View source for Santa Cruz Operation

{{Short description|Software company based in Santa Cruz, California}}
{{About|the original SCO company|the later users of the name from 2002 onwards|SCO Group}}
{{Use mdy dates|date=October 2018}}
{{Infobox company
| name             = The Santa Cruz Operation, Inc.
| logo             = Santa Cruz Operation logo, later years.svg
| image            = 
| image_caption    = 
| type             = [[Private company|Private]] (until 1993)<br/>[[Public company|Public]] (after 1993)
| traded_as        = {{NASDAQ was|SCOC}}
| founder          = {{ubl|Larry Michels|Doug Michels}}
| foundation       = 1979
| key_people       = {{ubl|Larry Michels|Lars Turndal|Alok Mohan|Doug Michels}}
| location_city    = [[Santa Cruz, California]]
| location_country = United States
| locations        = {{ubl|[[Murray Hill, New Jersey]]|[[Toronto, Canada]]|[[Watford, England]]|[[Cambridge, England]]| [[Leeds, England]]|many regional offices}}
| successor        = [[Tarantella, Inc.]]
| fate             = 2001, sold off Unix assets and renamed as [[Tarantella, Inc.]]
| defunct          = 2001 
| industry         = [[Computer software]]
| products         = {{ubl|[[Xenix]]|[[SCO UNIX]]|[[SCO OpenDesktop]]|[[SCO OpenServer]]|[[UnixWare]]|Vision97|[[Tarantella (product)|Tarantella]]}}
| num_employees    = 1,300 (peak, 1991)   
| revenue          = $224 million (peak, 1999) 
| homepage         = {{URL|www.sco.com}}
}}
[[Image:SCO Celebrates 20 commemorative plaque.jpg|thumb|right|upright=1.167|Commemorative plaque celebrating twenty years in business for Santa Cruz Operation, listing important milestones along the way]]<!-- located here as a visual pairing with the table of contents -->
'''The Santa Cruz Operation, Inc.''' (usually known as '''SCO''',<ref name="pr-names"/> pronounced either as individual letters or as a word) was an American software company, based in [[Santa Cruz, California]], that was best known for selling three [[Unix operating system]] variants for [[Intel]] [[x86]] processors: [[Xenix]], [[SCO UNIX]] (later known as [[SCO OpenDesktop]] and [[SCO OpenServer]]), and [[UnixWare]].

SCO was founded in 1979 by Larry Michels and his son Doug Michels and began as a consulting and Unix porting company.  An early involvement with [[Microsoft]] led to SCO making a product out of Xenix on Intel-based PCs.  The fundamental insight that led to SCO's success was that there was a large market for a standard, [[Open system (computing)|"open systems"]] operating system on commodity microprocessor hardware that would give business applications computing power and throughput that previously was only possible with considerably more expensive minicomputers.  SCO built a large community of [[value-added reseller]]s that would eventually become 15,000 strong and many of its sales to small and medium-sized businesses went through those resellers.  This community was exemplified by the annual [[SCO Forum]] conference, held in a scenic setting that reflected the company's Santa Cruz culture.  SCO also had corporate customers in the replicated sites space, where a SCO-based system was deployed in each of a retail or restaurant chain's stores.

Despite seeing rapid growth in terms of revenues, SCO tended to have high research and development costs and was never consistently profitable either before or after going public in 1993.  SCO bought two former Xenix outfits, the [[Logica#Software Products Group, Rapport, and Xenix|Software Products Group within Logica]] in 1986 and [[HCR Corporation]] in 1990, thereby gaining development offices in [[Watford, England]] and [[Toronto, Canada]].  During the mid-1990s, SCO acquired two further UK companies, [[IXI Limited]] in [[Cambridge]] and [[Visionware]] in [[Leeds]], which led to a suite of client-to-Unix integration products and then the [[Tarantella (product)|Tarantella]] product line.  SCO's operating system technology moved from Xenix to [[System V Release 3]] as reflected by the products [[SCO Open Desktop]] and [[SCO OpenServer]].  In 1995, SCO bought the [[System V Release 4]] and [[UnixWare]] business from [[Novell]] and, in collaboration with several hardware partners, the [[New Jersey]] development office it gained in the deal led a series of enhancements to the UnixWare product aimed at the high-end enterprise and data center spaces.

Beginning in the late 1990s, SCO faced increasingly severe competitive pressure, on one side from Microsoft's [[Windows NT]] and its successors and on the other side from the free and open source [[Linux]].  In 2001, the Santa Cruz Operation sold its rights to Unix and its Unix divisions to [[Caldera Systems]].  After that the corporation retained only its Tarantella product line, and changed its name to [[Tarantella, Inc.]]  Caldera Systems became [[Caldera International]] and then changed its name to [[The SCO Group]], which has created some confusion between the two companies. The company described here is the original Santa Cruz Operation. Although generally referred to simply as "SCO" up to 2001, it is now sometimes referred to as "old SCO", "Santa Cruz", or "SCO Classic" to distinguish it from "The SCO Group" to whom the U.S. trademark "SCO" was transferred.<ref>{{cite web
|url=http://tess2.uspto.gov/bin/showfield?f=doc&state=cef9ao.2.15
|archive-url=https://archive.today/20121214175006/http://tess2.uspto.gov/bin/showfield?f=doc&state=cef9ao.2.15
|url-status=dead
|archive-date=December 14, 2012
|title=Trademark Electronic Search System (TESS)
|access-date= May 3, 2008
|date= July 16, 2007
|publisher=United States Patent and Trademark Office
}}<!-- these are search URLs, and not stable! --></ref>

== Early history ==

=== Origin ===
[[Image:Santa Cruz-10-Universitaet-Cafeteria-1980-gje.jpg|thumb|right|The origins of the company and its culture came in part from the University of California, Santa Cruz, shown here in 1980.]]

SCO was founded in 1979 in [[Santa Cruz, California]], by Larry Michels and his son Doug Michels as a [[computer consulting|computer consulting company]] that focused on both technology and management considerations.<ref name="pate-9ff"/>   Larry Michels, 48 years old at the time,    was an electrical engineer who had gone into the aerospace industry in Los Angeles.<ref name="nb-1992"/>  He had then founded a credit verification company, Credifier Corporation, which he sold to [[TRW Inc.]], for whom he subsequently served as a vice president for ten years.<ref name="scs-larry-obit">{{cite news | url=https://www.newspapers.com/image/92035341/ | title=Stroke Claims SCO's Founder | author-first=Jennifer | author-last=Pittman | newspaper=Santa Cruz Sentinel | date=November 13, 1999 | pages=A1, A14 | via=Newspapers.com}}</ref>  (Larry Michels was first cousin of another technology entrepreneur, [[Allen Michels]].<ref name="nyt-1991"/>)  Towards the end of that time, Michels became head of the Advanced Products Laboratory for [[TRW Electronics]],<ref>{{cite book | url=https://books.google.com/books?id=JcnuAAAAMAAJ&q=%22trw+vidar%22+larry+michels | title=Industrial Research Laboratories of the United States | editor=Jaques Cattell Press <!-- not a person, don't split up --> | publisher=National Research Council | year=1979 | edition=10th | page=552| isbn=9780835211352 }}</ref> and relocated to Santa Cruz to run it remotely from there.<ref name="scs-ms-1989"/><ref name="scs-larry-pd-notice">{{cite news | url=https://www.newspapers.com/clip/78405826/ | title=Remembrances: Notice: Lawrence Michels | newspaper=Santa Cruz Sentinel | date=November 12, 1999 | page=A-10}}</ref>

As part of this,<ref name="microtimes">{{cite news | url=https://books.google.com/books?id=HDA9AQAAIAAJ&q=trw+larry+michels | title=The Santa Cruz Operation: Taking Care Of Business With XENIX | author-first=Bennett | author-last=Falk | author2-first= Mary | author2-last=Eisenhart | magazine=MicroTimes | date=February 1987 | pages=46–54<!--end potentially up to 57-->}} At p. 48.</ref>  Michels was involved with a telephony business, [[TRW Vidar]].  This was a company, based in [[Mountain View, California]], that TRW had acquired and that was a part of TRW Electronics.<ref>{{cite news | url=https://books.google.com/books?id=dC07AAAAMAAJ&q=%22TRW+Electronics%22 | title=uncertain | work=Telephone Engineer & Management | date=1977 | page=61 (issue uncertain)}}</ref>  TRW Vidar was a pioneer in [[Telephone exchange#Digital switches|digital telephone switches]],<ref name="os-1989">{{cite news | url=https://www.orlandosentinel.com/news/os-xpm-1989-10-25-8910242656-story.html | title=Company thriving after switch in owners | author-first=Sarah | author-last=Oates | newspaper=The Orlando Sentinel | date=October 25, 1989 | pages=F-1, F-2}}</ref> and also an early user of [[Version 6 Unix]] in its development environment.<ref>{{cite news | url=http://www.ganssle.com/tem/tem159.htm | title=Editor's Notes | work=Embedded Muse | publisher=The Ganssle Group | date= April 7, 2008}}</ref>  Michels felt that TRW as a whole did not understand the rapid change that computers were bringing to businesses or what it had with Vidar – "They thought they were buying a telephony business, they thought that telephony was telephony, but they really were computers. Unless you approached them as being computers, you didn't end up with anything."<ref name="microtimes"/>  He then left TRW to do [[management consulting]] work,<ref name="nb-1992"/> thinking, as he later said, that "if TRW was having so much trouble, it was probably an interesting business [helping companies] go about making these transitions."<ref name="microtimes"/>  As a result of this connection, some have considered The Santa Cruz Operation to have been an offshoot of TRW Vidar.<ref>{{cite web | url=http://www.softpanorama.org/People/Torvalds/Finland_period/xenix_microsoft_shortlived_love_affair_with_unix.shtml | title=XENIX – Microsoft Short-lived Love Affair with Unix | author-first=Nikolai | author-last=Bezroukov | work=Softpanorama | date=July 28, 2019 | access-date=May 27, 2021}}</ref>

Doug Michels, 25 years old at the time,<ref name="nb-1992"/> had graduated from the [[University of California, Santa Cruz]] in 1976 with a degree from their department of computer and information science.<ref name="scs-ms-1989"/>  <!-- TODO did Doug study/use Unix at UCSC? "krns-1991" says yes, but need something more solid -->  He had then started his own consulting operation, focusing on technical work.<ref name="nb-1992">{{cite news | author-last=Barrier | author-first= Michael | title=How a California software firm is trying to open up the personal computer's future | magazine=Nation's Business | date=March 1992 | pages=14ff | via= Gale General OneFile <!-- (accessed March 29, 2021). --> | url= https://link.gale.com/apps/doc/A12025209/ITOF?u=wikipedia&sid=ITOF&xid=9c624330 }}</ref>

The two saw some commonalities in their consulting endeavors and decided to join forces to reduce overhead.<ref name="nb-1992"/>  They chose to stay in Santa Cruz both because of the relaxed lifestyle there and because the university would provide a ready supply of technically suitable employees.<ref name="scs-1988"/><ref name="nyt-1991"/>  By some sources The Santa Cruz Operation, Inc. was incorporated in January 1979.<ref>See for instance Doug Michels' Linked In page<!-- https://www.linkedin.com/in/dougmichels/ -->, which gives January 1979 as his start date with SCO.</ref> The name came from Larry Michels' time as head of the TRW advanced research group, when the remote outpost had been known as 'the Santa Cruz operation'.<ref name="scs-ms-1989"/>  The Michelses decided to use that for the name of their new firm,<ref name="scs-ms-1989"/> and the name was retained in the years that would follow because it told people where they were coming from.<ref name="scs-1983"/>

=== Unix porting company ===
[[Image:Downtown santa cruz, cropped.jpg|thumb|left|SCO's first offices were in downtown Santa Cruz, about {{frac|2|5}} of a mile distant along the right side of this viewpoint]]

Offices for the new firm were established at 500 Chestnut Street in the downtown area of Santa Cruz.<ref name="cw-1981"/><ref name="scs-1983"/>  But as Doug Michels conceded in a 2006 interview, in terms of what they would be doing, "We didn't really have an idea."<ref name="doug-video"/><!-- 00:04 -->  Pure consulting work held little ongoing appeal,<ref name="scs-1988"/> and the notion of helping large businesses manage rapid technological change proved difficult in practice.<ref name="microtimes"/>

However, the Michelses soon became intrigued by the [[Microprocessor chronology|microprocessor revolution]] then underway, in which computer systems based on processors such as the [[Intel 8080]] or the [[Zilog Z80]] could be put together much quicker than the [[Minicomputer|minicomputers]] of the past.<ref name="doug-video"/><!-- 00:18 -->  In the consulting work they did, SCO was dealing with various resellers and small time-sharing companies in helping those companies formulate their technology strategies.<ref name="doug-video"/><!-- 01:50, 02:20 --> The people at SCO had, and further acquired, a familiarity with the [[Unix operating system]] and its potential for use in the business world.<ref name="microtimes"/><ref name="pate-9ff"/>  By early 1981, SCO was selling a report analyzing Unix features and availability based on a poll it had taken of over sixty members of the /usr/group association.<ref name="cw-1981">{{cite news | url=https://books.google.com/books?id=NxcYP0D6EBsC&q=%22santa+cruz+operation%22+chestnut+street&pg=PA6 | title=AT&T's 'C' Called Flexible Language | author-first=Brad | author-last=Schultz | newspaper=Computerworld | date=February 23, 1981 | page=6}}</ref>

Moreover, people at SCO realized that since Unix was portable and not controlled by any hardware manufacturer, use of it could allow microprocessor-based system manufacturers to avoid having to develop a proprietary operating system of their own, which they had neither the time nor the expertise to do.<ref name="doug-video"/><!-- 00:45 -->  Accordingly, the company decided to focus on custom jobs of [[porting]] the Unix system and applications that ran on it.<ref name="pate-9ff"/>  [[Eric S. Raymond]], in his book ''[[The Art of Unix Programming]]'' (which places the start of SCO in 1978<!-- "scs-1983" also implies that SCO started in 1978, but the person being interviewed wasn't either Michels and may thus have gotten it wrong ... another possibility is the Michelses started coalescing the two consulting operations gradually, as per "nb-1992", and that some of that took place in 1978 before incorporating in 1979 -->), calls SCO the "first Unix company",<ref name="esr-art">{{cite book
  | last = Raymond
  | first = Eric S.
  | author-link = Eric S. Raymond
  | title = The Art of UNIX Programming
  | publisher = Addison-Wesley Professional
  | year=2003
  | pages=35, 36, 43
  | url = http://www.catb.org/~esr/writings/taoup/html/ch02s01.html#id2879627
  | isbn = 978-0-13-142901-7}}</ref> although [[Interactive Systems Corporation]], which put out the first commercial Unix release (as a base for office automation systems) in 1977, perhaps has a stronger case.<ref name="unleashed"/><ref name="pcm-unixintel-1993"/>

The first Unix-based operating system that SCO made is for the [[PDP-11]], is named DYNIX (not to be confused with [[DYNIX|a same-named Unix variant]] later made by [[Sequent Computer Systems]]), and is based on [[Seventh Edition Unix]].<ref name="pate-9ff"/>   It supports the [[Tymshare]] service and by early 1981 was included in Tymshare's DYNASTY computer system offering.<ref>{{cite conference | author-first=James F. | author-last=Elwell | date= 1982 | contribution= An approach to the definition and implementation of a software development environment | title=Proceedings of the June 7–10, 1982, national computer conference (AFIPS '82) | publisher= Association for Computing Machinery | pages= 309–318 | doi=10.1145/1500774.1500812 | doi-access=free | isbn=0-88283-035-X }} At p. 315.</ref><ref>{{cite news | url=https://books.google.com/books?id=hKPjAAAAMAAJ&q=%22santa%20cruz%20operation%22 | title=Introducing the TYMSHARE DYNASTY/DYNIX Family | work=EDUCOM Bulletin | date=Winter 1981 | page=32}} Advertisement.</ref>  SCO also did a Unix port to the [[LSI-11]] variant of the PDP-11.<ref name="pate-9ff"/>

[[Xenix]] is a Seventh Edition Unix-based version of the operating system that [[Microsoft]] worked on, initially for the PDP-11.<ref name="pate-9ff"/> SCO first began working with Xenix in 1981.<ref name="scs-ms-1989"/> In 1982, Microsoft and SCO forged a joint agreement for development and technology exchange, with the two companies' engineers working together on improvements to Xenix.<ref name="pate-9ff"/>  (Microsoft was still a small company at the time, with perhaps 25 or 50 employees.<ref name="doug-video"/><!-- 12:40 -->)  Microsoft and SCO then further engaged [[Human Computing Resources]] in Canada, and the [[Logica#Software Products Group, Rapport, and Xenix|Software Products Group within Logica]] in the United Kingdom, as part of making further improvements to Xenix and porting Xenix to other platforms.<ref name="pate-9ff">{{cite book | author-first=Steve D. | author-last=Pate | title=UNIX Internals: A Practical Approach | publisher=Addison Wesley Professional | location=New York | date=1996 | pages=9–11}}</ref>  In doing so, Microsoft gave HCR and Logica the rights to do Xenix ports and license Xenix binaries in those territories.<ref name="doug-video">{{cite news | url=https://www.santacruztechbeat.com/2016/04/21/watch-doug-michels-sco/ | title=Watch: A look-back conversation with Doug Michels, co-founder of SCO | author-first=Sara | author-last=Isenberg | newspaper=Santa Cruz Tech Beat | date=April 21, 2016}} Interview itself published by BayLive Media, conducted by Jean-Baptiste Su, and is almost certainly from August 2006 at SCO Forum in Las Vegas.</ref>

