Arthur Andersen LLP, Independent
Public
Accountants of Caldera . . .
*************************************
From their Form 10Q,
filing date: 2002-03-15:
On May 7, 2001, we formed a new holding company,
Caldera International ("Caldera"), to acquire substantially all of the
assets
and operations of the server and professional services groups of
Tarantella
Inc., formerly known as The Santa Cruz Operation, Inc., pursuant to an
Agreement
and Plan of Reorganization, dated August 1, 2000 and as subsequently
amended
(the "Tarantella Acquisition"). In connection with this acquisition,
Caldera
Systems was acquired by the newly formed holding company. Former holders
of
shares and options to purchase shares of Caldera Systems received an
equal
number of shares and options to purchase shares in Caldera
International.
Prior to the acquisition of the OpenServer and UNIXWare product
lines from
Tarantella, substantially all of our revenue was derived from sales of
Linux
products and related services. Currently, over 90 percent of our total
revenue
is derived from OpenServer and UNIXWare related products and services.
RESULTS OF OPERATIONS
The Tarantella Acquisition significantly increased our net revenue
and
operating expenses. Operating results for the first quarter of fiscal
2002 are
not directly comparable to the same period in fiscal 2001 because of the
acquired operations. Accordingly, a pro forma analysis has been included
below.
During the third and fourth quarters of fiscal 2001 and the first
quarter
of fiscal 2002, we implemented cost cutting measures related to
personnel and
excess facilities and have reduced overall operating expenses, and
anticipate we
will continue to make cost-cutting decisions in our efforts to attain
profitability. We have reduced headcount from 664 at the time of the
Tarantella
Acquisition to 523 as of January 31, 2002.
Date: March 15, 2002
CALDERA SYSTEMS, INC.
By: /s/ Robert K. Bench
----------------------
Robert K. Bench
Chief Financial Officer
(Principal Financial
Officer)
*******************************************
From their 8K, filing date: 2002-04-02:
Caldera International, Inc. issued the following press release on April
1, 2002.
CALDERA INTERNATIONAL, INC. AND TARANTELLA, INC.
AGREE ON EARLY REDEMPTION OF PROMISSORY NOTE
AND STOCK REPURCHASE
LINDON, Utah--April 1, 2002--Caldera International, Inc.
(Nasdaq:
CALDD) today announced it has completed an agreement with Tarantella,
Inc.
(Nasdaq: TTLA) involving the early redemption of a note currently held
by
Tarantella. Additionally, Caldera agreed to the buyout of licenses for
products
bundled in older releases of The Santa Cruz Operation, Inc.'s (SCO's)
software,
and the buyback of 500,000 shares of Caldera stock, currently owned by
Tarantella.
This agreement accelerates certain elements of last year's
transaction
in which Caldera purchased assets and certain operations from
Tarantella, Inc.,
then known as The Santa Cruz Operation. The details of the current
arrangement
are:
Caldera has agreed to a $5 million early redemption of their
promissory
note, which was payable in four quarterly installments of $2 million
each.
Caldera also purchased a paid-up license to continue bundling
the
Tarantella products VisionFS, TermLite and Webtop, which were bundled in
SCO
OpenServer and UNIXWare products prior to closure of last year's
transaction.
Caldera will purchase 500,000 shares of Caldera stock from
Tarantella
for $555,100.
CALDERA INTERNATIONAL, INC.
Caldera International (Nasdaq: CALDD) provides "Powerful
Choices" for
businesses through its UNIX, Linux and Volution product lines and
services.
Based in Lindon, UT, Caldera has representation in 82 countries and
16,000+
resellers worldwide. Caldera Global Services provides reliable localized
support
and services to partners and customers. For more information on Caldera
products
and services, visit http://www.caldera.com.
Caldera, the Caldera logos, Caldera Volution, OpenLinux, SCO
and the
associated SCO logo, and SCO OpenServer are trademarks or registered
trademarks
of Caldera International, Inc. in the U.S. and other countries. Caldera
Global
Services is a service mark of Caldera International, Inc. UNIX is a
registered
trademark of The Open Group in the United States and other countries.
Linux is a
registered trademark of Linus Torvalds. All other brand or product names
are or
may be trademarks of, and are used to identify products or services of,
their
respective owners.
********************************
From their 8K, filing date 2002-05-09:
LINDON, UTAH--MAY 8, 2002-- Caldera International, Inc., a leading
provider
of business solutions to small-to-medium businesses, today announced
that it
expects to report revenue in the range of $15.1 to $15.5 million for the
second
quarter ended April 30, 2002. These latest projections modify earlier
projections announced at the end of the prior quarter that Caldera
expected
revenue to be between $16.0 and $18.0 million. Caldera cited the
continued
economic weakness and a slower than anticipated increase in IT spending
that
contributed to the revenue shortfall. Customers are continuing to expand
their
operations, but at a much slower pace than in past years.
Caldera will provide updated information with regard to the
upcoming
quarter's revenue outlook in a press release and conference call
announcing
results for the second quarter on Wednesday, May 29, 2002.
