Originally Published: Tuesday, 11 January 2000 Author: Justin Maurer
Published to: featured_articles/Featured Articles Page: 1/1 - [Printable]

Caldera in the Spotlight

Yesterday was Caldera's day to steal the spotlight. It made not one, not two, but three announcements of tremendous importance to the Linux community. The announcements all have something in common: money, and lots of it....

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Yesterday was Caldera's day to steal the spotlight. It made not one, not two, but three announcements of tremendous importance to the Linux community. The announcements all have something in common: money, and lots of it.

Yesterday morning, Caldera announced it has received $30M in financing from an assortment of technology companies, including Sun Microsystems and the Santa Cruz Operation (SCO). Though Caldera is in the limelight, more focus should be placed on the investors than the investees. SCO is one company most threatened by the growing popularity of Linux. At one point, the company's former CEO, Doug Michels said he considered selling a free product like Red Hat "fraud." SCO once sent Linux users a letter offering them a discount on a "competitive upgrade" to UnixWare from Linux. He ended up apologising for the letter. Sun has also reacted to the rising prominence of free software by producing its own "community" license, the SCSL, and buying one of the most popular office suites available for Linux and other Unices. In a matter of months, both companies have made an about-face.

Caldera also announced that it has settled its long-standing suit with Microsoft. The company first brought suit against the software giant about three years ago, making claims very similar to that of the US Department of Justice: that Microsoft used anticompetitive practices to lock their competitors out of the market. The suit was due to go to trial in February, but the two companies chose to settle out of court rather than become entangled in a legal battle that could last for years. As a result, Caldera will receive about $150M from Microsoft, or almost twice what Red Hat made in its IPO. As the details of the agreement were not disclosed, interesting rumours have surfaced. One with a nick of credibility was that the agreement also requires Microsoft to publish software for Linux...

Finally, the whopper. Caldera filed for an initial public offering, only minutes after the Microsoft settlement was announced. Caldera is the third (or fourth, depending on whether or not you count Andover.net) Linux IPO, after Red Hat and VA Linux Systems, both record-breaking stocks. Caldera was very unclear as to how they wished to spend the money they will raise as a result of the offering. They said in their filing that "the net proceeds of this offering are not allocated for specific uses" -- almost as if they don't know what they are going to do with it. It will likely be used for human resources -- hiring more salespeople and hackers. It is also possible that the company will take a note from Red Hat and SuSE and open more international offices.

Finally, what you were all waiting for: "The Letter." Both Red Hat and VA offered prominent hackers in the free software community the opportunity to purchase stock at the IPO price. This email was considered by many to be a huge check dropped in their lap. It looks like Caldera will follow suit and send out a letter of some sort. The paperwork filed with the SEC says that they have reserved approximately 5% of the shares for "open source software developers and persons we believe have contributed to the success of the open source software community and to the growth of Caldera Systems."

This leaves only one question: how dedicated to the community is Caldera? While Red Hat continually stresses its commitment to free software, and its opposition to proprietary software, Caldera has continually embraced software less than free. It was a supporter of Qt/KDE long before they were free, and is continuing to ink deals with proprietary software vendors. More evidence from the S-1 supports this supposition -- they say their "success depends significantly on our ability to protect our trademarks, trade secrets and certain proprietary technology contained in our products." Philanthropy or Bribery? That's for you to decide.

Justin Maurer is a long-time Linux hacker, currently employed by Helix Code, Inc. He formerly wrote for Slashdot, and still tries to maintain a few Debian packages in his spare time.





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