In 1983, SCO made a technically difficult port of Xenix to the ''unmapped'' [[Intel 8086]] processor (earlier 8086 Xenix ports required an off-chip [[memory management unit|MMU]]) and licensed rights from Microsoft to be able to ship its packaged Unix system, Xenix, for the [[IBM PC XT]].<ref>{{cite conference
  | first = John Bruno
  | last = Hare
  |author2-first=Dean | author2-last=Thomas
   | title = Porting Xenix to the Unmapped 8086
  | book-title = Proceedings of the USENIX Winter Conference
  | publisher = USENIX Association
  | year = 1984
  | location = Washington, D.C.
  }} Abstract may be seen at in [https://archive.org/details/login_dec83_issue_201604/page/n25/mode/2up this December 1983 isssue of '';login:'', page 26].</ref>  This work takes advantage of earlier porting and compilers work that [[Altos Computer Systems]] had done for the mapped 16-bit Intel architecture.<ref name="doug-video"/><!-- 07:15, 08:00 --> The resulting system is binary compatible with, and can run applications built for, Altos Xenix systems, and was a successful venture for SCO.<ref name="doug-video"/><!-- 07:15, 08:00 -->

[[Image:Apple LISA 2 (1984).jpg|thumb|right|Museum label for the Apple Lisa notes that it could run Xenix; that was SCO's first shrink-wrapped product.]] 
Somewhat in parallel with that, SCO and Microsoft also developed the [[68000]]-based Xenix port for the [[Apple Lisa]].<ref name="pate-9ff"/>  It has multiuser capability as well as support for [[virtual terminal]]s for single users.<ref name="iw-unix-pc">{{cite news|title=Can Unix ever fit personal computers?|url=https://books.google.com/books?id=2i8EAAAAMBAJ&pg=PA42|date= December 26, 1983 |magazine=InfoWorld|pages=40–42|issn=0199-6649|author-first=John|author-last=Markoff}} Issue joint dated to January 2, 1984.</ref>  SCO also sold applications for Xenix on Lisa, including a [[Uniplex (office suite)|Uniplex]] word processor, the [[Multiplan]] spreadsheet from Microsoft, [[Level II COBOL]] from [[Micro Focus]], and the [[IBM Informix|Informix]] database software from [[Relational Database Systems]].<ref name="iw-unix-pc"/><ref name="scs-1984"/><ref>{{cite news | url=https://books.google.com/books?id=zC4EAAAAMBAJ&pg=PA18 | title=Is There Any Unix Software? | magazine=InfoWorld | date=April 15, 1985 | pages=17–18}}</ref>  While the Lisa was not a success in the personal computer marketplace, its powerful-for-its-price-point processor combined with a relatively inexpensive operating system gave third-party vendors an attractive platform for building systems to compete with minicomputers, and SCO sold several thousand copies of Xenix for the Lisa.<ref name="doug-video"/><!-- 05:00 -->  This was the first [[shrink-wrapped]] binary product sold by SCO, and its sales convinced SCO of the potential of that kind of product.<ref name="pate-9ff"/>

A third target of SCO's Xenix porting work was the [[DEC Professional 350]].<ref name="scs-1984"/>  As Larry Michels said in early 1984, "SCO will continue offering custom XENIX adaptions to the large OEM market – the Original Equipment Manufacturers – who make up SCO's established customer base."<ref name="scs-1984"/> SCO also sold Unix training.<ref name="scs-1984"/>

By September 1983, SCO had around 60 employees and was already expanding into a second office, at 1700 Mission Street in Santa Cruz.<ref name="scs-1983">{{cite news | url=https://www.newspapers.com/image/62888242/?terms=%22santa%20cruz%20operation%22%20%22harvey%20west%22&match=1 | title=Product of intelligence up for sale | newspaper=Santa Cruz Sentinel | date=September 18, 1983 | page=54 | via=Newspapers.com}}</ref><ref>{{cite book | url=https://books.google.com/books?id=XQFTAAAAMAAJ&q=%22santa+cruz+operation%22+%221700+mission+street%22 | title=IEEE Membership Directory | publisher=Institute of Electrical and Electronics Engineers | year=1989 | page=1484}}</ref>  While some of SCO's staff had studied computer science, others were coming from backgrounds in linguistics, sociology, psychology, or business.<ref name="scs-1983"/>

==Middle history==
=== Growth years with Xenix on Intel ===

In early 1984, Microsoft and SCO issued a joint announcement about SCO's rights to distribute Xenix within the United States.<ref name="scs-1984">{{cite news | date=February 2, 1984 | url=https://www.newspapers.com/image/66188574/?terms=%22santa%20cruz%20operation%22%20michels&match=1 | title=SCO obtains distribution rights for XENIX | newspaper=Santa Cruz Sentinel | page=10 (Computer Festival '84 supplement) | via=Newspapers.com}}</ref> SCO Xenix for the PC XT shipped sometime in 1984 and contains some enhancements from [[4.2BSD]] Unix, [[Micnet]] local area networking, and multiuser support.<ref name="pate-9ff"/>  In 1985, SCO worked with AT&T and Microsoft to test conformance with the [[System V Interface Definition]] (SVID), one of the early Unix standardization efforts.<ref name="pate-9ff"/>

In October 1985, SCO announced the availability of Xenix System V for the [[Intel 8088]]-based [[IBM PC XT]] and the [[Intel 80286]]-based [[IBM PC AT]] and [[IBM PC XT]].<ref name="cw-1985">{{cite news | url=https://books.google.com/books?id=w3IudMVoEusC&pg=RA1-PA54 | title=Xenix System V debuts for IBM micros | newspaper=Computerworld | date=October 7, 1985 | page=54}}</ref> The product can support ten remote users via serial ports and was sold with optional packages for software development in C or [[assembly language]] and for text processing.<ref name="cw-1985"/>  There had been concern within SCO about the business chances of the 80286 product, since IBM had elected to come to market with their own Unix.<ref name="doug-video"/><!-- 08:58, 10:40 -->  But that IBM effort, contracted to [[Interactive Systems Corporation]] and called [[PC/IX]], resulted in a product that was unsuccessful.<ref>{{cite news | first=Peter H. | last=Salus | title=Nearly 20 Years ago in Usenix | magazine= <!-- name has punctuation -->  <code>;login:</code> <!-- --> | publisher= | date= December 2003 | url=http://www.usenix.org/publications/login/2003-12/openpdfs/salus.pdf | archive-url=https://web.archive.org/web/20040826131925/http://www.usenix.org/publications/login/2003-12/openpdfs/salus.pdf | archive-date=August 26, 2004 | page=68}}</ref>

[[Image:SCO Xenix System V boot-up screen.png|thumb|right|SCO Xenix System V boot-up screen]]

There had been considerable skepticism in the industry that Unix could ever establish a successful market position on the PC.<ref name="iw-unix-pc"/>  These included beliefs that Unix was inherently large and complex enough that it needed a minicomputer, the platform on which it had been developed, in order to run effectively.<ref name="nb-1992"/> As Larry Michels said in early January 1991, "We had all the problems of being ahead of the market."<ref name="nyt-1991"/>  The company had never been adequately funded, as venture capitalists were unenthused by the idea of Unix on a PC; cash flow problems resulted and the Michelses used much of their personal savings to keep the company in business.<ref name="nyt-1991"/><ref name="nb-1992"/>  A key turning point was when [[Compaq Computer]] began shipping systems with Unix installed and chose SCO to be their provider.<ref name="nyt-1991"/>

Larry Michels tended to focus on the business aspects of the company while Doug Michels focused on technology facets; together they became recognized as pioneers of the Unix-on-PC industry.<ref name="scs-larry-obit"/>  Larry Michels was president of SCO and Doug Michels was, as Larry put it, "the number-two person", usually with the title of executive vice-president, but both employees and outside investors were encouraged to treat the two as an indivisible team.<ref>{{cite news | url=https://www.inc.com/magazine/19900401/5121.html | title=Fathers and Sons | author-first=Ellen | author-last=Wojahn | magazine=Inc. | date=April 1990}}</ref>

In December 1986, SCO acquired the Software Products Group division of Logica.<ref>{{cite news | url=https://books.google.com/books?id=gjwEAAAAMBAJ&pg=PA33 | title=Santa Cruz Operation Ltd. to Offer Source for Xenix | magazine=InfoWorld | date=December 8, 1986 | page=33}}</ref>  It became a wholly owned subsidiary, the Santa Cruz Operation Limited, and the basis for SCO's UK operation,<ref name="scs-acq">{{cite news | url=https://www.newspapers.com/image/71344774/?terms=%22santa%2Bcruz%2Boperation%22%2Blogica | title=Around the county: Software firm announces changes | newspaper=Santa Cruz Sentinel | date=7 December 1986 | page=D-1 | via=Newspapers.com}}</ref><ref name="doug-video"/> with its office subsequently being relocated first to <!-- 18 Noel Street --> [[Soho]]<ref>{{cite news | url=https://books.google.com/books?id=Sj0EAAAAMBAJ&pg=PA38 | title=This is ... | magazine=InfoWorld | date=9 November 1987 | page=38}} Advertisement.</ref> and then to [[Watford]] outside London.<ref>{{cite news <!--| BD https://www.cbronline.com/news/santa_cruz_operation_replaces_8086_operating_system_with_personal_xenix/ --> | title=Santa Cruz Operation Replaces 8086 Operating System with Personal Xenix | work=[[Computergram International]] | publisher=Computer Business Review | date=2 April 1989}}</ref>  <!--TODO cn Gary Daniels, Steve Brophy, Bill Bateson, Geraint Davies, and Peter Kettle headed this group, running European development operations. The European arm of SCO grew rapidly to about 40% of SCO's worldwide revenues. -->  By 1993, almost half of SCO's revenues came from outside North America, and of that, almost half came from the United Kingdom.<ref name="scs-adv-1993"/>

In 1987, the company brought out the SCO Xenix 386 Toolkit, which allowed developers to start coding applications and device drivers for the new [[Intel 80386]] processor in addition to the existing 80286.<ref name="pate-9ff"/>  Later that year, SCO's full release of Xenix for 80386 was made; the chip was powerful enough that Xenix running on it could handle some 30 different users.<ref name="scs-1988"/>  SCO provided some basic applications with Xenix.<ref name="scs-1988"/>  But the real value came from the 1,700 other applications that had been developed by [[value-added reseller]]s (VARs) and [[independent software vendor]]s (ISVs) for the platform, including such domains as auto parts management, medical accounting, bakery process control, and many others.<ref name="scs-1988"/>  As one retrospective look characterized it, Xenix served "as a workhorse for small businesses – places where you might find a dozen or so dumb terminals and a couple of printers plugged into a system running [a] small database system. It's simple, small and stable."<ref>{{cite news | url=https://www.linuxjournal.com/article/2062 | title=The Death of Xenix | author-first=Evan | author-last=Leibovitch
 | magazine=Linux Journal | date=March 1997}}</ref>

[[Image:SCO offices in Santa Cruz California August 1997.jpg|thumb|left|upright=1.25|The main SCO offices, at 425 (left) and 400 Encinal Street in the Harvey West area of Santa Cruz, California, as seen in 1997. Behind the buildings are the hills and Pogonip trails.]]

By early 1987, SCO had relocated its offices to a building at 400 Encinal Street in an industrial park in the Harvey West area of Santa Cruz<ref>{{cite news | url=https://www.newspapers.com/image/70679798/?terms=%22santa%20cruz%20operation%22%20encinal&match=1 | title= Accounting | newspaper=Santa Cruz Sentinel | date=February 22, 1987 | page=C-1 | via=Newspapers.com}} Advertisement.</ref> (the building had been previously occupied by Intel).<ref name="sarai-rem"/>  As of a year later, SCO employed some 500 people, mostly in Santa Cruz, and had plans to build a new office building there.<ref name="scs-1988"/>  By early 1991, that new building, 425 Encinal Street, was holding an open house event for prospective employees.<ref>{{cite news | url=https://www.newspapers.com/image/66034316/?terms=%22santa%20cruz%20operation%22%20%22425%20encinal%20street%22&match=1 | title=Open House | newspaper=Santa Cruz Sentinel | date=April 21, 1991 | page=B-12 | via=Newspapers.com}} Advertisement.</ref>  The company subsequently established offices in several other buildings in the Harvey West area.<ref name="sarai-rem"/>  These included 324 Encinal Street,<ref name="motif-faq"/> 150 Dubois Street,<ref name="sarai-rem"/> and 100 Pioneer Street.<ref name="ar-1996"/>

By the late 1980s, fed by strong computer science program that emphasized Unix design and a robust internship program at SCO, some 50 to 60 percent of SCO employees were UC Santa Cruz graduates.<ref name="scs-1988">{{cite news | url=https://www.newspapers.com/image/67976907/?terms=trw%20advanced%20products%20laboratory&match=1 | title=Firm has a megabyte of future | author-first=Maria | author-last=Gaura | newspaper=Santa Cruz Sentinel | date=February 7, 1988 | page=D1 | via=Newspapers.com}}</ref><ref name="scs-ms-1989"/>  SCO now employed some 800 people overall, mostly in its Santa Cruz offices but also in the UK office and in one in Washington, D.C.<ref name="scs-ms-1989">{{cite news | url=https://www.newspapers.com/image/70662415/ | title=SCO, local software firm, hooks up with Microsoft | author-first=Steve | author-last=Shender | newspaper=Santa Cruz Sentinel | date=February 16, 1989 | pages=A1, A12 | via=Newspapers.com}}</ref>  By early 1989, SCO had sold some 350,000 copies of Xenix in total, mostly through its channel.<ref name="scs-ms-1989"/>  The company was achieving what the ''[[Santa Cruz Sentinel]]'' termed "explosive growth".<ref name="scs-ms-1989"/>

SCO would subsequently reorient its product on a later technology base.<ref name="pate-9ff"/>  However Xenix comprised the largest installed base of any of the early commercial variants of Unix;<ref name="rosen-etal"/> it remained a good seller among some customers<ref name="iw-odt-1990"/> and SCO releases of Xenix continued until Xenix/386 version 2.3.4 was put out in 1991.<ref name="pate-9ff"/>

===Relations with Microsoft===
Microsoft's level of commitment to Xenix was always viewed with some suspicion within the industry.<ref>{{cite news |author-first=Laurie |author-last=Flynn |date=April 24, 1995 |title=The Executive Computer |newspaper=The New York Times| url=https://www.nytimes.com/1995/04/24/business/information-technology-the-executive-computer.html | page=D4}}</ref>  It later became clear that by the mid-1980s, Microsoft was losing interest in Xenix from their own business perspective,<ref name="esr-art"/> both due to the cost of licensing it from AT&T and because [[MS-DOS]] was rapidly taking off as a product.<ref name="sjvn-2003"/>   <!--TODO Thus SCO ... what was I going to add here? -->

In February 1989, it was announced that Microsoft was taking a minority investment in SCO by buying an amount less than 20 percent of that company.<ref>{{cite news | url=https://timesmachine.nytimes.com/timesmachine/1989/02/16/870689.html | title=Microsoft Stake in Unix Maker | newspaper=The New York Times | date=February 16, 1989 | page=D5}}</ref> The terms of the agreement, which were not publicly disclosed,<ref name="scs-ms-1989"/> provided SCO with funds that it acutely needed in order to continue to expand in its rapidly growing market.<ref name="iw-ms-1989">{{cite news | url=https://books.google.com/books?id=JzoEAAAAMBAJ&q=microsoft+sold+xenix+to+sco&pg=PT4 | title=Microsoft Says It Will Purchase Portion of SCO | author-first=Scott | author-last=Mace | magazine=InfoWorld | date=February 20, 1989 | page=5}}</ref>  The deal put a Microsoft executive on SCO's board of directors;<ref name="nyt-1991"/>   that executive, Microsoft's chief financial officer Frank Gaudette, would play an important role in guiding SCO to become a mature enterprise.<ref name="scs-diff-1993"/>  The deal contained provisions to prevent Microsoft from exercising dominant control over the smaller SCO.<ref name="nyt-1991"/>  By some accounts, the Microsoft board member often had to be asked to leave discussions when the topic became how SCO could best compete with Microsoft.<ref name="coursey-bad">{{cite news | url=https://www.eweek.com/servers/sco-when-bad-things-happen-to-good-brands | title=SCO: When Bad Things Happen to Good Brands | author-first=David | author-last=Coursey | magazine=eWeek | date= June 15, 2004}}</ref>  Already on the board since 1987 was another Microsoft veteran, Jim Harris,<ref name="scs-diff-1993"/> who had been a leader of Microsoft's OEM sales efforts.<ref>{{cite news | url=https://books.google.com/books?id=kC4EAAAAMBAJ&pg=PA13 | title=Microsoft to release two versions of MS-DOS | author-first=Peggy | author-last=Watt | magazine=InfoWorld | date=April 2, 1984 | page=13}}</ref>