Due to Caldera's revenue shortfall and the company's increased
efficiencies, Caldera also announced a 15 percent reduction in the
company's
worldwide staff, or approximately 73 employees. The reduction will
broadly cover
all functional and geographic areas of the company. After this
reduction, the
company will have a total staff of approximately 400 employees.
The company plans to streamline operations by closing offices in
Chelmsford, Massachusetts and Erlangen, Germany. Caldera will continue
its
German operations in Munich and Frankfurt. The restructuring is another
step to
help the company realize its goal of achieving profitability and is
expected to
save the company $7.0 million on an annual basis.
"Recognizing the difficult worldwide I.T. market conditions and
Caldera's
commitment to profitability, we believe that this is a necessary step to
protect
shareholder value in Caldera," said Ransom Love, Chairman and CEO,
Caldera
International. "Since the acquisition of the SCO Server division,
Caldera has
eliminated $9.3 million or 42 percent in quarterly operating expenses as
we
continue to drive to our profitable operating model."
In addition to the reduction in force, Caldera is also announcing
the
departure of the company's chief technology officer, Drew Spencer, and
Chief
Legal Counsel, Harrison Colter. Both Spencer and Colter will continue
consulting
with the company on a part-time basis. Spencer joined Caldera in 1999
and has
held several positions overseeing software development, research and
engineering. Colter joined Caldera in 2001 as Caldera's chief legal
counsel.
As part of the executive reorganization, Reg Broughton, the
company's
senior vice president over services and operating systems, will assume
responsibilities for the company's global operations. Broughton brings
more than
25 years of experience in executing sales, marketing and operational
excellence
of public and private companies.
***********************
From their 8K, filing date: 2002-07-24,
(Darl shows up):
Caldera International, Inc. issued the following press release on
July 23, 2002.
CALDERA INTERNATIONAL, INC.
COMPLETES STOCK REPURCHASE
LINDON, UTAH--JULY 22, 2002--Caldera International, Inc. (Nasdaq:
CALD)
today announced that it has completed the purchase of the shares of its
common stock held by Tarantella, Inc. (Nasdaq: TTLA) and MTI Technology
Corporation (Nasdaq: MTIC). Caldera acquired 4,304,000 shares or 31% of
its
issued and outstanding common stock for an aggregate purchase price of
$4,029,000, or $0.94 per share. The repurchase of these shares has
reduced
the number of issued and outstanding shares of the Company to 9,487,000,
of
which 5,318,000 are held by The Canopy Group, Inc., and the remaining
4,169,000 are held by non-affiliates.
"These shares were an overhang to the market and were depressing
Caldera's
stock price. The elimination of these shares puts Caldera in a much more
attractive position for present shareholders and interested investors,"
said Bob
Bench, CFO, Caldera International. "The repurchase of nearly a third of
Caldera's outstanding shares now opens the way for Caldera to raise
additional
capital at higher prices, and will allow for the market to reach a share
price
that more closely reflects the value of Caldera. The company has
improved its
equity position, is essentially debt free, and can now take advantage of
expansion opportunities."
"During the next 12 months, Caldera will identify appropriate
technologies
and companies that will complement our strategy and roadmap," said Darl
McBride,
president and CEO, Caldera International. "Caldera is in the enviable
position
of having a worldwide channel sales organization with a vast network of
resellers and distributors. We will be active in licensing and acquiring
technologies that leverage our channel and add value to our customers."
CALDERA INTERNATIONAL, INC.
Caldera International (Nasdaq: CALD) provides "Powerful Choices"
for
businesses through its UNIX, Linux and Volution product lines and
services.
Based in Lindon, UT, Caldera has representation in 82 countries and
16,000+
resellers worldwide. Caldera Global Services provides reliable localized
support
and services to partners and customers. For more information on Caldera
products
and services, visit HTTP://WWW.CALDERA.COM.
|
|
Authored by: xtifr on Tuesday, July 26 2005 @ 07:00 AM EDT |
A long document like this just might have a few typos...
---
Do not meddle in the affairs of Wizards, for it makes them soggy and hard to
light.[ Reply to This | # ]
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Authored by: mtew on Tuesday, July 26 2005 @ 07:00 AM EDT |
.
---
MTEW[ Reply to This | # ]
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Authored by: MathFox on Tuesday, July 26 2005 @ 07:05 AM EDT |
Please provide us with a summary and a link.
---
When people start to comment on the form of the message, it is a sign that they
have problems to accept the truth of the message.
[ Reply to This | # ]
|
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Authored by: WhiteFang on Tuesday, July 26 2005 @ 07:08 AM EDT |
Example of clicky link provided in list of allowed html shown below the comment
window when you comment.
:-) <=== In defiance of MS's Patent Application regarding the transmittal
and rendering of Smileys.[ Reply to This | # ]
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Authored by: WhiteFang on Tuesday, July 26 2005 @ 07:10 AM EDT |
Nice article PJ.
