Sun to buy Tarantella

The $25 million cash deal is for a software maker once known as Santa Cruz Operation, or SCO.

Sun Microsystems announced Tuesday it will acquire software maker Tarantella in a $25 million cash deal it hopes will boost sales to corporate America.

Tarantella's software helps customers who are using desktop or lightweight "thin client" terminals access programs running on a server--for example, letting a Linux-based or Java-equipped PC appear to run Windows programs that actually are running on a central Windows server. Tarantella's Secure Global Desktop line, which competes with products from Citrix Systems, also allows customers to Web-enable applications.

The acquisition of Santa Cruz, Calif.-based Tarantella is Sun's latest software move. Sun is focusing on software to help turn itself around as sales have come under pressure.

Sun announced another software deal just a day earlier, saying it will acquire Procom Technology, a maker of storage system software.

John Loiacono, Sun's executive vice president for software, said Sun plans to build Tarantella's software into Sun's Solaris operating system. He expects the move will help further Sun's agenda of running software on powerful, secure, central servers and giving most people only thin clients such as the Sun Ray.

Sun's goal is to create "a foundation for building out desktop environments as a utility," Loiacono said during a conference call Tuesday. Sun executives have said the server and software company will create a thin client service that customers can buy as a subscription.

With Tarantella, Sun hopes its Sun Ray product will be more useful because it will be able to run Windows, mainframe and other applications. "We'd like the volumes to be higher," Loiacono said of Sun Ray sales.

Tarantella was known as Santa Cruz Operation before selling its software business to Caldera International in 2001. It adopted the Tarantella name after its remaining product line, which ran software on central servers that desktop computers could access. Following Caldera's acquisition, the Santa Cruz Operation software business went on to become the controversial SCO Group.

The Tarantella deal is expected to close in Sun's fiscal first quarter, which ends in the fall. Tarantella has 81 employees, Loiacono said.

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