{{Quote box|quote=We had a very long relationship with Microsoft. We were partners, we were competitors, they invested in us, at one point they owned [around 20 percent] of the company, we licensed technology from them, we had lawsuits with them, we had every type of relationship with Microsoft you can imagine.|source=—Doug Michels, 2012.<ref name="patch-heyday-2012"/>
|width=27%|align=left|style=padding:8px;}}
 
Microsoft's motivation for the purchase has been variously explained as a desire to keep a Xenix technology partner,<ref name="iw-ms-1989"/> as a hedge against the growth of Unix,<ref name="nyt-1991"/> and as a hedge against the [[Open Software Foundation]].<ref name="sjvn-2003"/>  Yet another explanation was the one given by Larry Michels in 1991, making reference to the SCO Unix product then being sold: "The paradox is if you were Microsoft, Open Desktop isn't something you want to see succeed. But if it doesn't, something else will, and they would rather see Open Desktop than whatever that would be. We pay them royalties."<ref name="nyt-1991"/>

Later figures stating the amount that Microsoft actually owned included 16 percent,<ref name="scs-adv-1993"/><ref name="sjvn-2003"/> 14 percent,<ref name="cweek-1994"/> and 11 percent.<ref name="wsj-1997"/>  Microsoft did not fully exit its position in SCO until 2000.<ref name="sjvn-2003">{{cite news | url=https://www.linux.com/news/understanding-microsoft-sco-connection/ | title=Understanding the Microsoft-SCO connection | author-first=Steven J. | author-last=Vaughan-Nichols | publisher=Linux.com | date=May 22, 2003 | access-date=April 3, 2021}}</ref>

In any case, intellectual property rights were not transferred in the 1989 agreement and SCO would continue to pay Microsoft royalties for Xenix and Unix technologies.<ref name="nyt-1991"/>  Not until 1997 was SCO able to reach an agreement with Microsoft that relieved SCO of the obligation to include Microsoft code, and pay royalties on that code regardless of whether it was used or not, in SCO products.<ref name="wsj-1997">{{cite news | author-first=Don | author-last=Clark | title=Microsoft Agrees to Free Software Rival from Paying Royalties on Unix System | newspaper=The Wall Street Journal | date= November 24, 1997 | page=B10 | url= https://www.proquest.com/docview/398649518 | id={{ProQuest|398649518}} }}</ref>  And that only came after SCO filed a complaint against Microsoft for violating [[European Union competition law]], a complaint that was ruled valid by the [[European Commission]].<ref>{{cite news | url=https://www.latimes.com/archives/la-xpm-1997-nov-25-fi-57402-story.html | title=Microsoft Alters Deal to End EU Dispute | agency=Bloomberg News | newspaper=Los Angeles Times | date=November 25, 1997}}</ref>

=== SCO UNIX and Open Desktop===
Needing to create a product from a more recent branch from the Unix family tree, [[UNIX System V#SVR3|Unix System V Release 3]], SCO, together with Microsoft and [[Interactive Systems Corporation]], worked during 1987 and 1988 to develop the [[UNIX System V#SVR3|System V/386 Release 3.2]] version, which adds the ability to run existing Xenix binary applications on System V without requiring recompilation.<ref name="pate-9ff"/><ref name="rosen-etal"/> This capability makes use of the new [[Intel Binary Compatibility Standard]] (iBCS), developed by Intel, AT&T, and SCO.<ref>{{Cite news |title=Binary Unix 386 Standard to Be Revised |author=Scott Mace |newspaper=InfoWorld |date=27 August 1990 |url=https://books.google.com/books?id=7zsEAAAAMBAJ&pg=PT4}}</ref>  The AT&T release of System V/386 Release 3.2 was announced at [[SCO Forum]] in 1988, but further work was needed by SCO to incorporate Xenix device drivers before SCO could release it as a product.<ref>{{cite news | url=https://books.google.com/books?id=iDoEAAAAMBAJ&pg=PA25 | title=AT&T's Unix/Xenix Merged Product Ready for Delivery | author-first=Martin | author-last=Marshall | magazine=InfoWorld | date=August 29, 1988 | page=25}}</ref>

[[SCO UNIX]], full name SCO UNIX System V/386 Release 3.2.0, had first customer ship in June 1989;<ref name="bwire-1989">{{cite press release | url=https://www.proquest.com/docview/447098614 | title=SCO UNIX System V/386 Release 3.2 Ships | author-last=Zaballos | author-first=Zee | publisher=Business Wire | date=June 30, 1989 | id={{ProQuest|447098614}} }}</ref> this became the basis for commercial successor to SCO Xenix.  Based on an agreement forged with AT&T the previous year, it was also the first SCO operating system to carry the 'Unix' word itself in the product name.<ref name="pate-9ff"/>
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|caption=SCO revenues by year (in millions of dollars)<ref name="nyt-1991"/><ref name="krns-1991"/><ref name="ar-1996">{{cite web | url=https://sec.report/Document/0000891618-96-003164/ | title=Form 10-K, The Santa Cruz Operation, Inc. for the Fiscal Year Ended September 30, 1996 | publisher=U.S. Securities and Exchange Commission | location=Washington, D.C. | date=December 24, 1996}}</ref><ref name="ar-2000">{{cite web | url=https://sec.report/Document/0000950134-00-010557/ | title=Form 10-K, The Santa Cruz Operation, Inc. for the Fiscal Year Ended September 30, 2000 | publisher=U.S. Securities and Exchange Commission | location=Washington, D.C. | date=December 18, 2000}}</ref>
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In early 1990, the integrated product [[SCO Open Desktop]] began shipping.<ref name="ci-odtships-1990"/>  It features on top of SCO UNIX System V/386 several critical functionalities: a [[graphical user interface]] based on the [[X Window System]] and [[Open Software Foundation]] [[Motif (software)|Motif toolkit]]; [[TCP/IP]] networking; support for the [[Network File System|NFS]] network file system and [[OS/2 LAN Manager]]; database support; and [[Merge (software)|Merge 386]] for running DOS-based applications.<ref name="pate-9ff"/><ref name="iw-odt-1989"/><ref name="nyt-1991"/>   Regarding OSF Motif, this is its first appearance in a commercial product,<ref name="iw-odt-1989">{{cite news | url=https://books.google.com/books?id=GzoEAAAAMBAJ&q=sco+%22open+desktop%22+1989&pg=PT7 | title=SCO Announces Implementation of OSF's Motif | author-first=Rachel | author-last=Parker | magazine=InfoWorld | date=March 6, 1989 | page=8}}</ref> and Open Desktop became the first graphical Unix for an Intel 32-bit processor that was packaged in shrink-wrapped form.<ref name="pcm-1992"/>

SCO used technology partners for much of this work.  The graphical desktop itself is the [[X.desktop]] one from [[IXI Limited]];<ref>{{cite press release | title=IXI Limited's X.desktop to be included in SCO open desktop | publisher=PR Newswire | date= June 21, 1989 <!--, 0621NE001. --> | via= Gale General OneFile <!-- (accessed April 4, 2021). --> | url= https://link.gale.com/apps/doc/A7365134/ITOF?u=wikipedia&sid=ITOF&xid=42c8046a }}</ref>  The TCP/IP networking stack and NFS implementation come from [[Lachman Associates]],<ref>{{cite news | url=https://techmonitor.ai/techonology/santa_cruz_signs_with_locus_for_ms_dos_x_window_software | title=Santa Cruz Signs With Locus for MS_DOS X-Window Software | work=Computergram International | date=January 2, 1989}}</ref> while [[Open Systems Interconnection]] software comes from [[Retix, Inc.]]<ref>{{cite news | url=https://techmonitor.ai/techonology/santa_cruz_operation_goes_to_retix_for_open_systems_interconnection_software | title=Santa Cruz Operation Goes to Retix for Open Systems Interconnection Software | work=Computergram International | date=August 29, 1989}}</ref>  The relational database manager included is [[Ingres (database)|Ingres]].<ref name="ci-odtships-1990">{{cite news | title=Santa Cruz Operation's Open Desktop unit is ready to ship | work= Computergram International | date=February 9, 1990 <!--, CGI02090012.--> | via=Gale General OneFile <!--(accessed May 20, 2021).--> | url= https://link.gale.com/apps/doc/A8343999/ITOF?u=wikipedia&sid=ITOF&xid=89a47296}}</ref>  The Merge functionality comes from [[Locus Computing Corporation]].<ref>{{cite news | url=https://techmonitor.ai/technology/locus_wins_santa_cruz_agreement | title=Locus Wins Santa Cruz Agreement | work=Computergram International | date=August 22, 1991}}</ref>

Version 3.2.2 of SCO Unix and Open Desktop came out in mid-1990; it contains various fixes and improvements for problems found in the field.<ref name="iw-odt-1990">{{cite news | url=https://books.google.com/books?id=tjwEAAAAMBAJ&pg=PA51 | title=SCO Unix 3.2 Update Is Ready to Ship in July | author-first=Martin | author-last=Marshall | magazine=InfoWorld | date=June 18, 1990 | page=45}}</ref>  However, Open Desktop did not make inroads on the personal computer market, as SCO Unix's system resource requirements were strenuous and there were few commonly used PC applications available for it.<ref name="pcm-1992">{{cite news | url=https://books.google.com/books?id=HERlo0BgpGYC&pg=PT197 | title=32-Bit GUI Alternatives: No Contest | author-first=William F. | author-last=Zachmann | magazine=[[PC Magazine]] | date=April 28, 1992 | page=192}}</ref>

Beginning in the late 1980s, AT&T and [[Sun Microsystems]] worked on a merge of Xenix, [[BSD]], [[SunOS]], and System V Release 3 features, with the result being known as [[UNIX System V Release 4]].<ref name="rosen-etal"/> SCO UNIX and Open Desktop remained based on System V Release 3, but eventually added home-grown versions of a number of the features of Release 4.<ref name="pcm-unixintel-1993"/>

Initially supplemented by some engineers who transferred from SCO's headquarters operation in Santa Cruz,<ref name="scs-acq"/> the ex-Logica group in Watford became one of the major development sites for SCO and over the next few years did the operating system kernel development work behind the subsequent SCO OpenDesktop and SCO OpenServer product releases.<ref name="pate-9ff"/> It later did engineering work in networking, security, escalations, and other areas, in addition to being the sales, marketing, and customer engineering hub for SCO's [[EMEA]] region.<ref name="sec-10-k">{{cite web |url=https://www.sec.gov/Archives/edgar/data/1102542/000104746903003091/a2101798z10-k.htm |title=Form 10-K: For the fiscal year ended October 31, 2002: Caldera International, Inc. |publisher=Securities and Exchange Commission |date=27 January 2003}}</ref>

SCO acquired the Toronto, Canada-based [[HCR Corporation]] in 1990.<ref>{{cite news|title=Not 'the Toronto Operations'?|url=https://books.google.com/books?id=wDlUmfY9nQsC&q=toronto+hcr+acquisition+sco&pg=PT102|access-date=September 24, 2016|work=Computerworld|date=May 14, 1990}}</ref> Since their interactions in the early Xenix days, HCR had become Canada's leading commercial Unix platform developer.<ref>{{cite news|last1=Dvorak|first1=John|title=Inside Track|url=https://books.google.com/books?id=7y8EAAAAMBAJ&q=%22HCR%22+%22Toronto%22+%22Unix%22&pg=PA38|access-date=September 24, 2016|work=Computerworld|date=April 18, 1983}}</ref> The HCR acquisition allowed SCO to improve its development tools offerings, especially for  Open Desktop.<ref>{{cite news | url=https://books.google.com/books?id=MDsEAAAAMBAJ&pg=PT39 | title=News Wire: Santa Cruz Operation to Buy HCR Corp | magazine=InfoWorld | date=14 May 1990 | page=40}}</ref>  SCO Canada took over work on the Microsoft C compiler that dates back to Xenix days <!-- see for example https://books.google.com/books?id=WjoEAAAAMBAJ&pg=PT39 --> but can produce binaries for either Xenix or Unix.  In addition, the SCO Open Desktop Development System also offers the AT&T [[Portable C Compiler|pcc compiler]],<ref>{{cite news | url=https://books.google.com/books?id=MfbDrFwiARgC&pg=PA234 | title=SCO Open Desktop | author-first=Brian | author-last=Seirup | magazine=[[PC Magazine]] | date= May 31, 1994 | pages=232, 234}}</ref> here called rcc, but it can only compile for Unix.<ref name="scosales-binaries-1990">{{cite web | url=https://www.scosales.com/ta/kb/100227.html | title=SCO UNIX System V/386 Development System binary types & conversions | work=SCO TA #100227 | publisher=Computer Business Consultants | date=January 29, 1990 | access-date=May 17, 2021}}</ref>  SCO Canada continued to sell HCR's [[Cfront]]-based C++ product, which by 1991 had an estimated 450 licensed sites using it.<ref>{{cite book | url=https://apps.dtic.mil/dtic/tr/fulltext/u2/a243998.pdf | archive-url=https://web.archive.org/web/20200327002153/https://apps.dtic.mil/dtic/tr/fulltext/u2/a243998.pdf | url-status=live | archive-date=March 27, 2020 | title=Availability of Ada and C++ Compilers, Tools, Education, and Training  | publisher=Institute for Defense Analysis | location=Alexandria, Virginia | date=July 1991 | page=C-10}}</ref>  The Toronto site also took on some porting and integration work.<ref>{{cite web | url=https://www.scosales.com/ta/kb/101286.html | title=Technical Advisory: Can OpenServer 5 access NetWare 4.1 servers as they support NDS and we do not? | publisher=Santa Cruz Operation | date= January 3, 1996}}</ref>

[[Image:SCO System V Directory - The Guide to Software, Hardware, and Services for the SCO System V Environment - Expanded for 1990 - side view.jpg|thumb|left|upright=0.67|A thick volume: ''Guide to Software, Hardware, and Services for the SCO System V Environment'', 1990]]

SCO had a large technical publications operation at this time, with substantial staffing in each of the Santa Cruz, Toronto, and Watford offices, who as a group published on the order of 30,000 pages of documentation on a 18-month release cycle.<ref name="stross-p5">{{cite web | url=http://www.antipope.org/charlie/blog-static/2009/06/how_i_got_here_in_the_end_part_3.html | title=How I got here in the end, part five: 'things can only get better!' | author-first=Charles | author-last=Stross | publisher=antipope.org | date=June 19, 2009}}</ref>  One of the tech writers at Watford from 1991 to 1995 was science-fiction author [[Charles Stross]],<ref name="stross-p5"/> and his experiences in that office would provide some of the setting for his 2000s work ''[[The Atrocity Archives]]''.<ref>{{cite web | url=http://www.antipope.org/charlie/blog-static/2013/05/crib-sheet-the-atrocity-archiv.html | title=Crib Sheet: The Atrocity Archive(s) | author-first=Charles | author-last=Stross | publisher=antipope.org | date= May 18, 2013}}</ref>

Collectively, Xenix and SCO UNIX became the most installed flavor of Unix due to the popularity of the [[x86]] architecture.  Hardware manufacturers that manufactured Intel-based systems and that resold a SCO operating system on it included not just Compaq but also [[Digital Equipment Corporation|DEC]], [[Tandy Computers]], [[Siemens Nixdorf]], [[Olivetti]], [[Unisys]], and [[Hewlett-Packard]].<ref name="nyt-1991"/>  Especially significant were those systems with multiprocessor capability, such as the [[Compaq SystemPro]],<ref name="nyt-1991"/> for which the SCO MPX multiprocessor extension to SCO UNIX had been delivered in 1990 based on development work that SCO did in conjunction with the firm Corollary, Inc.<ref>{{cite news | url=https://books.google.com/books?id=6sRfQxuIMUEC&pg=RA5-PA6 | title=Multiprocessor extension fans Compaq fires | author-first=Patricia | author-last=Keefe | newspaper=Computerworld | date=July 9, 1990 | page= 70}}</ref> This effort produced the first version of Unix to support the [[symmetric multiprocessing]] capability of Compaq's.<ref name="pate-9ff"/>

The primary market segment for SCO Unix was small businesses, such as real estate offices or florists to take two examples, where specialized dealers who were familiar with a particular application domain built or assembled customized software for that domain and then sold that as a turnkey solution to the business.<ref name="krns-1991"/>  SCO Unix was also used by chains such as [[Radio Shack]] and [[Taco Bell]].<ref name="krns-1991"/>

SCO capitalized on the increasingly prevalent [[Open system (computing)|"open systems" movement]] of the time, which held that a combination of [[interoperability]], [[software portability|portability]], and [[open standard|open software standard]]s should result in computer users should not being locked into any one computer company's product.<ref name="nyt-1991"/><ref name="nb-1992"/><ref name="scs-1992-b"/>  Moreover, Doug Michels became an effective and convincing advocate for the open systems idea.<ref name="nyt-1991"/>  The premise in SCO's case was that an industry standard operating system for industry standard hardware – capable of handling the kind of multi-tasking, multi-user workload that MS-DOS could not – would give customers a compelling offering that previously was thought only possible with considerably more expensive minicomputers.<ref name="nyt-1991"/><ref name="nb-1992"/> By early 1991, ''[[The New York Times]]'' was publishing a profile of SCO based around the notion that it might become "the next Microsoft".<ref name="nyt-1991">{{cite news | url=https://www.nytimes.com/1991/01/04/business/small-software-maker-is-taking-giant-steps.html | title=Small Software Maker Is Taking Giant Steps | author-first=Lawrence M. | author-last=Fisher | newspaper=The New York Times | date=January 4, 1991 | pages=D1, D4}}</ref>