Thank you.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 07:27 AM EDT |
Well, you would not expext the judge to miss all that. But the whole
SCO/Caldera act is not about persuading the judge. It is about duping a jury.
If they manage to get there eventually. But then it is sufficient if they make
a plausible effort: this would be enough to protect the profiteurs from legal
consequences for their selfreward, pump&dump schemes at the cost of the
stockholders.
They just have to maintain the bluff that they are actually being serious, and
they may get away scot free when SCO finaly collapses.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 07:58 AM EDT |
They claim that Linux could not have done certain things before the improper
contributions of IBM.
How important is that claim? I haven't seen any serious attempt to argue the
point. It should be easy to tell where any particular contribution to Linux
came from and demonstrate or refute that claim. Even so, it seems to me as if
the decision to sue was based on the following logic: "IBM must have been
bad, otherwise Linux would still be lame."
Of course, since this nonsense started, the tSCOg claims have transmogrified.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 07:58 AM EDT |
back in 2000 Caldera Linux was my distro of choice for a desktop altho Mandrake
was quite a serious contender by then. The installer was excellent and while you
were waiting for the packages to be installed they even gave you a game to play.
When Caldera was a serious Linux company it did really good things, IIRC they
gave us WebMin and a client for connecting to Novell NDS amongst others.
Sometimes i think I am more saddened how Darl and Co. have dragged this company
into the mud than I ever was angered by it.
Psychopaths: some mothers do have them.
Baz
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 08:15 AM EDT |
From the above quoted documentation :-
"EMPLOYEES
As of
October 31, 2001, we had a total of 545 employees. Of the total employees, 146
were in software engineering, 117 in sales, 58 in marketing, 87 in customer
service and technical support, 34 in customer delivery, and 103 in
administration. . . .
So let me get this straight, in 2001, a
company that would have us believe that they were firmly committed to building
and developing software solutions, decides to organise thus :-
18.89% in
Administration
6.23% in Customer Delivery
15.96% in Customer
Service
10.64% in Marketing
21.46% in Sales
and
26.78%
in Software Engineering
Think about that for a minute. If you were to
total the numbers of staff working in Administration, Sales and Marketing, for
example, you get 278 people, which is almost 51.01% of your work
force.
I wonder if these SCO-quoted numbers include
Directors?
Either way, this strikes me as being a rather odd way to run
a business. 51% of your company is basically overhead. The real profit-centres -
i.e. Software Engineering and [paid for] Customer Support account for a much
smaller segment of the total workforce.
Please excuse the fact that I
don't know enough about the software industry to state with confidence, but in
many other "engineering" industries with which I am more familiar, these ratios
would be suicidal. You could not sustain a profitable business with this kind of
staff organisation.
This leads me to believe that, as early as the time
of this statement - say 2001 - that TSG, SCO, or whatever they want to call
themselves for the purpose of this observation, had organised themselves into a
form that was doomed to failure.
If I had ever been a shareholder in
this company, I'd find this kind of information fascinating.
To this
lay-person, the material presented here seems to suggest that SCO were unable to
organise themselves into a model capable of sustained profitability. Obviously
this is 20-20 hindsight and we have seen the court case only serve to accelerate
their demise. However, surely Darl McBride and other Directors had a
responsibility to their shareholders to run an efficient, profitable and
well-managed organisation?
Unless, of course, it had never been their
intention to derive income from what the rest of us would consider normal and
routine business practices, but had instead been their intention to litigate for
income from this far back in their history.
Anyone out there have
experience in working for a software company of similar size and be able to
comment on these numbers?
[ Reply to This | # ]
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- Business grows, so does overhead - Authored by: Anonymous on Tuesday, July 26 2005 @ 08:29 AM EDT
- Employees - Do the Numbers... - Authored by: Steve Martin on Tuesday, July 26 2005 @ 08:30 AM EDT
- M$ Numbers... - Authored by: Ed L. on Tuesday, July 26 2005 @ 06:32 PM EDT
- fwiw... - Authored by: meshuggeneh on Tuesday, July 26 2005 @ 09:49 PM EDT
- fwiw... - Authored by: Anonymous on Wednesday, July 27 2005 @ 12:17 AM EDT
- Employees - Do the Numbers... - Authored by: LocoYokel on Tuesday, July 26 2005 @ 08:57 AM EDT
- Well, it was a service company - Authored by: tangomike on Tuesday, July 26 2005 @ 10:01 AM EDT
- Employees - Do the Numbers... - Authored by: Anonymous on Tuesday, July 26 2005 @ 10:17 AM EDT
- Overhead or not. - Authored by: belboz on Tuesday, July 26 2005 @ 11:01 AM EDT
- Employees - Do the Numbers... - Authored by: Anonymous on Tuesday, July 26 2005 @ 12:18 PM EDT
- Employees - Do the Numbers... - Authored by: walth on Tuesday, July 26 2005 @ 02:34 PM EDT
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Authored by: Mark Levitt on Tuesday, July 26 2005 @ 08:22 AM EDT |
I remember the very early days of Caldera. I think it was 97-98 time frame
with RedHat and Caldera sort of neck and neck for US commercial Linux
market share.
