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SCO tries to reinvigorate product line

The company that pinned its future to its legal attack on Linux directs some attention to its Unix products.

The SCO Group unveiled a handful of new Unix products Tuesday, a day after warning that its declining software business could be hurt by its legal claims that Linux infringes on the company's intellectual property.

The company sells two versions of Unix--UnixWare and the lower-end OpenServer--but that business has been shrinking and has been overshadowed by SCO's ongoing legal battles with IBM and others.

SCO claims, among other things, that it owns the Unix copyrights, that Linux infringes those copyrights, and that IBM violated its Unix contract with SCO by moving Unix technology to Linux.

Among the products SCO announced Tuesday were version 7.1.4 of its UnixWare software, accompanied by new editions for small businesses and for embedded devices such as slot machines; updates to calendar and e-mail server software; authentication software to ease login troubles in mixed Unix-Windows environments; and an OpenServer overhaul called Legend, based on the UnixWare kernel and due out in the first quarter of 2005.

The Small Business Edition starts at $599 for a perpetual license, SCO said. That compares to an annual list price of $349 for Red Hat Enterprise Linux ES Basic and $799 for Red Hat Enterprise Linux ES Standard. Red Hat said Tuesday its actual average RHEL price is $430 per year.

SCO's products are aimed chiefly at upgrades for the existing 2 million servers customers have installed, said Jeff Hunsaker, general manager of SCO's Unix division. "We look to that to help generate new revenues," he said.

New revenue has been hard to come by for the Lindon, Utah, company. In its most recent quarter, revenue from Unix software products and service declined to $8.4 million from $11.1 million, during the same period last year. Service revenue dropped from $2 million to $1.7 million. SCO attributed the decline to competition from other operating systems, "particularly Linux," and to lowered computing spending.

The company's SCOsource effort, which includes its legal actions and its attempt--largely unsuccessful so far--to sell intellectual property licenses to Linux users, could trigger more declines, SCO disclosed in a regulatory filing Monday.

"The decline in our Unix business revenue may be accelerated if industry partners withdraw their support as a result of our SCOsource initiatives and in particular any lawsuits against end users violating our intellectual property and contractual rights," SCO warned in the filing.

In an effort to make the Unix division profitable, SCO laid off 16 percent of its staff in the quarter ended April 30, the company said in the filing. The number of employees in the division dropped from 329 on April 30, 2003, to 263 on April 30, 2004, SCO said in the filing.