===Applications and SCO Office Portfolio===
While SCO operating systems were often the basis of [[vertical market software]] offerings by others,<ref name="iw-tandy-1988">{{cite news | url=https://books.google.com/books?id=-j4EAAAAMBAJ&pg=PA32 | title=Tandy Plans Marketing Push for Xenix Products | author-first=Paula S. | author-last=Stone | date=June 6, 1988 | page=32}}</ref> SCO had long desired to create additional [[horizontal market software]] applications for its operating system product as part of further popularizing it.<ref name="krns-1991"/>  Thus SCO had provided some basic applications with Xenix, including database, graphics, a word processor, and a spreadsheet.<ref name="scs-1988"/>

In 1988, these applications were bundled together as part of an offering known as SCO Office Portfolio, which serves as an integrated environment for office automation on Xenix, SCO Unix, and SCO Open Desktop.<ref name="iw-tandy-1988"/><ref>{{cite web | url=https://www.scosales.com/ta/kb/102998.html | title=Versions of SCO Portfolio supported on SCO operating systems | work=SCO TA #102998 | publisher=Computer Business Consultants | date=June 2, 1993 | access-date=May 22, 2021}}</ref>  The portfolio primarily comprises SCO Lyrix, a word processor; SCO Professional, a spreadsheet; and SCO Integra, an SQL-based relational database.<ref name="ci-portfolio-1989">{{cite news | url=https://techmonitor.ai/techonology/santa_cruz_operation_replaces_8086_operating_system_with_personal_xenix | title=Santa Cruz Operation Replaces 8086 Operating System with Personal Xenix | work=Computergram International | date=April 2, 1989}}</ref>  The first two were developed by SCO<!--TODO double-check Lyrix -->,<ref name="cw-portfolio-ad"/> while SCO Integra is based on an SQL engine from [[Coromandel Industries]]<ref>{{cite news | url=https://books.google.com/books?id=izAEAAAAMBAJ&pg=PA14 | title=DOS SQL Engine for C Announced | author-first=Scott | author-last=Mace | magazine=InfoWorld | date=July 3, 1989 | page=14}}</ref> augmented by a [[Fourth-generation programming language|4GL]] called Accell from [[Unify Corporation]].<ref>{{cite news | url=https://books.google.com/books?id=DD8EAAAAMBAJ&pg=PT16 | title=SCO to Merge Xenix System V, Unify's 4GL Development Tools | author-first=Peggy | author-last=Watt | magazine=InfoWorld | date=February 8, 1988 | page=17}}</ref>

Linking them together was the SCO Manager, which has a character-based but multi-windowed interface.<ref name="iw-otherside-1989">{{cite news | url=https://books.google.com/books?id=XToEAAAAMBAJ&pg=PT51 | title=The Other Side: A Unix Vendor Looks at the PC LAN Market | author-first=Raphael | author-last=Needleman | magazine=InfoWorld | date=April 24, 1989 | page=S4}}</ref>   It provides desktop tools such as mail, calendaring, and chat; an expandable menu system; and a clipboard mechanism for transmitting information between applications.<ref name="ci-portfolio-1989"/><ref name="cw-portfolio-ad"/>  The system administration interface for SCO Unix itself also adopted the Portfolio Manager interface.<ref>{{cite news | url=https://books.google.com/books?id=wTsEAAAAMBAJ&pg=PT48 | title=SCO to Debut Security Control for SCO Unix | author-first=Scott | author-last=Mace | magazine=InfoWorld | date=November 14, 1988 | page=49}}</ref>

Early 1990 also saw the release of [[Microsoft Word]] version 5.0 for Xenix and SCO Unix, which was also available as part of SCO Office Portfolio.<ref name="iw-word-1990">{{cite news | url=https://books.google.com/books?id=dzAEAAAAMBAJ&pg=PP6 | title=SCO Begins Shipping Microsoft Word 5.0 for Unix and Xenix | author-first=Martin | author-last=Marshall | magazine=InfoWorld | date=January 8, 1990 | page=6}}</ref>  It has functionality equivalent to Word for DOS,<ref name="iw-word-1990"/> and was marketed to government agencies and other organizations running multiuser office systems.<ref name="pr-word-1990">{{cite press release | author-last=Morton | author-first= Janet L. | title=The Santa Cruz Operation Ships Microsoft Word 5.0 for AT&T 3B2 and 6386 Computers Running UNIX Systems | publisher= Business Wire | date= August 7, 1990 | url= https://www.proquest.com/docview/447072169 | id= {{ProQuest|447072169}} }}</ref>  This was followed in early 1991 by Word 5.1 for SCO Unix, which has graphical user interface support.<ref name="edge-word-1991">{{cite news | title=Microsoft Word: SCO announces Word for Unix Systems Version 5.1 | work=EDGE: Work-Group Computing Report | date=March 11, 1991 | page= 33 | via= Gale General OneFile <!--(accessed May 20, 2021).--> | url= https://link.gale.com/apps/doc/A10486452/ITOF?u=wikipedia&sid=ITOF&xid=f7901228}}</ref>  As part of adapting Word to Unix, SCO made various enhancements for multiuser support and workgroup-related features.<ref name="edge-word-1991"/>

SCO had visions of selling its applications on platforms other than its own.  In late 1988, SCO and Sun Microsystems announced that SCO Office Portfolio would be ported to [[Sun-3 workstation]]s running [[SunOS]].<ref>{{cite news | url=https://books.google.com/books?id=WSBVAAAAMAAJ&pg=RA23-PA13 | title=Industry News: Familiar Software Migrates to Unix | work=Computing News | publisher=University of Michigan Computing Center | date=1988 | page=13}}</ref><!-- also https://link.gale.com/apps/doc/A7019945/ITOF?u=wikipedia&sid=ITOF&xid=5d40cc8d -->  And in mid-1990, SCO made its Word for Unix available for [[AT&T 3B2]] and [[AT&T 6386]] systems.<ref name="pr-word-1990"/><ref name="edge-word-1991"/>

One of the offerings in the SCO Office Portfolio was SCO FoxBase+, a version of [[FoxBase]] that is explicitly purposed as a look-alike to the popular [[dBase III]] database software for MS-DOS.<ref name="iw-otherside-1989"/><ref name="iw-word-1990"/>  And even SCO's advertisements had called SCO Professional a "workalike" of the popular [[Lotus 1-2-3]] spreadsheet.<ref name="cw-portfolio-ad">{{cite news | url=https://books.google.com/books?id=TLCrPe3QfssC&pg=PA36 | title=Go Ahead, Make Your Day | newspaper=Computerworld | date=August 7, 1989 | page=36}} Advertisement; note also copyright notices at bottom.</ref>  This resulted in problems when, in July 1990, [[Lotus Development Corporation]] sued SCO for copyright infringement, as one of several such actions that Lotus took against its imitators and competitors.<ref>{{cite news | url=https://www.nytimes.com/1990/07/03/business/lotus-sues-2-on-copyright-violation.html | title=Lotus Sues 2 On Copyright Violation | author-first=John | author-last=Markoff | newspaper=The New York Times | date=July 3, 1990 | page=D1}}</ref>  The suit was settled out of court a year later; in a victory for Lotus, SCO agreed to stop all sales and licensing of SCO Professional and instead recommend that customers use 1-2-3.<ref>{{cite news | url=https://www.nytimes.com/1991/06/18/business/company-news-lotus-settles-suit-with-santa-cruz.html | title=Company News: Lotus Settles Suit With Santa Cruz | agency=Reuters | newspaper=The New York Times | date=June 18, 1991 | page=D4}}</ref><ref>{{cite news | author-last=Ould | author-first=Andrew | title=Win over SCO strengthens Lotus' hand in Borland suit | magazine= PC Week | date=June 24, 1991 | pages= 163ff | via= Gale General OneFile <!--(accessed May 22, 2021).--> | url= https://link.gale.com/apps/doc/A10897232/ITOF?u=wikipedia&sid=ITOF&xid=154ec848}}</ref>

In the end, SCO had neither the market share nor the sales ability to compete on applications with the major players in that area such as Microsoft and Lotus.<ref name="cweek-1994"/>  Accordingly, staffing level and expenses for application work were sharply reduced in 1991,<ref name="krns-1991"/> and again in 1993–94.<ref name="cweek-1994"/>  The final version of Microsoft Word for SCO Unix, for instance, was 5.1.1; it was eventually withdrawn as a product by SCO in 1996.<ref>{{cite web | url=https://www.scosales.com/ta/kb/110788.html | title=Microsoft Word for SCO UNIX terminates with a 'Signal 11 received' error when you try to save a document | work=SCO TA #110788 | publisher=Computer Business Consultants | date=January 26, 2000 | access-date=May 20, 2021}}</ref>

===ACE and near insolvency===
Besides Microsoft, venture capitalists owned about 20 percent of SCO by 1991, meaning that the Michelses owned a majority of the company,<ref name="nyt-1991"/><ref name="nb-1992"/> although by 1993 the Michelses' share was stated as being about one-third.<ref name="scs-adv-1993"/>  These venture capital firms included [[Morgan Stanley]], [[Accel Partners]], [[Chancellor Capital]], and [[Wolfensohn & Company]].<ref name="scs-adv-1993"/>

[[Image:SCO Canada office building Toronto.jpg|thumb|right|upright=0.67|SCO's Toronto development office was housed in this building (here seen several years after the site was shut down).]] 
During the late 1980s and early 1990s, analysts said that, given its revenue SCO should be more profitable than it was.<ref name="iw-ms-1989"/>  Indeed, SCO had never been able to show profits on a consistent basis;<ref name="krns-1991"/> through the end of fiscal 1991 SCO had accumulated a total loss of $31 million over its entire existence.<ref name="scs-adv-1993"/> SCO had high staffing levels, with for instance the $106 million revenue for 1990 going along with 1,300 employees, which was twice the level a typical software company of its era would have had.<ref name="nyt-1991"/>  One analyst said that SCO "is run like a university, a family-run university, not a company."<ref name="nyt-1991"/> Commenting on the company's efforts to write applications for Unix themselves, another analyst said "It's a company that attacks in all directions."<ref name="krns-1991"/> In part due to this kind of criticism, the Michelses said in late 1990 that they saw significant downsides to going public and preferred to remain private.<ref name="nyt-1991"/><ref name="nb-1992"/>  One former employee recalled that Larry Michels "ran SCO like it was a downhill skier racing out of control. He liked to think the company was literally like that – the fastest guy was always a little bit out of control. SCO was always a little out of control."<ref name="scs-larry-obit"/>

The late 1980s saw considerable interest in [[Reduced instruction set computer|RISC]]-based processor architectures in comparison to Intel's existing [[Complex instruction set computer|CISC]]-based approach, and there was particular interest in the [[R3000]] and [[R4000]] processors from [[MIPS Computer Systems]].<ref name="nyt-ace-1991"/>  Major hardware vendors such as [[Digital Equipment Corporation]] were switching over to RISC-based systems.

In April 1991, the [[Advanced Computing Environment]] initiative was announced.<ref name="nyt-ace-1991"/>  There were a number of companies involved, but in term of the major players, it consisted of Compaq, Microsoft, MIPS Computer Systems, DEC and the Santa Cruz Operation.<ref name="reg-ace-2013">{{cite news | url=https://www.theregister.com/2013/08/20/nt_at_20 | title=Windows NT: Remember Microsoft's almost perfect 20-year-old? | author-first=Andrew | author-last=Orlowski | work=The Register | date=August 20, 2013}}</ref>  It had the goal of building the next generation commodity computing platform around the MIPS processor.<ref name="nyt-ace-1991">{{cite news 
 | first = John
 | last = Markoff
 | author-link = 
 | title =  New Computer Alliance Forms
 | url = https://query.nytimes.com/gst/fullpage.html?res=9D0CE2DA1438F93BA35757C0A967958260
 | work = The New York Times
 | date = April 8, 1991
 | accessdate =
}}</ref>  Microsoft's role was to supply a version of [[OS/2]] for the processor<ref name="nyt-ace-1991"/> (this OS/2 version would become the basis of [[Windows NT]]).<ref name="reg-ace-2013"/>  SCO's job was to supply the Unix operating system for the processor.<ref name="nyt-ace-1991"/>  The work consisted of taking DEC's [[OSF/1]] variant of Unix as one starting point, SCO's Open Desktop as another, and adding in elements of DEC's previous [[Ultrix]] flavor, to produce a Unix for the ACE platform.<ref>{{cite news | url=https://techmonitor.ai/techonology/santa_cruz_operation_takes_over_decs_unix_development | title=Santa Cruz Operation Takes Over DEC's Unix Development | work=Computergram International | date=April 21, 1991}}</ref>  SCO created a top-level business unit within the company to focus on the ACE work and the expected market resulting from it.<ref>{{cite news | title=Reorg: SC forms product-line business units to address key open systems market. SCO key execs & org structure | work=EDGE: Work-Group Computing Report | date= June 10, 1991 | page= 2 | via= Gale General OneFile <!--(accessed May 22, 2021).--> | url= https://link.gale.com/apps/doc/A10826476/ITOF?u=wikipedia&sid=ITOF&xid=5a2740ef }}</ref>

But almost from the beginning, the ACE consortium was challenged by the difficulty of large, powerful companies with disparate interests working together; one German executive from a non-member company called ACE an "''eier-legende Wollmilchsau''" (egg-laying woolen milk pig).<ref>{{cite news | url=https://www.nytimes.com/1991/07/07/business/the-executive-computer-can-you-see-the-standards-through-the-fog.html | title=The Executive Computer: Can You See the Standards Through the Fog? | author-first=Peter H. | author-last=Lewis | newspaper=The New York Times | date=July 7, 1991 | page=6 (Section 3)}}</ref>  By November 1991, SCO's work was reported as six months behind schedule.<ref name="ci-ace-nov1991">{{cite news | url=https://techmonitor.ai/techonology/ace_unix_delay_may_clear_the_way_for_microsoft_on_intel | title=ACE Unix Delay May Clear the Way for Microsoft on Intel | work=Computergram International | date=November 24, 1991}}</ref>  At the same time, indications were reported in trade media, the business press, and the general press that the ACE project as a whole was in trouble.<ref name="ci-ace-nov1991"/><ref name="krns-1991"/><ref>{{cite news | author-first=Laurence | author-last=Hooper | title=Talks by Groupe Bull may Lead it to Quit ACE | newspaper=The Wall Street Journal | date=December 4, 1991 <!--, Eastern edition.--> | url= https://www.proquest.com/docview/398294152 | id={{ProQuest|398294152}} }}</ref>  In April 1992, a year after the start, the project fell apart; SCO publicly acknowledged that it had abandoned work on the Unix for MIPS and had withdrawn from the consortium, no longer confident that the project would succeed or was even necessary given improvements in CISC processor speed from Intel.<ref name="iw-ace-11992"/><ref name="scs-1992-b"/>   Compaq withdrew as well, and MIPS Computer Systems was in the middle of being bought out.<ref name="iw-ace-11992">{{cite news | url=https://books.google.com/books?id=4j0EAAAAMBAJ&pg=PA8 | title=SCO Drops Open Desktop for MIPS | author-first=Cate | author-last=Corcoran | magazine=InfoWorld | date=May 4, 1992 | page=8}}</ref>  Only some of the heavy engineering expenditures that SCO had spent on ACE were recoverable; Larry Michels said, "We learned a lot out of ACE. We learned the hard way."<ref name="scs-1992-b"/>

{{Quote box|quote=We knew how to code, we knew how to market and sell, and we knew how to party. We were growing like crazy and didn't know quite when to stop.|source=—Doug Michels in 2012, reflecting upon SCO's history.<ref name="scs-spirit"/>|width=27%|align=right|style=padding:8px;}}

As a whole during this period, SCO's expenses were too high and the company was undercapitalized.<ref name="nb-1992"/>  And by several accounts, during 1991 the company came close to becoming bankrupt.<ref name="nb-1992"/><ref name="cweek-1994"/>  The year saw a large-scale reduction in staffing levels from that peak of 1,300 – with around 12&nbsp;percent of the workforce being let go across two rounds of layoffs – together with a company-wide reorganization that involved new managers being brought in from other technology companies.<ref name="krns-1991">{{cite news | url=https://www.baltimoresun.com/news/bs-xpm-1991-11-25-1991329055-story.html | title=Silicon Valley Success Story Finds It Hard To Turn A Profit | agency=Knight-Ridder News Service | newspaper=The Baltimore Sun | date=November 25, 1991 | page=10 (Maryland Business Weekly supplement) <!-- see https://www.newspapers.com/image/376411874 -->}}</ref><ref name="scs-1992-b"/><ref name="scs-adv-1993"/>  Especially targeted for elimination were the projects to build applications for Unix.<ref name="krns-1991"/>