RedHat was, and continues to be almost entirely GPL, with the only exception
being the name and logo artwork.
Caldera, on the other hand, had lots of closed-source proprietary bits and, if I
reember right, wanted to charge per-seat licensing.
Caldera's big selling point was integration with Novel Networks that, while
fading, were still installed in lots of places.
Anyway, I always got the feeling that Caldera, even as a Linux company, were
much more concerned with maximizing their profit than with promoting
Linux. I suspect they saw Linux almost like an OEM part that they were lucky
to get for zero cost that they could add value to and make money.
That always made me a bit suspicous of their motives. I'm glad to see my
instints were working...[ Reply to This | # ]
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Authored by: justjeff on Tuesday, July 26 2005 @ 08:27 AM EDT |
I go back and forth in my wish to see this case actually get to a jury.
When I'm hoping it gets to trial, I envision the IBM lawyers interrupting SCO
every minute or so, asking them to clarify, "Do you mean old SCO? the
Santa Cruz Operation? Or do you mean new SCO? once known as Caldera?"
I guess it would not really be worth it to continuously beat them up for weeks
over the name, but I think it would help a lot to make sure that the jury
understands and remembers the "SCO" name and the deliberate confusion
that Caldera hoped to create by changing its name.
- jeff -
[ Reply to This | # ]
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Authored by: DaveJakeman on Tuesday, July 26 2005 @ 08:43 AM EDT |
"All of this is background for some older Caldera SEC filings I've been
looking through, and what simply leaps off the page is that when Caldera/nowSCO
told the court that Linux was a hobbyist platform until IBM started to meddle
and that it never would have been a competitive threat as quickly as it did,
they were pretending to the court that they were always a Unix business,
speaking not as Caldera, but as if they were oldSCO/Tarantella. Whatever were
they thinking? Linux wasn't their competition back then. They were a Linux
company, the first to push Linux in the enterprise, at the very time that IBM
got interested in Linux."
Just another reason why this fiaSCO is so absurd and requires intimate
understanding of an alternate reality in a parallel universe to explain its
Escher-like convolutions in Torsional G-space.
Maybe when the whole world is against you, as in paranoia, everything is unreal
and that is SCO's version of reality. We just happen to be sane; our version of
reality is ordered, rational and follows agreed-upon,
not-upside-down-and-inside-out-and-warped-and-twisted rules and conditions.
Poor us.
Schizophrenia is a problem one has with identities. SCO seems to have that one
too:
"Prior to the acquisition of the UNIX and OpenServer product lines from
Tarantella, substantially all of our revenue was derived from sales of Linux
products and related services. Currently, over 90 percent of our revenue is
derived from sales of products acquired from Tarantella."
This seems to be where the rot set in. Caldera lost their identity when they
switched from Linux to Unix, whether that was their intention or not. They seem
to have been confused over their identity ever since and have behaved
accordingly.
---
Should one hear an accusation, first look to see how it might be levelled at the
accuser.[ Reply to This | # ]
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Authored by: freeio on Tuesday, July 26 2005 @ 09:20 AM EDT |
I remember well the business with Lineo. I still have some Lineo
hardware
and development tools here, and my experience with them was
ugly. In spite
of the fact that their devices and kits were sold
as development tools, they
intentionally released so little information
that they were very nearly useless.
In 2000 and 2001, I was developing
a board set using the Motorola ColdFire
processor, and intended to use
their tool set to do the linux porting.
However, their reference
designs provided no information about the hardware - it
was as closed a
design as possible. They even had modified their board
designs to
have solid copper planes on the outer layers lest someone figure
out
what they had done. Their software tools were terribly immature
at the
time as a product, and what I received consisted of little more
than a somewhat
customized gcc toolset.
Now, apparently they had purchased the
expertise by buying a couple of
smaller sompanies, those being Moreton Bay
Ventures
(From Austraila) and RT-Control
(from
Canada). My project was an attempt to provide a standard
controller design
for a series of instruments which my company was
interested in building at the
time. What we needed was a
known-working controller design so that we
could build our test
equipment based upon that single design, as an aid to
improving our
time-to-market. The ability to run linux was the key here,
since
we could inherit much of the basic functionality, without having
to
reinvent the wheel.
Since I could not obtain hardware information
from them, I produced a
reference design from scratch, and since no one else
seemed to be doing
this, I released the reference
design under the
GPL. I still could not get their toolset to
work with it, even with
competent help from a member of the Debian
team, and so the project was
shelved.
My point is this: By the time of the Lineo acquisition,
Caldera
was already into a profit-at-all-costs mode to such an extent that they
were hurting
their future prospects. Whatever we do, we must not forget
that
even under Ransom Love, before Darl came to power, that Caldera was
very
much into closed source development, even to the point where their
paying
customers went pretty much unsupported. As such, the
decline we see today
is apparently more a change of degree rather than
of kind.
--- Tux
et bona et fortuna est. [ Reply to This | # ]
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Authored by: ff5166 on Tuesday, July 26 2005 @ 09:20 AM EDT |
Just found this
<
br>
Doug Michels, SCO CEO and president, believes that, there is
"tremendous motion in the computer industry at large and we're at a fundamental
turning point. There are two trends. One is the emergence of open source and the
other is the adoption of the Internet in the area of business computing."
Caldera has chosen to ride the open-source side with operating systems for
business and e-business.
If you ever wanted a one-stop
company for both your Unix and Linux needs, Caldera aims to be your company of
choice. [ Reply to This | # ]
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Authored by: Svartalf on Tuesday, July 26 2005 @ 09:37 AM EDT |
...it almost looks like The SCO Group doesn't really even have the
standing to file the case that they have filed against IBM. If they didn't
really buy the core of SCO, now Tarentella, in the first place, how can they be
a party in interest with the Project Monterrey agreements in the first place? [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 09:54 AM EDT |
In other words, IBM's contract regarding AIX and Unix and Project Monteray was
with The Santa Clara Organization, Old SCO. The SCO Group (nee Caldera or
Caldera International or whatever) didn't have that contract with IBM, and
haven't shown any evidence that they bought that contract, or the piece of old
SCO that had that contract.
So how can this law suit be about a contract between two OTHER companies?
Just asking, not a lawyer, but don't you have to be a party to the contract to
sue over its conditions and requirements?
Caldera wasn't a party to that contract at all, and will need to show SOME
evidence that they are successor in interest to that contract. If the
contractural relationship ended before they bought....well, they may have
allegedly bought Unix before that project ended...but they will need to show
some evidence that they actually did buy something, and that what they bought
includes the contract.
JR in WV[ Reply to This | # ]
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Authored by: MplsBrian on Tuesday, July 26 2005 @ 10:14 AM EDT |
From which side of your mouth will you be speaking today? [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 10:43 AM EDT |
Okay - I give up - I have to go take a bottle of aspirin now.
SCO is like and enigma wrapped inside a riddle or a riddle wrapped inside an
enigma - can't remember it exactly from JFK - its no wonder they flopped as a
company - they didn't know who they were or where they were going.
SCO to me is just one big waste of time and taxpayers money. I think they are a
classic dysfunctional company.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 11:13 AM EDT |
If SCO doesn't get their pound of flesh from IBM over Monterrey (which it looks
like they won't), then their next move will be to go after Sun.
Why? Well, the theory will be that Tarantella didn't tell Caldera what the deal
really was at the time of the sale, and Caldera/SCO had to go through this big
lawsuit to find out that they didn't really have what they thought. And Sun
bought Tarantella, with it they bought liability for Tarantella's deceit of
Caldera.
Now, I doubt any of that squares with reality, but it wouldn't surprise me if
SCO tried this.
But, you may ask, with what money? They will be bankrupt when IBM is through
with them. Well, they could bring this suit the day after their contract claims
are dismissed (but before IBM's counterclaims are ruled on).
Just speculation, but it does seem consistent with SCO's behavior...
MSS[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 11:18 AM EDT |
Seems like they've a history of creating naming confusion. Caldera, Inc. ...
Caldera Systems ... Caldera International
It's no wonder they keep asking for roadmaps... they've lost themselves by their
naming convolutions.
...D
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 11:38 AM EDT |
I see you managed to get everyone pleasantly confused again. Maybe even the
mainstream press.
Will you be able to blame SCO for it without posting several updates?[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 11:41 AM EDT |
Who or what is Solera Networks? I hadn't heard of them before, and when I went
to search for more information, the only article that returned was today's.
Thanks
[ Reply to This | # ]
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- try this - Authored by: jog on Tuesday, July 26 2005 @ 11:57 AM EDT
- try this - Authored by: rm6990 on Tuesday, July 26 2005 @ 06:37 PM EDT
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Authored by: Anonymous on Tuesday, July 26 2005 @ 11:59 AM EDT |
I sure wish something NEW would happen in the cases...these little trips through
the past, rehashing what everyone already knows, are getting boring.
Judge Kimball....HELP![ Reply to This | # ]
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Authored by: rsteinmetz70112 on Tuesday, July 26 2005 @ 12:02 PM EDT |
I notice that Project Monterey, AIX or IBM (in the context of Project Monterey)
are not mentioned in any of the excerpts from the Caldera SEC filings.
I assume that if there were any statements which characterized Caldera's take on
Project Monterey PJ, in her usual through manner, would have included them.
I therefore conclude that Caldera never mentioned Project Monterey, IBM or AIX
5L in any of its filings. I further conclude that Caldera must have felt
Monterey was not a cause of its continuing decline. Even if they didn't blame
IBM they should have mentioned it, if they believed it was material.
It seems that Caldera at one time anticipated acquiring about 900 employees from
SCO. The head count dropped rapidly from there. It's a pretty steep slope.