Following these changes, SCO showed a profit during its fiscal 1992 and the first half of its fiscal 1993.<ref name="scs-adv-1993">{{cite news | url=https://www.newspapers.com/image/96294531/?terms=santa%20cruz%20operation%20initial%20public%20offering&match=1 | title=SCO may go public this week | author-first=Jeffrey R. | author-last=Scharf | newspaper=Santa Cruz Sentinel | date=May 23, 1993 | page=D-9 | via=Newspapers.com}}</ref>
In 1992, ''[[Software Magazine]]'' wrote that SCO had long been "the only major player in this market," but noted that [[Univel]] and [[SunSoft]] were both introducing Unix-on-Intel products.<ref>{{cite news | author-last=Goldberg | author-first=Cheryl | title=New SCO rivals | magazine=Software Magazine | date=October 1992 | page= 36 | via=Gale Academic OneFile <!-- (accessed September 19, 2020). --> | url= https://link.gale.com/apps/doc/A12736917/AONE?u=wikipedia&sid=AONE&xid=21394336 }}</ref> Both of these were from better-financed companies.<ref name="krns-1991"/>
But the sales of UnixWare 1.0 turned out to be modest,<ref name="Age_Unix_1994"/> and SCO's share of the Unix-on-Intel market was around 65 percent in mid-1993.<ref name="scs-adv-1993"/>  For 1993 overall, SCO sold around 185,000 copies of its Unix product, while Novell (which acquired Univel) sold around 35,000 of UnixWare and Sun's sales of Solaris-on-Intel were insignificant.<ref>{{cite news | url=https://books.google.com/books?id=CENB4wa_QxUC&pg=PA57 | title=SCO to reinforce its Unix system | author-first=Jean S. | author-last=Bozman | newspaper=Computerworld | date=February 28, 1994 | pages=47, 57 }}</ref> ''[[PC Magazine]]'', in a lengthy review the following year of different operating system choices for the Intel architecture, wrote that SCO had a dominant position in the Unix-on-Intel market.<ref name="pcm-unixintel-1993"/>  The magazine added that with its "Tyrannosaurus Rex"-like presence and more than 3,000 applications available, independent software vendors interested in Unix on PCs invariably made products that were SCO Unix-conformant.<ref name="pcm-unixintel-1993">{{cite news | url=https://books.google.com/books?id=jMKfH6i9OcYC&pg=PA240 | title=Unix on Intel: The Beast Turns Beauty | author-first=David S. | author-last=Linthicum | author2-first=Stephen J. | author2-last=Vaughan-Nichols | magazine=[[PC Magazine]] | date=June 15, 1993 | pages=219–263}} At pp. 220–221, 240, 250, 252.</ref>

=== Going public ===
By the summer of 1992, it was clear that SCO was intending to go public in the near future, and a number of investment bankers, brokers, and analysts attended that year's [[SCO Forum]] conference with that possibility in mind.<ref name="scs-1992-b">{{cite news | url=https://www.newspapers.com/image/71355722/ | title=SCO pointing toward public stock offering | author-first=Guy | author-last=Lasnier | newspaper=Santa Cruz Sentinel | date=August 19, 1992 | pages=A1, A8 | via=Newspapers.com}} See also "2,500 attend local conference" side article, same by-line, same pagess.</ref>  Larry Michels now viewed becoming a public company as crucial, as it would give SCO greater access to investment capital and because it would make SCO a more credible vendor to large corporations.<ref name="scs-1992-b"/>  There was also a desire to let employees benefit from the stock options they held.<ref name="scs-adv-1993"/>  At the same time, Michels had become prominent in the local business scene in [[Santa Cruz County, California|Santa Cruz County]],<ref name="scs-16dec92"/> arguing that the area had to be more aggressive about fostering economic development.<ref name="scs-1992-b"/><ref name="scs-8dec92"/>  At one point he asked SCO employees to attend a public hearing in support of a controversial plan for an outlet mall in which he was an investor.<ref name="scs-1992-b"/><ref name="scs-8dec92"/>  He was also a sponsor of several charitable events and philanthropies in the Santa Cruz area.<ref name="scs-16dec92">{{cite news | url=https://www.newspapers.com/image/67756470 | title=Sexual harassment suit stuns the local business community | author-first=Martha | author-last=Mendoza | newspaper=Santa Cruz Sentinel | date=December 16, 1992 | pages=A1, A4 | via=Newspapers.com}} See also "Sexual-harassment cases rise; process often slow" sidebar by same reporter, p. A-4.</ref>

On December 5, 1992, the ''[[San Jose Mercury News]]'' broke the story that three former executive secretaries at SCO had filed a lawsuit two days earlier against Larry Michels and SCO for [[sexual harassment]].<ref name="sjmn-5dec92">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1992%20to%201/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1992%20to%201/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title= Software Firm Founder Accused of Harassment | author-first=Paul | author-last=Rogers | newspaper=San Jose Mercury News | date=December 5, 1992 | page=11B}}</ref><ref name="sjmn-16dec92"/>  The suit, which named the women involved and was filed in [[Santa Cruz County Superior Court]], stated that Michels had, on repeated occasions, propositioned or groped the women and had forced them into kissing him at work.<ref name="sjmn-5dec92"/> In charging a sexually-hostile work environment,<ref name="nyls-ja"/> the women characterized Michels' behavior as "oppressive, demeaning, sexually belittling, intimidating, exploitive and abusive."<ref name="fbee-6dec92"/> When one of the women had complained about Michels to the human resources department, she said she was told "that's just Larry, being Larry," and that the onus was on her to come up with a proposal on how she should be treated and present it to Michels.<ref name="scs-8dec92"/>  One of the women had been fired, another had quit her job, and the third had been transferred to another position after filing a complaint with the [[California Department of Fair Employment and Housing]].<ref name="fbee-6dec92"/>

When asked for his reaction by a reporter, Michels denied the allegations in the suit and said, "Did it say I raped anybody? Did it say I pinned anybody down?"<ref name="fbee-6dec92"/>  In response to the accusations hugging and kissing the women against their will at work, Michels said, "How serious a crime is that?"<ref name="fbee-6dec92">{{cite news | url=https://www.newspapers.com/clip/75381742/ | title=Sexual harassment alleged | first=Paul | last=Rogers | agency=Knight-Ridder Newspapers | newspaper=The Fresno Bee | date=December 6, 1992 | page=A5 | via=Newspapers.com}}</ref> And asked if he regretted any of his actions, he said "I certainly regret that I hired those three girls."<ref name="scs-8dec92">{{cite news | url=https://www.newspapers.com/clip/75383376/ | title=SCO chief accused of harassment | newspaper=Santa Cruz Sentinel | date=December 8, 1992 | pages=A-1, A-14 | via=Newspapers.com}}</ref> On December 15, a fourth-named former executive secretary joined the lawsuit, saying among other allegations that Michels had taken her to a remote wooded property he owned and tried to force himself on her and that she ran away for fear of being raped.<ref name="sjmn-16dec92">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1992%20to%201/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1992%20to%201/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title= Another Worker Targets Michels | author-first=Paul | author-last=Rogers | newspaper=San Jose Mercury News | date=December 16, 1992 | page=1B}}</ref>  Public attention to sexual harassment had increased following the previous year's [[Clarence Thomas Supreme Court nomination|Clarence Thomas-Anita Hill hearings]],<ref name="scs-16dec92"/> and complaints had been filed with the California Department of Fair Employment and Housing against other high-level male executives at SCO as well.<ref name="sjmn-17dec92"/> On December 16 the board of directors of SCO announced that it had appointment one of its members, Jim Harris, to investigate the situation at SCO and that the board was "extremely distressed by the recent allegations made against the company and its president."<ref name="sjmn-17dec92">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1992%20to%201/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1992%20to%201/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title= Computer Firm to Study Allegations of Sexual Harassment | author-first=Jack | author-last=Foley | newspaper=San Jose Mercury News | date=December 17, 1992 | pages=1B, 4B}}</ref>

On December 21, 1992, less than three weeks after initial lawsuit was filed, Larry Michels resigned as chief executive of SCO.<ref name="sjmn-22dec92">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1992%20to%201/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1992%20to%201/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title= Embroiled Software Boss Resigns | author-first=Tom | author-last=Schmitz | newspaper=San Jose Mercury News | date=December 22, 1992 | page=1A}}</ref> Harris became interim president of the company.<ref name="scs-lars-1993"/>  The rapid sequence of events triggered what the ''[[Santa Cruz Sentinel]]'' termed a period of "internal turmoil and depression" within the organization.<ref name="scs-lars-1993"/>

A month later, Lars Turndal took over as president and chief executive officer of SCO.<ref name="scs-lars-1993">{{cite news | url=https://www.newspapers.com/image/66752764/?terms=sco%20lars%20turndal&match=1 | title=New chief executive, chairman at SCO | author-first=Guy | author-last=Lasnier | newspaper=Santa Cruz Sentinel | date=January 22, 1993 | page=C-2 | via=Newspapers.com}}</ref>  Turndal, originally from Sweden, had overseen the large growth in SCO's European operation over the preceding six years.<ref name="cweek-1994"/>  Harris became chairman of the board, while Doug Michels remained executive vice president and also became chief technical officer.<ref name="scs-lars-1993"/>   Programs begun by Harris, and continued by Turndal, sought to introduce to the company externally provided classes in cultural sensitivity and to establish an internal diversity council.<ref name="scs-lars-1993"/>

In early April 1993, the sexual harassment suit was settled out of court,<ref name="sjmn-3apr93">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1993%20to%207/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1993%20to%207/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title=Former SCO Boss Settles Silently | author-first=Paul | author-last=Rogers | newspaper=San Jose Mercury News | date=April 3, 1993 | page=1A}}</ref> with the four women being awarded a total of $1.25 million.<ref name="nyls-ja">{{cite journal | url=https://digitalcommons.nyls.edu/cgi/viewcontent.cgi?article=1399&context=journal_of_international_and_comparative_law | title=Damages in Sex Harassment Cases" A Comparative Study of American, Canadian, and British Law | first1=Joseph M. |last1=Kelly | first2=Bob | last2=Watt | journal=NYLS Journal of International and Comparative Law | volume= 16 | number= 1 | date=1996 | pages=79–134}} At pp. 92, 94-95.</ref> At the same time, SCO filed the necessary papers with the [[United States Securities and Exchange Commission]] to go public.<ref name="scs-diff-1993"/>  Prosecutors in Santa Cruz County considered whether criminal charges should be filed against Larry Michels but after a two-month investigation decided not to.<ref name="sjmn-19apr93">{{cite news | url=https://nl.newsbank.com/nl-search/we/Archives?p_product=SJ&p_theme=sj&p_action=search&p_maxdocs=200&s_dispstring=allfields(larry%20michels)%20AND%20date(1/1/1993%20to%207/1/1993)&p_field_date-0=YMD_date&p_params_date-0=date:B,E&p_text_date-0=1/1/1993%20to%207/1/1993)&p_field_advanced-0=&p_text_advanced-0=(%22larry%20michels%22)&xcal_numdocs=20&p_perpage=10&p_sort=YMD_date:D&xcal_useweights=no | title=Sex Probe Ends | author-first=Paul | author-last=Rogers | newspaper=San Jose Mercury News | date=April 19, 1993 | page=1B}}</ref>  Michels received a $354,000 "[[golden handshake]]" from SCO, which brought some criticism from employment rights' advocates.<ref name="ci-1993">{{cite news | title=Santa Cruz Operation under fire for golden handshake to Michels | work=Computergram International | date= May 20, 1993 <!--, CGI05200015. --> | via=Gale General OneFile <!-- (accessed April 6, 2021). --> | url=https://link.gale.com/apps/doc/A13972989/ITOF?u=wikipedia&sid=ITOF&xid=33fc805b }}</ref>  (Michels never returned to the company, although he kept in touch with what was going on via his son, and died of a stroke in 1999.<ref name="scs-larry-obit"/>)

The [[initial public offering]] for The Santa Cruz Operation, Inc. took place on May 27, 1993.<ref name="scs-ipo-1993"/>  The stock traded on [[NASDAQ]] under the symbol SCOC.<ref>{{cite newsgroup
| title = Compaq and SCO Announce Strategic Alliance for the Enterprise
| author = Jon Tarzia
| date = August 20, 1997
| newsgroup = comp.unix.sco.announce
| message-id = 3.0.32.19970819215648.006d4068@venus.sco.com
| url = http://groups.google.co.uk/group/comp.unix.sco.announce/msg/b146064b4889482a
| accessdate = October 9, 2008
}}{{Dead link|date=August 2025 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>  The stock's offering price was 12{{frac|1|2}} and it closed at 12{{frac|3|8}}, meaning that it did not have the first-day jump that "hot" IPOs are expected to show.<ref name="scs-ipo-1993">{{cite news | url=https://www.newspapers.com/image/96294847/?terms=santa%20cruz%20operation%20initial%20public%20offering&match=1 | title=SCO stock hits the market | author-first=Hongmin  | author-last=Qi | newspaper=Santa Cruz Sentinel | date=May 28, 1993 | pages=A-1, A-8 | via=Newspapers.com}}</ref>

The firm's initial stretch as a public company was difficult.<ref name="scs-diff-1993"/><ref name="cweek-1994"/>  Two important board members, Harris and Microsoft's Gaudette, died during 1993,<ref name="scs-diff-1993">{{cite news | url=https://www.newspapers.com/clip/75541911/ | title=SCO's year of living differently | author-first=Guy | author-last=Lasnier | newspaper=Santa Cruz Sentinel | date=December 26, 1993 | page=C-1 | via=Newspapers.com}}</ref><ref name="cweek-1994"/> with Turndal succeeding Harris as chairman.<ref name="scs-forum-93"/>  By year's end the stock price was around 6{{frac|1|8}}, or half what it had started at.<ref name="scs-diff-1993"/>

The transitions of this period marked the change in SCO from being an entrepreneur-driven company to one driven by the need to behave in a more business-like manner and show steady profits.<ref name="scs-lars-1993"/><ref name="cweek-1994"/><ref name="scs-forum-93">{{cite news | url=https://www.newspapers.com/image/66767573/ | title=Different SCO approaches annual forum | author-first=Guy | author-last=Lanier | newspaper=Santa Cruz Sentinel | date=August 12, 1993 | page=B-6 | via=Newspapers.com}}</ref>  Turndal further jettisoned unprofitable applications and focused on SCO's core Unix business as well as middleware additions to strengthen the platform.<ref name="cweek-1994">{{cite news | author-last=Button | author-first=Kate | title=Stuck in the middle | magazine=Computer Weekly | date=November 24, 1994 | pages=48ff | via=Gale General OneFile <!-- (accessed April 6, 2021). --> | url= https://link.gale.com/apps/doc/A16327629/ITOF?u=wikipedia&sid=ITOF&xid=568e2b41 }}</ref>  In December 1994, Turndal was made chair of the board as well as CEO, while Alok Mohan was elevated to president and chief operating officer.<ref>{{cite news | url=https://www.newspapers.com/image/72451563/?terms=%22santa%20cruz%20operation%22%20%22alok%20mohan%22&match=1 | title=Santa Cruz Operation names 2 new leaders | author-first=Steve | author-last=Perez | newspaper=Santa Cruz Operation | date=December 8, 1994 | page=B-4 | via=Newspapers.com }}</ref>

With its first release in mid-1993, Microsoft's server operating system [[Windows NT]] became a looming threat to the Unix-on-Intel market.<ref name="scs-adv-1993"/><ref name="scs-ipo-1993"/>  SCO had even more commercial competitors in the Unix-on-Intel space, including NCR, IBM, Sequent, SunSoft's Solaris, and Novell's UnixWare, and each of these is based on SVR4.<ref name="unleashed"/>  SCO was the only Unix-on-Intel vendor basing their product on SVR3.2.<ref name="unleashed">{{cite book | title=UNIX Unleashed: System Administrator's Edition | editor-first=Robin | editor-last=Burk | editor2-first=David B. | editor2-last=Horvath | publisher=Sams Publishing | year=1997 | location=Indianapolis | pages=10, 12, 653}}</ref> But there were many applications available for OpenServer,<ref name="unleashed"/> in part the result of SCO having forged many partnerships with other computer companies.<ref name="rosen-etal"/>  Over half of all SCO sales were through VARs, who typically used SCO as the basis for an end-user application and then bundled the hardware, operating system, and application as a turnkey solution.<ref name="Age_Unix_1994">{{cite news | url=https://www.newspapers.com/image/123066398/?terms=novell%20supernos&match=1 | title=Serving in the battle of the billy-carts | author-first=Thom | author-last=Cookes | newspaper=The Age | location=Melbourne | date=December 6, 1994 | page=32  | via=Newspapers.com}}</ref>

By the mid-1990s, SCO Unix in all its product releases had an installed base of a million systems sold.<ref name="rosen-etal">{{cite book | title=UNIX System V Release 4: An Introduction | edition=Second | author-first=Kenneth H. | author-last= Rosen | author2-first= Richard H. | author2-last=Rosinski | author3-first=James M. | author3-last=Farber | author4-first=Douglas A. | author4-last=Host | publisher=Osborne McGraw-Hill | location=Berkeley, California | year= 1996 | pages=12, 14–15, 19, 22 }} See also 2006 printing of Second Edition, pp. 25, 28.</ref>  SCO OpenServer had a foothold in the corporate world as well; the 1997 edition of the book ''UNIX Unleashed'' wrote that "It is very popular among corporate internets/intranets and has been for many years."<ref name="unleashed"/>  The book added that "Its technical support cannot be matched, which is why many corporations choose this commercial OS as their server OS of choice."<ref name="unleashed"/>