---
Rsteinmetz - IANAL therefore my opinions are illegal.
"I could be wrong now, but I don't think so."
Randy Newman - The Title Theme from Monk
[ Reply to This | # ]
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Authored by: pooky on Tuesday, July 26 2005 @ 12:12 PM EDT |
"Caldera's efforts to unify Linux and UNIX provides the business customer
the ideal option of developing a single application that can now scale from the
smallest device to the most comprehensive operating environment available on
Intel..."
Doesn't this statement alone pretty much dismantle their case against IBM?
-pooky
---
Many Bothans died to bring us this information.[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 12:40 PM EDT |
Well done. [ Reply to This | # ]
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Authored by: kb8rln on Tuesday, July 26 2005 @ 02:06 PM EDT |
OK help me get this right.
SCO in Second Amended complaint
said:
3. A variant or clone of UNIX currently exists in the
computer marketplace called “Linux.” Linux is, in material part, based upon UNIX
source code and methods.
8. The termination notice was based, in part,
on IBM’s self-proclaimed contributions of AIX source code to Linux, and use of
UNIX/AIX methods for accelerating the development of Linux in contravention of
IBM’s contractual obligations to SCO.
I think this is what
SCO is saying. AIX is base on SYS V. Home grown code does not exist, ATT side
letter does not exist. No AIX code can be put into Linux. Since SCO did not
find any code from AIX in Linux. It back too well IBM told Linux people how to
do it and the only reason we sue is because of IBM public statements. In any
case Linux has no copyright problems even if SCO win the contract case.
Enjoy,
Richard Rager
Penguinman.com
--- Director Of
Infrastructure Technology (DOIT)
Really this is my Title so I not a Lawyer.
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 03:43 PM EDT |
...what simply leaps off the page is that when Caldera/nowSCO told the court
that Linux was a hobbyist platform until IBM started to meddle and that it never
would have been a competitive threat as quickly as it did, they were pretending
to the court that they were always a Unix business, speaking not as Caldera, but
as if they were oldSCO/Tarantella. Whatever were they thinking? Linux wasn't
their competition back then. They were a Linux company, the first to push Linux
in the enterprise, at the very time that IBM got interested in
Linux.
Caldera should have tried to make the case that they already had
a profitable business in making Linux 'enterprise-ready', which is why IBM
wanted them for Monterey, and then IBM used Monterey to steal all Caldera's
Linux expertise, and gave said expertise away under the GPL, having first
laundered it thru AIX. Such a case might still have no merit, but it would at
least make sense.
I can just picture Mike Anderer trying to sell this case
at Microsoft, and all his Microsoft executive contacts insisting on crossing out
'Linux' and writing in 'UNIX' in crayon because they dare not admit that anyone
could have a profitable business in making Linux enterprise-ready.
So in
order to get the funding they needed, Caldera had to make the case that they had
a profitable business in vending and servicing UNIX, which is why IBM wanted
them for Monterey, and then IBM used Monterey to steal all Caldera's UNIX
expertise, and gave said expertise away under the GPL, having first laundered it
thru AIX. They changed their name so no one would remember that they were a
Linux vendor.
It's too bad, in a way. If Caldera could have presented their
real case, instead of the cargo-cult version authored by Microsoft, they might
have gained a settlement, kept their reputations, and avoided the risk of
criminal charges. The whole tragedy just goes to show that nobody partners with
Microsoft without getting screwed. Nobody.
-Wang-Lo.
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 03:56 PM EDT |
Funny, I don't see that "SCO"/Caldera purchased 'Unix' from
Tarantella. They purchased the assets of the company, but did the assets
actually include the copyrights for 'Unix'?
From the list of items it sure doesn't appear to be.
I would assume that any new material created from this date would be owned by
them, but what about material created before (the bulk of 'Unix').
Thanks![ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 05:32 PM EDT |
Judges are not all-knowing. I don't believe they read every document presented
and rely upon the lawyers to explain their version. The opposing side gets to
rebuttal any statements they perceived to be in error as long as they can
provide relevant facts. The judge then decides who has the most compelling
argument.
All of the information that PJ has collected is what paralegals do. If all of
this was founded earlier by the IBM attorneys they could have prevented some of
the misinformation that SCO was presenting to the courts and the discovery would
have been much more limited.
One of the biggest problems is that the SCO attorneys know how to bamboozle the
courts and hopefully, they will be found in contempt or face a disciplinary
hearing. IBM attorneys tried to play by the rules but when facing an opposition
that isn't going to play by the rules makes one's work a whole lot more
difficult. [ Reply to This | # ]
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Authored by: eggplant37 on Tuesday, July 26 2005 @ 06:19 PM EDT |
Back in '02 when my company sent me to some training on Caldera Linux and their
Volution email server solution. The instructor was knowledgeable and thorough
enough that I did feel like I came away having learned something, if anything,
about the Volution package. I had already been running Linux (specifically
Mandrake) since '99 and had become pretty familiar with both the GUI and the
commandline environments, so that part I felt like I helped the guy teach the
class by giving him interesting questions to answer about stuff I felt he missed
on.