===PizzaNet, SCO Global Access, first Internet concert===
SCO also recognized the importance of the [[Internet]].  In August 1994, SCO and [[Pizza Hut]] announced PizzaNet, a pilot program in the Santa Cruz area that allowed consumers to use their own computer to order [[pizza delivery]] from a local Pizza Hut restaurant, with connection being made over the Internet to a central Pizza Hut server in [[Wichita, Kansas]].<ref name="autogenerated1">{{cite news | url=https://www.newspapers.com/clip/76817880/ | title=Business: Ordering over the Internet | newspaper=Chicago Tribune | date=August 22, 1994 | page=3 (Evening Update) | via=Newspapers.com}}</ref><ref name="ddj-1994">{{cite news | url=http://www.drdobbs.com/programming-paradigms/184409367 | title=Programming Paradigms: The Pizza Clerk, the Bookmaker, and the UPS Truck | first=Michael | last=Swaine | author-link=Michael Swaine (technical author) | magazine=Dr. Dobb's Journal | date=December 1994}}</ref>  The PizzaNet application software was developed by SCO's Professional Services group.<ref name="pr-pizza-1994">{{cite press release
|url=http://www.interesting-people.org/archives/interesting-people/199408/msg00057.html
|title=sco and Pizza Hut Announce Pilot Program for Pizza Delivery on the Internet
|access-date=March 30, 2008
|author=
|date=August 22, 1994
|publisher=Pizza Hut and The Santa Cruz Operation
|url-status=dead
|archive-url=https://web.archive.org/web/20120609100313/http://www.interesting-people.org/archives/interesting-people/199408/msg00057.html
|archive-date=June 9, 2012
}}</ref>

PizzaNet was based on the first commercially licensed and bundled Internet operating system, SCO Global Access.<ref name="pr-pizza-1994"/> SCO was the first commercial Unix system supplier to license the powerful [[Mosaic (web browser)|NCSA Mosaic]] [[hypertext]] browser and [[NCSA HTTPd]], and the first to ship these technologies from the [[National Center for Supercomputing Applications]] at the [[University of Illinois Urbana-Champaign]] bundled with an operating system for commercial use.<ref>{{cite press release
 |url=http://www.hpcwire.com/archives/2597.html
 |title=SCO Provides Real-World On-Ramp Via NCSA Mosaic 
 |access-date=March 30, 2008 
 |date=March 11, 1994 
 |publisher=HPC Wire
}}{{dead link|date=November 2016 |bot=InternetArchiveBot |fix-attempted=yes }}</ref>

On August 23, 1994, SCO broadcast a live music concert from the UC Santa Cruz's Cowell Courtyard. This event, part of SCO Forum 1994, is said to be the first time a scheduled live music concert was broadcast over the Internet; it was sent over both the [[Mbone]] and the emerging [[World Wide Web]].<ref>{{cite news | url=https://www.nytimes.com/1994/11/22/arts/rolling-stones-live-on-internet-both-a-big-deal-and-a-little-deal.html | author-last=Strauss | author-first=Neil | title=Rolling Stones Live on Internet: Both a Big Deal and a Little Deal | newspaper=The New York Times | date=November 22, 1994 | page=C15}}</ref><ref>
Hafner, Katie, "The MBone: Can't You Hear It Knocking", Newsweek, December 5, 1994.</ref><ref>{{cite web
|url=http://www.deth.com/forum-gig.html
|title=S.F. Bay Area Band Deth Specula Rocks the Internet with Live, Computer Network Broadcast
|access-date= March 30, 2008
|author=Malcolm McCameron
|date= August 23, 1994
|publisher=Deth Specula
}}</ref><ref>{{cite web
|url=http://www.mediacast.com/Company/
|title=MediaCast Company Information
|access-date= March 30, 2008
|author=Jon R. Luini
|date= August 23, 1994
|publisher=MediaCast
}}</ref> The band was [[Deth Specula]], a group composed of SCO employees.<ref>{{cite web |url=http://www.iuma.com/deth-mbone/ |title=Deth Specula Live at the SCO Forum |date=August 23, 1994 |publisher=Internet Underground Music Archive |archive-url=https://web.archive.org/web/19990202093957/http://www.iuma.com/deth-mbone/ |archive-date=February 2, 1999}}</ref> Their first song parodied [[Grand Funk Railroad]]'s "[[We're an American Band (song)|We're an American Band]]". Deth Specula sang "We Are an Internet Band" with lyrics like:

{{Poem quote|We're comin' to your town
To bring your network down
We are an Internet band.}}

=== "Everest" ===
[[Image:SCO office interior Santa Cruz California Aug 1997.jpg|thumb|left|Interior of an office in the main buildings on Encinal Street in Santa Cruz, with the hills of the Pogonip area outside the window]]

The next big product release from the company was code-named "Everest".<ref name="pate-9ff"/> It resulted from three years of labor at SCO's Santa Cruz, Watford, and Toronto development sites,<ref name="pate-9ff"/> an effort that amounted to $50 million in research and development costs.<ref name="scs-osr5-1995"/>  The general thrust of the work was towards supporting the requirements of business-critical servers.<ref name="cc-osr5-1995"/>  It included adding support for [[memory-mapped file]]s, the journaling [[High Throughput File System|HTFS]] filesystem with mirroring and striping support, disk compression, [[RAID]] levels 0, 1, and 5, [[POSIX.1b]] real-time scheduling and semaphores, the [[Advanced Power Management]] interface, and [[SVID 3]]–level conformance.<ref name="pate-9ff"/><ref name="pcm-osr5-1995"/><ref name="iw-osr5-1995"/><ref name="cc-osr5-1995"/>  Everest expanded MP support from 8 to 32 processors.<ref name="Age_Unix_1994"/>  Everest has hardware support for 900 different physical machines, of which 60 were SMP systems, and for some 2,000 peripheral devices.<ref name="pate-9ff"/>

Another major new feature of Everest is the SCOadmin system administration tool, with both graphical and command-line interfaces,<ref name="pcm-osr5-1995">{{cite news | url=https://books.google.com/books?id=3jNOHGmrpRkC&pg=PA206 | title=Network Operating Systems: SCO OpenServer Release 5 | author-first=David S. | author-last=Linthicum | magazine=[[PC Magazine]] | date=October 24, 1995 | pages=223–228}}</ref> and software upgrades that can be run either locally or remotely.<ref name="iw-osr5-1995"/> The existence of an administration framework and GUI was considered by ''[[InfoWorld]]'' writer [[Jason Pontin]] to be important in competing with the user-friendly qualities of Windows NT.<ref name="iw-osr5-1995">{{cite news | author-last=Pontin | author-first=Jason | title=SCO set to counter Windows NT growth with Everest upgrade | magazine=InfoWorld | date= May 8, 1995 | page= 18 | via= Gale General OneFile <!-- (accessed April 13, 2021). --> | url=https://link.gale.com/apps/doc/A16940992/ITOF?u=wikipedia&sid=ITOF&xid=46c96b70 }}</ref>

Everest was released as SCO OpenServer Release 5.<ref name="pate-9ff"/> The release was celebrated with a corporate event at the [[Hudson Theatre]] in New York City on May 9, 1995.<ref name="scs-osr5-1995">{{cite news | url=https://www.newspapers.com/clip/75599662/ | title=SCO to unveil new software product today | author-first=Steve | author-last=Perez | newspaper=Santa Cruz Sentinel | date=May 9, 1995 | page=B-4 | via=Newspapers.com}}</ref> The location was chosen in part to give the product an East Coast corporate veneer rather than a West Coast laid-back one.<ref name="cc-osr5-1995"/> As part of the release publicity, SCO emphasized they had settled on competing in the server market and had halted any attempt to compete with Windows in  the desktop client market.<ref name="cc-osr5-1995"/>

Industry analysts were generally impressed with OpenServer.<ref name="cc-osr5-1995">{{cite news | author-last=Shoesmith | author-first=John | title=SCO Lays on the Glitz for its New 32-Bit OS | magazine=Computing Canada | date=May 24, 1995 | pages=1, 4 | url= https://www.proquest.com/docview/225014967 | id={{ProQuest|225014967}} }}</ref> Testers of beta releases of the product, including [[Taco Bell]] which was deploying OpenServer to each of its 4,000 stores, were impressed by its reliability.<ref>{{cite news | author-last=Patrizio | author-first=Andy | title=Testers wowed after scaling Everest; SCO's OpenServer offers improved performance, reliability | magazine= PC Week | date= May 15, 1995 | page= 13 | via= Gale General OneFile <!!-- (accessed April 13, 2021). --> | url=https://link.gale.com/apps/doc/A16867005/ITOF?u=wikipedia&sid=ITOF&xid=5d326e6f }}</ref>

[[Image:JBSi SCO distributor mug.jpg|thumb|right|upright=0.67|Distributors, resellers and the like: 'The channel' was vital to SCO's success.]]

Although parts of the [[Unix kernel]] were rewritten during the Everest project,<ref name="pate-9ff"/> it is still fundamentally the nearly ten-year-old System V Release 3.2 kernel and as such has some limitations, such as not being multithreaded.<ref name="pcw-osr5-1995"/> This lack of native threads support would prove a challenge in years to come when certain kinds of modern system software needed to run on the platform.<ref name="jit-2003"/> OpenServer 5 was compatible with around 8,000 business applications,<ref name="scs-osr5-1995"/> and it was partly a desire to maintain compatibility with existing applications that prevented SCO from making more drastic changes to the operating system.<ref name="pcw-osr5-1995"/>  Overall on a technical evaluation, ''[[PC Magazine]]'' found OpenServer 5 to be good but not quite as good as Novell's [[UnixWare 2]] product.<ref name="pcm-osr5-1995"/> One Unix OEM told ''[[PC Week]]'' that OpenServer 5 was "a good product, but it's not a revolutionary product; it's an evolutionary product. It doesn't quite do the enterprise stuff people are looking for."<ref name="pcw-osr5-1995">{{cite news | author-last=Patrizio | author-first= Andy | title=SCO's Everest Open Server mixes the old and the new | magazine=PC Week | date= May 8, 1995 | page=8 | via= Gale General OneFile <!-- (accessed April 13, 2021). --> | url= https://link.gale.com/apps/doc/A16941384/ITOF?u=wikipedia&sid=ITOF&xid=06612375 }}</ref>

One project which sought to improve OpenServer's technology base was code-named "MK2".<ref name="ci-mk2-1995">{{cite news | title="Santa Cruz, Chorus Work Codenamed MK2, Due 1997 | work=Computergram International | date= October 11, 1995 <!--, CGN10110011.--> | via= Gale General OneFile <!--(accessed June 1, 2021).--> | url= https://link.gale.com/apps/doc/A17564907/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=673bc04b }}</ref> Its origins date to 1992 with an agreement between SCO and the French company [[Chorus Systèmes SA]] for cooperative work on the [[ChorusOS|Chorus]] microkernel technology in the context of combining OpenServer with a microkernel for use in real-time processing environments in telecommunications and other areas.<ref>{{cite news | author-last=Pallatto | author-first=John | title=Real-time version of SCO Unix on tap | magazine= PC Week | date= October 5, 1992 | pages= 57ff | via= Gale General OneFile <!--(accessed June 1, 2021).--> | url= https://link.gale.com/apps/doc/A12625402/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=679c582e }}</ref>  The first result of this, a dual-functionality product called Chorus/Fusion for SCO Open Systems Software, was released in 1994.<ref>{{cite news | author-last=Foley | author-first= Mary Jo | title=SCO, Chorus prep microkernel Unix for real-time apps | magazine= PC Week | date=December 6, 1993 | pages= 65ff | via= Gale General OneFile <!--(accessed June 1, 2021).--> | url= https://link.gale.com/apps/doc/A14619194/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=c95603fc}}</ref>  By 1995, SCO had set up a business unit for the MK2 venture and was spending considerable amounts of engineering resources on what was now a reimplementation of OpenServer to run on top of the Chorus microkernel, in what was going to be called the SCO Telecommunications OS Platform.<ref>{{cite news | author-last=Watt | author-first=Peggy | title=SCO, French Firm Team to Call on Telecom Market | magazine= Network World <!--12, no. 35--> | date=August 28, 1995 | page= 34 | url= https://www.proquest.com/docview/215937731 | id={{ProQuest|215937731}} }}</ref><ref>{{cite news | title=Santa Cruz and Chorus Finally Come Together; Expect Chorus/Fusion Merger with OpenServer | work= Computergram International | date=September 8, 1995 <!--, CGN09080016.--> | via=Gale General OneFile <!--(accessed June 1, 2021).--> | url=https://link.gale.com/apps/doc/A17357943/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=22e70b0f }}</ref>  A primary customer for this work was the Private Communications Systems unit within [[Siemens AG]].<ref name="ci-mk2-1995"/><ref name="eet-mk2-1995"/>  Later in 1995 the MK2 project had to adjust for SCO's acquisition of UnixWare technology from Novell,<ref name="eet-mk2-1995">{{cite news | author-last=Wirbel | author-first= Loring | title=Chorus, SCO Harmonize on Upgraded Microkernels | magazine= Electronic Engineering Times | date=October 9, 1995 | page= 16 | url= https://www.proquest.com/docview/208135058 | id= {{ProQuest|208135058}} }}</ref> and the goal became to run merged OpenServer/UnixWare code on top of Chorus.<ref>{{cite news | title='Hewlett 3DA Project Could Learn From Our Microkernel Work,' Says Santa Cruz Partner Chorus | work= Computergram International | date= March 6, 1996 <!--, CGN03060010.--> | via= Gale General OneFile <!--(accessed June 1, 2021).--> |url= https://link.gale.com/apps/doc/A18059994/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=9a152ae5 }}</ref>  However, by early 1997, relations had broken down between SCO, Chorus, and the customer, and the MK2 project was scrapped without having achieved fruition.<ref>{{cite news | title=Chorus Leaves Unix Behind; Refocuses on Java and CORBA | work=Computergram International | date= March 4, 1997 <!--, CGN03040018.--> | via= Gale General OneFile <!--(accessed June 1, 2021).--> | url= https://link.gale.com/apps/doc/A19171416/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=c9b0d53b }}</ref><ref>{{cite news | title=Silence From Sun As It Refuses to Sing About Its Java Plans for French Chorus | work=Computergram International | date=September 12, 1997 <!--, CGN09120007.--> | via= Gale General OneFile <!--(accessed June 1, 2021).--> | url= https://link.gale.com/apps/doc/A19748128/ITOF?u=wikipedia&sid=bookmark-ITOF&xid=fe2f35e3 }}</ref>

Through several changes of corporate ownership, SCO OpenServer 5 would remain a supported product into the 2020s.<ref>{{cite news | url=https://www.xinuos.com/products/openserver-5/ | title=SCO OpenServer 5 Definitive 2018 | newspaper=Xinuos | access-date=April 11, 2021}}</ref>

On July 1, 1995, Lars Turndal retired and Alok Mohan became the company's CEO.<ref name="cw-alok-1995">{{cite news | url=https://books.google.com/books?id=j3d2queNjV4C&pg=PA52 | title=Briefs: SCO names CEO | newspaper=Computerworld | date=June 26, 1995 | page=52}}</ref>  Mohan's background was in corporate finance and strategic planning with AT&T Global Information Solutions.<ref name="cw-alok-1995"/>  The equities market immediately reflected changes in SCO financial statements: When customers spent more time evaluating OpenServer 5 rather than buying it during the first quarter it was available, SCO missed its forecasted earnings and SCO stock lost a quarter of its value.<ref>{{cite news | author-last=Pelline | author-first=Jeff | title=Santa Cruz Operation Stock Plummets 25% <!-- / Software Maker Warns of Slow Sales: [FINAL Edition]. --> | newspaper= San Francisco Chronicle <!-- (Pre-1997 Fulltext), --> | date=July 11, 1995 | url= https://www.proquest.com/docview/303368077 | id={{ProQuest|303368077}} }}</ref>

=== Client Integration Division ===
{{Main|Visionware|IXI Limited}}

In February 1993, SCO acquired [[IXI Limited]], a software company in [[Cambridge]], [[United Kingdom|UK]], best known for its [[X.desktop]] product, which formed the graphical basis of Open Desktop.<ref>{{cite newsgroup
| title = SCO Acquires IXI Ltd
| author = SCO Information
| date = February 26, 1993
| newsgroup = biz.sco.announce
| message-id = 9302260824.aa14833@mascot.sco.COM
| url = http://groups.google.co.uk/group/biz.sco.announce/browse_thread/thread/d2ddabe8cf504605?hl=en&ie=UTF-8&q=#1e356636b87de105
| accessdate = February 4, 2009
}}{{Dead link|date=August 2025 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> In December 1994, SCO bought [[Visionware]], of [[Leeds]], UK, developers of XVision.<ref>{{cite news | url=https://books.google.com/books?id=-xcEAAAAMBAJ&pg=PA4 | title=SCO gains Windows edge via Visionware | first=Peggy | last=Watt | magazine=Network World | date=December 19, 1994 | pages=4, 58}}</ref>   The roles of the two companies were different but complementary, as one former SCO UK employee has succinctly summarised: "IXI specialised in software that ran on Unix and made Unix easier to use. ... Visionware specialised in software that ran on Windows that made Unix easier to use."<ref name="h-vfs">{{cite web | url=https://www.rogerbinns.com/visionfs.html | title=A history of VisionFS | author-first= Roger | author-last=Binns | publisher=rogerbinns.com | date=August 14, 2013 | access-date=January 24, 2020}}</ref>

In 1995, SCO combined the two development teams to form the [[IXI Visionware, Ltd.]] subsidiary.<ref>{{cite news | url=https://books.google.com/books?id=_BIEAAAAMBAJ&pg=PA29 | title=X Window server vendors add Win95 support | author-first=Peggy | author-last=Watt | magazine=Network World | date=12 June 1995 | pages=29–30}}</ref>   Later in 1995, the merged business unit was subsumed more fully into its parent and became the Client Integration Division of SCO.<ref name="h-vfs"/>

[[Image:SCO office interior Leeds England December 1997.jpg|thumb|left|Main floor of the SCO Leeds office, 1997]]

These acquisitions were part of SCO acknowledging that it did not want to compete with Microsoft on the desktop, but rather wanted to put forward a Windows-friendly product strategy.<ref name="scs-diff-1993"/><ref name="cweek-1994"/>  It also fit SCO's idea of the [[client–server model]] of computing, where SCO would offer connectivity and middleware components to support Windows clients talking to SCO servers.<ref name="pcw-vision-1995">{{cite news | author-last=Patrizio | author-first=Andy | title=Visionware tools help SCO build client server strategy | magazine=PC Week | date= February 6, 1995 | page= 21 | via= Gale General OneFile | url= https://link.gale.com/apps/doc/A16436987/ITOF?u=wikipedia&sid=ITOF&xid=81492d73 }}</ref>

In May 1997, the Client Integration Division released the Vision97 family of products: XVision Eclipse (a PC [[X Window System|X server]]), VisionFS (an [[Server message block|SMB]] server for UNIX), TermVision (a [[terminal emulator]] for Microsoft Windows), SuperVision (centralised management of users from Windows), and SQL-Retriever ([[ODBC]]- and [[JDBC]]-compliant database connectivity software).<ref>{{cite news | url=https://techmonitor.ai/technology/sco_offers_windows_to_unix_tools_on_single_cd | title=SCO Offers Windows-to-Unix Tools on Single CD | work=Computergram International | date=May 7, 1997}}</ref>  The VisionFS product was developed from scratch by the Cambridge development team; the other products were developed by the Leeds development team and were mostly new versions of the existing Visionware products.<ref name="h-vfs"/>  A later release of the suite is branded as Vision2K.<ref name="x-v2k"/>

The Client Integration Division was relatively independent of the rest of SCO, for reasons both technical and organizational.  It ported its code to all major Unix platforms, including those of SCO's competitors.<ref name="x-v2k">{{cite web  | title=SCO Vision2K Software Availability | publisher=The Santa Cruz Operation | url=http://www.sco.com/vision/eval/matrix.html | access-date=May 15, 2021}}</ref><ref name="h-vfs"/>  It operated its own web site for some time.<ref name="motif-faq">{{cite web | url=https://babbage.cs.qc.cuny.edu/courses/GUIDesign/motif-faq.html | title=MOTIF Frequently Asked Questions | publisher=comp.windows.x.motif | date=November 16, 1996 | access-date=May 15, 2021}} See entry for IXI Premier Motif.</ref>  The SCO Unix channel-based sales model did not work well for the Vision products,<ref name="ci-BigE-1996"/> and the client division had its own sales force.<ref name="h-vfs"/>  This was illustrated by SCO having two different subsidiaries in Japan: Nihon SCO, which dealt with the operating system products and services, and SCO K.K., a joint venture which handled the Vision product line.<ref name="cj-1999">{{cite news | url=
https://www.japaninc.com/cpj/magazine/issues/1999/nov99/docs/nov99_sco.html | title=SCO Forum 1999: CJ Online speaks with Jiro Monden, director of Nihon SCO | author-first=George | author-last=Pajari | magazine=Computing Japan | date=November 1999}}</ref>

==Later history==
=== The Novell–SCO–HP deal of 1995 ===
[[Image:SCO corridor in Florham Park New Jersey office guarded by SCOland Sheriff April 1996.jpg|thumb|right|upright=0.67|Corporate history in a joke: [[Bjarne Stroustrup]], the creator of C++, worked for AT&T and then USL, who made a promotional cardboard cutout figure of himself. Novell and then SCO inherited the cutout. For some time after the Novell–SCO–HP deal closed, all three companies were sharing the same office space in Florham Park, New Jersey.  In order to demark which corridors were SCO's, the Stroustrup cutout was put up with a  hat, a bolo tie-with-badge, and a SCO business card saying "{{not a typo|SCOland}} Sheriff".]]
[[Novell]]'s 1993 acquisition of [[Unix System Laboratories]] had never really worked out,<ref name="CRN_Unix_2003">{{cite news | url=https://www.crn.com/columns/channel-programs/18831011/novell-buys-unix-again.htm | title=Novell Buys Unix, Again | first=David | last=Strom | magazine=CRN | date=2003-11-05}}</ref> and by late summer 1995 Novell was looking for a way out of the Unix business.<ref name="IW_Confusing_2003">{{cite news | url=https://www.informationweek.com/sco-novell-deal-was-confusing-from-the-start/d/d-id/1019435 | title=SCO–Novell Deal Was Confusing From The Start | author-first=John | author-last=Foley | magazine=Information Week | date=2003-06-06}}</ref>  On September 20, 1995, Novell announced the sale of that business to SCO, coincident with a licensing arrangement with [[Hewlett-Packard]].<ref name="NW_Deal_1995">{{cite news | url=https://books.google.com/books?id=5w4EAAAAMBAJ&pg=PA134 | title=UnixWare survives through sale, licensing deal | magazine=Network World | date=1995-09-25 | page=134}}</ref>  As part of the deal, SCO said that it would merge the SVR4.2-based UnixWare with the SVR3.2-based OpenServer, creating a new merged product code-named "Gemini".<ref name="NW_Deal_1995"/><ref name="IW_Gemini_Whitebox_1995">{{cite news | url=https://www.informationweek.com/unix-unity-foundering/d/d-id/1019439? | title=Unix Unity Foundering? | author-first=<!-- unk --> | author-last=<!-- unk --> | magazine=InformationWeek | date=December <!--what day?--> 1995}}</ref>  Gemini would then be sold through SCO's channel and reseller operation.<ref name="NW_Deal_1995"/>  SCO and HP also said that they would co-develop a next-generation, 64-bit version of Unix for use with "Merced", the code name for [[IA-64|HP and Intel's upcoming 64-bit architecture]].<ref name="IW_Devil_1995">{{cite news | url=https://www.informationweek.com/future-unix-the-devils-in-the-details/d/d-id/1019438? | title=Future Unix: The Devil's In The Details | author-first=<!-- unk --> | author-last=<!-- unk --> | magazine=Information Week | date=November <!--what day?--> 1995}}</ref>  Some 400 Novell software engineers had been working on UnixWare, mostly in an office in [[Florham Park, New Jersey]]; almost all of these engineers joined either SCO or HP<ref name="NW_Deal_1995"/><ref name="IW_Devil_1995"/> (about a year later, the SCO part relocated to offices in [[Murray Hill, New Jersey]]). The part of the deal between Novell and SCO closed on December 6, 1995.<ref name="pr-names">{{cite press release | url=https://www.novell.com/news/press/archive/1995/12/pr95274.html | title=Novell Completes Sale of UnixWare Business to The Santa Cruz Operation | publisher=Novell | date=December 6, 1995}}</ref>

As Doug Michels later reflected in 2006, SCO seized on the idea of buying the Unix business from Novell for three reasons: "for one, we got all the talent from Bell Labs that had created Unix; two, we got the moral authority around Unix; and three, we got rid of all the crazy historical licensing problems" dating from Unix's origins within AT&T.<ref name="doug-video"/><!-- 14:30 -->  In order to reduce the price to SCO, part of the deal was that SCO agreed to pay a royalty stream back to Novell of UnixWare sales.<ref name="doug-video"/>
 
By December 1995, there were already some indications that the three-way arrangement was not working out as had been initially advertised.<ref name="IW_Gemini_Whitebox_1995"/>  The computer industry was not sure that SCO could handle being the primary Unix shepherd.<ref name="IW_Confusing_2003"/>  The HP project, code-named "White Box", focused on making a hybrid environment out of the SRV4.2-based Gemini and the SVR3.2-based HP-UX, but that effort faced major technical hurdles.<ref name="IW_Gemini_Whitebox_1995"/>

"White Box" became the [[3DA]] effort, the purpose of which was to unify OpenServer, UnixWare, and [[HP-UX]] in some way to produce a resulting product would then become the de facto Unix standard for both existing [[IA-32]] systems and the upcoming [[IA-64]].<ref name="pr-threewaydeal">{{cite press release |title= HP, Novell and SCO To Deliver High-Volume UNIX OS With Advanced Network And Enterprise Services |publisher= Novell; SCO; Hewlett-Packard |date= September 20, 1995  |url= http://www.novell.com/news/press/archive/1995/09/pr95220.html  |access-date= 
| archive-url= https://web.archive.org/web/20070123203442/http://www.novell.com/news/press/archive/1995/09/pr95220.html| archive-date= January 23, 2007 | url-status= live}}</ref>  The effort was motivated in part by threat of Windows NT threat taking advantage of splits among Unix providers when 64-bit systems arrived in common use.<ref name="cnet-3DA-1997"/> By August 1996, HP and SCO were delivering application programming interface (API) specifications to various OEMs and ISVs, as well as doing a best-of-breed technology analysis to determine whether Gemini or HP-UX would be the going-forward source base for a given component.<ref name="ci-3DA-APIs-1997">{{cite news | title=Hewlett, Santa Cruz Send 3DA Unix Application Programming Interface Specification to OEM Customers to Review | work= Computergram International | date= August 23, 1996 <!--, CGN08230016. --> | via=Gale General OneFile <!-- (accessed May 1, 2021). --> | url=https://link.gale.com/apps/doc/A18613741/ITOF?u=wikipedia&sid=ITOF&xid=6b961b0c }}</ref>  Both companies were also doing porting work to Merced using the early-version compilers available.<ref name="ci-3DA-APIs-1997"/>

The effort was still in theory going in early 1997, when HP and SCO were to publish the "Lodi" set of common programming interfaces for a 64-bit Unix incorporating elements of OpenServer, UnixWare, and HP-UX.<ref name="cnet-3DA-1997">{{cite news | url=https://www.cnet.com/news/new-unix-is-no-two-bit-act/ | title=New Unix is no two-bit act | publisher=CNET | date=January 8, 1997}}</ref>  But little progress had been made on actual implementation, with sources for only a few components having been exchanged by the two companies.<ref name="ci-3DA-busted-1997">{{cite news | url=https://techmonitor.ai/techonology/as_nt_rolls_in_unixes_scrap_it_out_for_honors_1 <!-- this is longer than the day-before version I found on Gale --> | title=As NT Rolls In, Unixes Scrap It Out For Honors | work=Computergram International | date=August 10, 1997 }}</ref>  The collaboration failed for both business reasons – HP and SCO had differing perceptions of the marketplace – and technical ones – an inability to produce a common binary Unix-for-Intel product that could run existing applications from both companies' user bases.<ref name="ci-3DA-busted-1997"/> Primary among the technical obstacles were [[endianness]] considerations.<ref name="ci-3DA-1998">{{cite news | title=SCO Admits Past Mistakes, Seeks Glory in Merced | work= Computergram International | date= March 16, 1998 <!--, CGN03160032. --> | via=Gale General OneFile <!--(accessed May 1, 2021).--> | url= https://link.gale.com/apps/doc/A20421851/ITOF?u=wikipedia&sid=ITOF&xid=f58abaa4 }}</ref>

As an ''[[InformationWeek]]'' story later wrote, the three-way deal had been a "complicated plan" that was "confusing from the start".<ref name="IW_Confusing_2003"/>  The terms of the deal between Novell and SCO  were uncertain enough that an amendment to the agreement had to be signed in October 1996.<ref name="IW_Confusing_2003"/> (Even that was not clear enough to preclude an extended legal battle between Novell and [[The SCO Group]] during [[SCO-Linux disputes]] of the 2000s,<ref name="IW_Confusing_2003"/> a battle that The SCO Group eventually lost.<ref>{{cite news |url=http://www.sltrib.com/news/ci_14786202 |title=Decision in SCO-Novell case ripples beyond Utah |author-first=Tom |author-last=Harvey |newspaper=The Salt Lake Tribune |date=March 30, 2010 }}</ref>)

=== "Gemini" and the UDK ===
Meanwhile, SCO focused on "Gemini", the task of combining the OpenServer and UnixWare product lines on 32-bit systems. The fundamental idea behind the Gemini was that SCO could merge OpenServer 5 and UnixWare 2 in a way that would satisfy the requirements of both small businesses and large enterprises and thus keep the existing customer base that SCO had with OpenServer while entering the enterprise space with UnixWare.<ref name="cnet-uw7-1997">{{cite news | url=https://www.cnet.com/news/sco-readies-merged-os/ | title=SCO readies merged OS | publisher=CNET | date=November 11, 1997}}</ref>

One consequence of the UnixWare acquisition was that the New Jersey office of Novell had a languages and development tools group with more advanced technology than what SCO Canada had been working with, including a C++ compiler based upon the [[Edison Design Group]] front-end,<ref name="c++eh-1998">{{cite journal | title=Optimizing away C++ exception handling | last=Schilling | first=Jonathan L. | journal=ACM SIGPLAN Notices | volume=33 | issue=8 | date=August 1998 | pages=40–47 | doi=10.1145/286385.286390 | s2cid=1522664 | doi-access=free }}</ref><ref name="pr-udk-1997"/> and that made the SCO Canada engineering staff largely redundant once the Novell deal was closed.  As a result, the Toronto office was shut down in early 1996.<ref>{{cite web | url=https://www.yumpu.com/en/document/read/8552411/download-cv-pdf-ronald-m-baecker-technologies-for-aging- | title=Ronald Michael Baecker | publisher=Yumpu | date=September 1, 2011 | page=3}}</ref>

[[Image:SCO office meeting room Watford England December 1997.jpg|thumb|left|A meeting room in the SCO's Watford, England, office in 1997, where a UDK-related training session for support and escalation staff was being given by New Jersey-based staff; portions of a UnixWare desktop are being projected.]]
What the New Jersey group produced was the Universal Development Kit (UDK)<!-- later called the UnixWare and OpenServer Development Kit -->,<ref name="c++eh-1998"/> which was a key element in the question of how to help OpenServer users to make the move to Gemini.<ref name="ci-udk-1997"/>
With the UDK, a single build of a single version of an application's source code could produce binaries that would run unaltered on all three of SCO's platforms: UnixWare 2, OpenServer 5, and the upcoming Gemini.<ref name="ci-bigeii-1997">{{cite news | title=SCO Plans Big E II Love-In to Head Off Sun's Intel Campaign | work=Computergram International | date= December 18, 1997 <!--, CGN12180004.--> | via=Gale General OneFile <!-- (accessed May 1, 2021).--> | url=https://link.gale.com/apps/doc/A20088887/ITOF?u=wikipedia&sid=ITOF&xid=d73ede6e }}</ref>
<ref name="pr-udk-1997">{{cite press release | url=https://www.hpcwire.com/1997/11/14/sco-unveils-targeted-release-strategy-unixware-7/ | title=SCO Unveils Targeted Release Strategy for UnixWare 7 | publisher=HPCwire | date=November 14, 1997}}</ref>  The UDK featured more modern C and C++ compilers and other tools compared to what OpenServer had, and included platform-specific optimizations for things such as C++ [[exception handling]].<ref name="c++eh-1998"/> The hope was that existing OpenServer developers would switch to using the UDK and thereby get an easy path towards migrating to Gemini.<ref name="ci-udk-1997"/>

Support for the new [[Java programming language]] and related Java technologies was also emphasized as a key part of the UDK and the operating system products themselves.<ref name="proceedings-97">{{cite book | title=SCO Forum97: Proceedings and Conference Guide | publisher=Santa Cruz Operation | date=1997 | pages=2, 4, 5, and associated presentation slides}}</ref>  Over the next several years, SCO would add engineering efforts towards making Java an effective vehicle for customers to use on SCO platforms, including a mapping of Java threads onto UnixWare [[light-weight process]]es, recognition of [[Java class file]]s as first-class Unix executables, as well as adapting a [[just-in-time compiler]] to the original Sun [[Java virtual machine]].<ref name="proceedings-97"/><ref name="jit-2003">{{cite journal | title=The simplest heuristics may be the best in Java JIT compilers | last=Schilling | first=Jonathan L. | journal=ACM SIGPLAN Notices | volume=38 | issue=2 | date=February 2003 | pages=36–46 | doi= 10.1145/772970.772975| s2cid= 15117148 }}</ref>  Another announced SCO effort related to Java was PerkUp, an infrastructure built on the [[Java classloader]] facility that was billed as an additional service for UnixWare 7 that would reduce the total memory and throughput needs when multiple Java server applications were running on a system<ref>{{cite news | url=https://www.computing.co.uk/news/1834420/sco-perks-java-performance | title=SCO perks up its Java performance | magazine=Computing | date=June 22, 1999 | author-first=Cath | author-last=Everett }}</ref> (however, PerkUp never emerged as a product, and the patent for it ended up with [[Apple, Inc.]] before expiring).<ref>{{cite web | url=https://patents.google.com/patent/US6931544 | title=US6931544B1: Method and apparatus for executing multiple JAVA(™) applications on a single JAVA(™) virtual machine | publisher=U.S. Patent Office | access-date=July 13, 2022}}</ref>