Reading the documents in this article helped remind me that this part of the
whole story needed to be told again, and now, with their cases looking like
they're about to go into the toilet, is the perfect time. My hopes are that
this little item gets some coverage in the mainstream press and helps slow that
sudden uptick in their stock price.[ Reply to This | # ]
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Authored by: thorpie on Tuesday, July 26 2005 @ 07:06 PM EDT |
I love the bit about how OldSCO was intending laying people off. Caldera
paid them $1.5 million to keep them on the payroll until the deal was
completed. They then lay off over 1/3 of their staff (663 down to 400) over the
next 12 months.
Apart from showing that they had no idea whatsoever, it
indicates thay also would not listen to people in the industry who knew. OldSCO
had some idea, they were laying the people off. Caldera comes along and
overrides this decision.
--- The memories of a man in his old age are
the deeds of a man in his prime - Floyd, Pink [ Reply to This | # ]
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Authored by: joef on Tuesday, July 26 2005 @ 07:36 PM EDT |
I thought it might be able to find what Old SCO had to say in their 10-K filings
re the sale -- what they say was included, etc. I also picked up on what they
said about the joint effort with IBM. Note this snippet:
o 1998 - SCO joined with IBM to begin developing new high-volume enterprise
UNIX
System for 64-bit processor servers, called "Project Monterey." This
product
line is designed to run on Intel IA-32, Intel IA-64 and IBM microprocessor
systems that range from entry-level servers to large enterprise environments.
Their take on the transaction is that it was a sale of a portion of the business
to Caldera.
From the (OLD) SCO 10-k for Year Ending 9/30/2000:
http://www.sec.gov/Archives/edgar/data/851560/000095013400010557/d82498e10-k.txt
o 1998 - SCO joined with IBM to begin developing new high-volume enterprise
UNIX
System for 64-bit processor servers, called "Project Monterey." This
product
line is designed to run on Intel IA-32, Intel IA-64 and IBM microprocessor
systems that range from entry-level servers to large enterprise environments.
o 1999 - UnixWare 7 Release 7.1 Operating System, featuring SCO's new Webtop
technology based on Tarantella software.
o 1999 - New series of Linux-related Professional Services offerings to assist
enterprise customers evaluate and manage the cost, benefits and risk of Open
Source technologies.
o 2000 - SCO entered into an agreement in which Caldera Systems would acquire
assets from the SCO Server Software and Professional Services Divisions,
including a highly skilled products and channel resources.
o 2000 - SCO announced that the company intends to change its name to
Tarantella, Inc.
And later:
<PAGE> 28
On August 1, 2000, the Company entered into an agreement with Caldera Systems,
Inc. ("Caldera") in which Caldera will acquire the Company's Server
Software
Division and its Professional Services Division. This transaction involves a
number of risks, including but not limited to i) the potential disruption of
the
Company's business that might result from employee or customer uncertainty, and
lack of focus following announcement of the transaction in connection with
integrating the operations of Caldera and the Company; ii) the risk that the
announcement of the transaction could result in decisions by customers to defer
purchases of products; iii) the substantial charges to be incurred due to the
transaction; iv) the difficulties of managing geographically dispersed
operations; and v) the possibility that the transactions contemplated in the
agreement with Caldera might not be consummated.
Further, once this transaction is consummated, the ongoing operations of the
company will be significantly altered. The Company's revenues will be derived
from only two product lines - Tarantella products, which have only been
recently
introduced by the Company, and OpenServer products, which are mature products
to
be distributed on the Company's behalf by Caldera. While the Company believes
that the current level of staffing together with future recruitment plans will
be different for the period following the consummation of the transaction,
there
can be no assurance that the company will be able to retain current employees
or
recruit the additional employees necessary to meet the company's ongoing plans.
In addition the company may not generate revenues at the levels forecasted and
as a result could find itself in a position of being overstaffed. As a result
the Company may need significant restructuring costs to reduce staffing levels.
Following the close of the transaction, the Company will hold in its treasury a
significant investment in Caldera, the value of which may be subject to
significant fluctuations.
It goes on for several paragraphs.
From the 2001 report:
http://www.sec.gov/Archives/edgar/data/851560/000089161801502769/f78009e10-k.txt
BACKGROUND
Tarantella, Inc. (Nasdaq: TTLA) (the Company), emerged as a standalone entity
in
May of this year from its origins as the Tarantella Division of The Santa Cruz
Operation, Inc. (SCO).
On May 4, 2001, SCO completed the sale of its Server Software and Professional
Services Divisions to Caldera Systems, Inc., retaining the Tarantella Division.
A new company, Caldera International, was formed which combined the assets
acquired from SCO with the assets of Caldera Systems. Upon the completion of
the
sale, The Santa Cruz Operation, Inc. changed its corporate name to Tarantella,
Inc. and its Nasdaq trading symbol to TTLA, reflecting the new corporate focus.
NOTE: In order to simplify this business section, separations will be made
between the current Tarantella company overview and the section regarding the
prior SCO business.
And continuing the history, they stated:
- 2001 -- SCO completes the partial sale of company assets to Caldera
Systems, Inc. and changes its name to Tarantella, Inc.
[ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 07:58 PM EDT |
I am curious... [ Reply to This | # ]
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Authored by: Anonymous on Tuesday, July 26 2005 @ 10:27 PM EDT |
that the new SCO should have observed. [ Reply to This | # ]
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Authored by: mpellatt on Wednesday, July 27 2005 @ 04:27 AM EDT |
Sorry if this is old hat (heck, it's been going on ages now!!) but: from the
complaint:
38. SCO’s early engineers faced difficult design challenges
in modifying UNIX for effective use on an Intel processing platform. The
principal design constraint centered on the limited processing power the Intel
chip possessed in the early 1980’s. The Intel chip (designed as it was for
personal computers) was not nearly as powerful as the enterprise RISC chips used
by IBM, Sun, SGI and others in their respective UNIX offerings.
39. Despite
the early design constraint of Intel’s limited processing power, SCO was able to
develop a version of UNIX for Intel PCs with full multi-processing and
multi-user support as well as excellent reliability. A PC running SCO's
OpenServer UNIX was a much more viable business application platform than the
same PC running any available version of Windows. SCO found an appropriate
enterprise market niche for the early versions of SCO OpenServer as a highly
reliable platform for business critical applications such as point-of-sale
control, inventory control and transactions processing. Intel systems running
UNIX were fully capable of performing multi-user business applications and could
do so at a much lower cost (and just as reliably) as the proprietary
mini-computer hardware sold by other UNIX vendors, such as Sun and IBM.. .
.
Now, this is an interesting little spin I hadn't noticed before.
Given that the 80386 launched in 1985, "early 1980's" must refer to the 80286,
and to Xenix, not Unix, since there was never a Unix that ran sensibly on the
'286. They then nicely fold that into the development of Unix - but, again, SCO
focussed strongly on Xenix in the early days of the '386. The first binary Unix
on the 80386, as I remember, was from Interactive. But it was an industry-wide
effort to port SVR3 onto the '386, sponsored to a major degree by Intel. Got
lots of other memories too - I think it was Xenix - a very different animal from
SVR3/SVR4 - that gave SCO the "in" to their core vertical markets, which they
then built on with the OpenServer range. All a very different story from the one
they paint in the complaint.
There's also some clever wording there in the
"business critical applications" they supported - "transactions processing". A
casual reader would read that as "transaction processing" and think of big-iron,
real-time, applications such as banking and airline reservation systems. Not
something SCO was well-known for. What they mean is the transfer and processing
of retail POS transactions - something that in those days was a batch overnight
transfer, not a TP application, and not requiring the same level of reliability
- if the transfer/process failed overnight, no problem, run it in the
morning.
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Authored by: Anonymous on Wednesday, July 27 2005 @ 09:09 AM EDT |
I do not understand how US law works in this instance; in particular, how
"successor in interest works".
If one company (being a legal person) enters into a contract with a second
company (being another legal person) then the contract is between those two
legal persons and those two alone.
If one company changes ownership or changes its name, that is of no consequence
as far as the contract is concerned.
But if the first company decides to sell part of its assets to a third company,
presumably the contract remains with the first company unless the contract
specifically allows otherwise.
I would have thought that any agreement to buy assets would in any case be
accompanied by a comprehensive inventory of what is being transfered.
Am I right in thinking that the Monterey contract was never formally terminated
but IBM merely declared it dead and the Santa Cruze Operation acquiesced to
this? What would be the legal status of such a contract?
Alan(UK)
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Authored by: Anonymous on Wednesday, July 27 2005 @ 01:00 PM EDT |
>>
AWARDS AND RECOGNITION
Caldera Systems and its products have received several recognitions and awards,
including:
- CNET Editor's Choice Award (October 2000);
- Network World Blue Ribbon Award (September 2000);
- Linux Magazine's Emperor Award (May 2000);
- PC ONLiNE Testsieger's (April 2000);
- Listing in Upside Magazine's Millennium 2000 eBusiness 150 (March 2000);
- Andover.net Dave Central's Best of Linux winner (February 2000);
- Linux Magazine's Cool Product Award (February 2000);
- PC Direct (Ziff-Davis) Best Buy 2000 award (January 2000);
- Internetweek's Best of the Best award for best software for 1999 (December
1999);
- The Linux Show's Best Distribution of Millennium (December 1999);
- Linux Journal's Product of the Year award at Comdex (November 1999);
- Listing in PC Magazine's Top 100 Technology Companies That Are Changing the
World (October 1999);
- Linuxworld Editor's Choice Award: Best Client and Distribution (August 1999);
- Network Computing's Well-Connected Award for Best Networked Operating System
(May 1999); and
- MikroPC's Product of the Year Award (1999).
>>
Once upon a time.
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