Initially, SCO had made a strong push for Gemini among the SCO user base; the August 1996 instance of the annual [[SCO Forum]] conference dedicated an extra two days to a series of "Gemini Fast-Track" sessions.<ref name="proceedings-96">{{cite book | title=SCO Forum96: Proceedings and Conference Guide | publisher=Santa Cruz Operation | date=1996 | pages=12, 16–19}}</ref>  But by a year later, SCO had decided it would not push the migration that quickly, although it still expected that within two or three years all users would migrate.<ref name="ci-udk-1997">{{cite news | title=SCO Prepares the Way for a Smooth Change from OpenServer to unixWare | work= Computergram International | date=August 26, 1997 <!--, CGN08260011.--> | via= Gale General OneFile <!-- (accessed May 2, 2021).--> | url=https://link.gale.com/apps/doc/A19704123/ITOF?u=wikipedia&sid=ITOF&xid=24ebc0c1 }}</ref>  One SCO executive said, "We mustn't disenfranchise the OpenServer path ... those guys [SCO resellers] are our lifeblood" and recalled that a few years earlier, SCO resellers had continued to sell Xenix-based systems even after SCO had stopped development work on Xenix.<ref name="ci-udk-1997"/>

When released as a product, Gemini was called UnixWare 7;<ref name="cnet-uw7-1997"/> the "7" was picked to reflect the summed merge of OpenServer 5 and UnixWare 2.<ref>{{cite journal | url=https://books.google.com/books?id=SjCsT2rw4eEC&pg=PA45 | title=SCO–vs.–IBM | journal=AUUGN | volume=24 | number=2 | date=June 2003 | page=45 <!-- enough -->}}</ref> SCO referred to UnixWare 7 as being based on an SVR5 kernel,<ref name="iw-uw71-1999"/> indicating a significant jump over the existing SVR4.2, although the SVR5 designation was not picked up by the Unix world at large.<ref name="rosen-etal"/> UnixWare 7 was announced in March 1998 at an event in New York.<ref name="fp-uw7-1998">{{cite news | url=https://www.newspapers.com/clip/76447776/ | title=Santa Cruz hopes Unix servers nix Microsoft's NT | author-first=Amanda | author-last=Lang | newspaper=The Financial Post | location=Toronto | date=March 10, 1998 | page=10 | via=Newspapers.com}}</ref>

SCO committed itself to still maintaining and improving the OpenServer product for a couple of years, but made clear that it would never be expanded to [[64-bit architecture]]s.<ref name="cnet-uw7-1997"/>  Thus at that point, OpenServer users would have to migrate.<ref name="nw-uw7-1998"/>

=== "Big E" and DCAP ===
[[Image:SCO offices in Murray Hill New Jersey April 1998.jpg|thumb|right|Much of the DCAP work was done here in 1998 at the SCO offices in Murray Hill, New Jersey.]]
SCO management was intent on selling UnixWare through OEM deals with hardware manufacturers aiming at the enterprise market, and towards this end in 1996 they announced the "Big E" initiative that would standardize UnixWare as the operating system on these systems and that would attract independent software vendors to make their products available on such systems.<ref name="ci-BigE-1996">{{cite news | title=Santa Cruz Operation Chief Mohan Explains How He Will End Days of Underachivement | work= Computergram International | date= August 30, 1996 <!--, CGN08300008. --> | via=Gale General OneFile <!-- (accessed April 29, 2021). --> | url=https://link.gale.com/apps/doc/A18639022/ITOF?u=wikipedia&sid=ITOF&xid=2c24ac2b | author-first=Nick | author-last=Patience}} <!-- also visible at https://techmonitor.ai/technology/sco_chief_says_he_will_end_days_of_underachievement --></ref>  Hardware vendors already supporting UnixWare 7 included IBM, HP, Compaq, and Tandem, despite some of them offering their own Unix flavors on their high-end RISC systems.<ref name="nw-uw7-1998">{{cite news | url=https://books.google.com/books?id=fhsEAAAAMBAJ&pg=PA60 | title=SCO makes run at glass house | author-first=James | author-last=Niccolai | author2-first=Marc | author2-last=Songini | magazine=Network World | date=March 16, 1998 | pages=1, 60}}</ref>  In particular, SCO had deals with IBM to sell UnixWare on the [[IBM Netfinity]] system.<ref name="ci-earnings-1999"/>

In February 1998, SCO announced the creation of the Data Center Acceleration Program (DCAP), which sought to add features related to reliability, availability, and scalability to UnixWare 7 in order to make it fully suitable for high-end, Intel-based systems deployed in [[data center]]s.<ref name="hpe-dcap">{{cite web | url=https://h20195.www2.hpe.com/v2/gethtml.aspx?docname=c04282179 | title=QuickSpecs: SCO UnixWare 7: Compaq and SCO Partnership: Compaq Support for SCO UnixWare 7 | publisher=Hewlett Packard Enterprise | access-date=April 26, 2021}}</ref>  The funding for DCAP came from Intel and from four hardware OEM providers of Intel-based servers: Compaq, Data General, ICL, and Unisys.<ref name="ci-dcap-1998">{{cite news | title= SCO Signals Shift to High-End with UnixWare 7 | work= Computergram International | date= March 11, 1998 <!--, CGN03110001. --> | via=Gale General OneFile <!-- (accessed May 1, 2021). --> | url=https://link.gale.com/apps/doc/A20377765/ITOF?u=wikipedia&sid=ITOF&xid=357b6760 }}</ref>  The features to be added to UnixWare 7 included six-way clustering and support for 16-way [[ccNUMA]] servers.<ref name="ci-dcap-1998"/>  As one analyst for [[International Data Group]] said, "UnixWare is moving upmarket."<ref name="iw-dcap-1999"/>  The program was also intended to help SCO fund development of UnixWare for the Merced architecture and give the four hardware vendors access to the resulting 64-bit OEM UnixWare without requiring further porting to each vendor's specific hardware.<ref name="nw-dcap64-1998">{{cite news | url=https://books.google.com/books?id=gBsEAAAAMBAJ&pg=PA12 | title=SCO gets dough for 64-bit Unix revamp | author-first=Christine | author-last=Burns | magazine=Network World | date=March 2, 1998 | page=12}}</ref>

A year later, at the [[CeBIT]] show in March 1999, SCO announced the release of UnixWare 7, Data Center Edition, as the product of the DCAP effort.<ref name="iw-dcap-1999">{{cite news | url=https://books.google.com/books?id=G1AEAAAAMBAJ&pg=PA12 | title=SCO opens curtain on UnixWare 7 | author-first=Terho | author-last=Uimonen | agency=IDG News Service | magazine=InfoWorld | date=March 22, 1999 | page=12 }}</ref>  In addition to the sponsoring companies, IBM and Sequent both said they would offer the data center edition on their servers.<ref name="iw-dcap-1999"/>  In terms of [[High availability#Percentage calculation|high availability figures]], the data center edition promised 99.99% availability ("four nines") at the time of release, with 99.995% ("four and a half nines") to arrive by 2000.<ref name="ci-dcap-1999">{{cite news | title=SCO Data Center UnixWare to Debut at CeBIT | work=Computergram International | date= February 25, 1999 | via=Gale General OneFile <!-- (accessed April 27, 2021). --> | url=https://link.gale.com/apps/doc/A53958754/ITOF?u=wikipedia&sid=ITOF&xid=6a41c84d | author-first=William | author-last=Fellows }}</ref> Another avenue towards capturing space in the enterprise was work that SCO did in conjunction with Compaq and Tandem towards the 1998 release of [[UnixWare NonStop Clusters]].<ref>{{cite news | url=https://techmonitor.ai/technology/sco_taking_clustered_unixware_multiplatform | title=SCO Taking Clustered UnixWare Multiplatform | work=Computergram International | date=July 15, 1998}}</ref>

The data center release came out at the same time as UnixWare 7.1 release, which offers six different edition bundles in all.<ref name="iw-uw71-1999"/>  A review in ''[[InfoWorld]]'' said that "UnixWare 7 is the sturdiest and most feature-rich Unix ever ported to Intel processors" and added that, especially with the addition of the webtop interface, the 7.1 release was equal in polish to Windows NT.<ref name="iw-uw71-1999">{{cite news | url=https://books.google.com/books?id=EVAEAAAAMBAJ&pg=RA1-PA63 | title=Sturdy UnixWare aims to oust NT, NetWare | author-first=Tom | author-last=Yager | magazine=InfoWorld | date=April 12, 1999 | page=60C}}</ref>  UnixWare 7.1 started seeing some strong sales.<ref name="ci-earnings-1999"/>

Through several changes of corporate ownership, UnixWare 7 would remain a supported product into the 2020s.<ref>{{cite web | url=https://www.xinuos.com/products/unixware-7/ | title=SCO UnixWare 7 Definitive 2018 | publisher=Xinuos | access-date=May 12, 2021}}</ref>

Another multi-company initiative that SCO led was the [[Uniform Driver Interface]] project (UDI), which sought to establish an OS-neutral and platform-neutral portable interface for writing [[device driver]]s.<ref name="ci-udi-1998">{{cite news | url=https://techmonitor.ai/techonology/intel_backs_uniform_driver_effort_server_standards | title=Intel Backs Uniform Driver Effort, Server Standards | work=Computergram International | date=September 16, 1998 }}</ref>  The UDI project had the backing of Intel, HP, IBM, Compaq, Sun, and others, as well as the involvement of independent hardware vendors such as [[Adaptec]].<ref>{{cite news | url=https://books.google.com/books?id=v1EEAAAAMBAJ&pg=PA6 | title=Intel unveils Unix initiative | author-first=Andy | author-last=Santoni | magazine=InfoWorld | date=September 21, 1998 | page=6}}</ref>  UDI details were heavily discussed at the 1999 edition of SCO Forum;<ref>{{cite web | url=https://udi.certek.com/Presentations/SCO_Forum_1999/ | title=UDI Sessions at SCO Forum1999 | publisher= CerTek Software Designs | access-date=May 3, 2021}}</ref> and UDI materialized in SCO operating systems with later UnixWare 7 and OpenServer 5 releases.<ref>{{cite web | url=http://www.sco.com/developers/udi/ | title=SCO and the Uniform Driver Interface (UDI) | work=SCO Developer Network | publisher=Xinuos | access-date=May 3, 2021}}</ref><!-- not incorporated until UW 7.1.2 and OSR 5.0.7 -->

===Tarantella product===
{{main|Tarantella, Inc.}}
October 1997 saw the first release of a new product from the Client Integration Division.<ref name="ci-tta-1999"/>  [[Tarantella (product)|Tarantella]] is an application brokering platform that sits between back-end applications running on various platforms and Java-enabled web browser clients.<ref name="iw-tta-97"/>  An initial limitation was that it supported applications running on Unix but needed third-party software in order to handle mainframe or Windows applications.<ref name="iw-tta-97"/>  One selling point of Tarantella is that users could begin working on an application on one client, have to stop working for whatever reason, and then resume working from that point on from another client.<ref name="iw-tta-97"/>  A review in ''[[InfoWorld]]'' viewed Tarantella was promising but needing more work.<ref name="iw-tta-97">{{cite news | url=https://books.google.com/books?id=zjsEAAAAMBAJ&pg=PA111 | title=Apps Unbound | author-first=Jeff | author-last=Symoens | author2-first=Lai-Han | author2-last=Szeto | magazine=InfoWorld | date=November 24, 1997 | pages=1, 111}}</ref>

[[Image:SCO office and view out on Vision Park Cambridge England March 1999.jpg|thumb|left|View out of the SCO Cambridge office, 1999]]

Later version 1.x releases support more application types, such as [[AS/400]] and [[IBM mainframe]] applications.<ref name="ci-tta-1999"/>  More client types were added as well, including native clients to remove the dependency on Java support.<!-- TODO citing -->  The product also added scalability and security features to better support larger enterprises and secure application access over the Internet.<!-- TODO citing -->

A rebranding to Tarantella Enterprise II took place in late 1999.<ref name="scs-cnbc-1999"/>  This release added support for Windows applications via native support for Microsoft's [[Remote Desktop Protocol]].<ref name="ci-tta-1999">{{cite news | url=https://techmonitor.ai/technology/sco_adds_rdp_to_tarantella_takes_on_citrix | title=SCO Adds RDP to Tarantella, Takes on Citrix | author-first=Timothy Prickett | author-last=Morgan | work=Computergram International | date=December 7, 1999}}</ref>  At that point, the primary competitor to Tarantella became the [[MetaFrame]] product from [[Citrix Systems]].<ref name="cw-tta-2000"/>  While Citrix was the dominant player in this space, it did not yet support Unix applications, whereas Tarantella does.<ref name="pcw-tta-1999"/><ref name="ci-tta-1999"/>

Significant revenue from Tarantella did not happen during the 1990s, as it had a [[long sales cycle]] due to lengthy customer evaluations.<ref name="ci-earnings-1999"/>  SCO then sought to market Tarantella as a platform for [[application service provider]]s to use<ref name="cw-tta-2000">{{cite news | url=https://www.computerworld.com/article/2592474/sco-makes-asp-play.html | title=SCO makes ASP play | author-first=Dominique | author-last=Deckmyn | work=Computerworld | date=March 1, 2000}}</ref> and as a way that companies could host and outsource applications.<ref name="pcw-tta-1999"/>  As part of this, SCO sought to use Tarantella as a way of promoting itself as a new [[dot com company]] as opposed to its twenty-year history as an operating system provider.<ref name="pcw-tta-1999">{{cite news | author-last=Berinato | author-first=Scott | title=SCO taking Tarantella to NT: Company moves away from UnixWare, focusing instead on application hosting | magazine=PC Week | date=December 13, 1999 | page=20 | via= Gale General OneFile <!--(accessed May 15, 2021).--> | url=https://link.gale.com/apps/doc/A58238958/ITOF?u=wikipedia&sid=ITOF&xid=f6149e9b }}</ref>

SCO were pioneers in the notion of a [[web desktop]], or webtop.<!--TODO see Ron Record stuff there --> This was also central to the idea of how Tarantella presents applications to a user.  This was integrated with Tarantella to provide a UnixWare 7 webtop in 1999 which organizes access to UnixWare and its applications via any Java-enabled web browser.<ref>{{cite news | url=http://www.cnn.com/TECH/computing/9908/19/unix.idg/ | title=Web interface makes Unix friendlier | author-first=Alexandra | author-last=Krasne | agency=IDG | work=CNN | date=August 19, 1999 }}</ref>  To some industry reviewers, the OS webtop was a compelling feature.<ref name="iw-uw71-1999"/>

=== Customers and financial state ===
Between 1996 and 1997, SCO's share of the Unix systems sold rose from 36 percent to 40 percent.<ref name="fp-uw7-1998"/>  By 1998, the figure was over 40 percent.<ref name="cw-regroups-1998"/>  And in 1998, shipments of SCO Unix systems grew by 58 percent over 1997, a greater increase than for any other server-oriented flavor of Unix.<ref name="iw-dcap-1999"/>  The Unix market as a whole was considered strong, despite fears of the increasing power of Windows NT.<ref name="fp-uw7-1998"/>  And by 1998, SCO had 85 percent of the Unix-on-Intel market.<ref name="nw-dcap64-1998"/>  At the end of the 1990s, SCO Unix systems had around 15,000 [[value-added reseller]]s (VARs) and an infrastructure presence of some kind in 80 countries around the world.<ref name="dn-closed-2001"/>  SCO also had a strong business in replicated sites, meaning retail companies where there was a SCO system in each store of a chain; such customers included fast food outlets such as [[McDonald's]], [[Pizza Hut]], and [[Taco Bell]];<ref name="iw-monterey-2002"/><ref name="pr-pizza-1994"/><ref name="nw-uw7-1998"/> pharmacy chains such as [[CVS Pharmacy]] and [[Walgreens]];<ref name="nw-uw7-1998"/> and other chains such as [[Kmart (United States)|Kmart]] and [[Radio Shack]].<ref name="krns-1991"/>  Other well-known companies who were SCO customers included [[Northwest Airlines]],<ref name="krns-1991"/> as well as [[Goodyear Tire & Rubber]], [[Nasdaq, Inc.]], and [[Lucent Technologies]].<ref name="iw-monterey-2002"/>  <!--TODO add if sources: KFC, Pep Boys, Burger King. --> <!--TODO break out which are UW?  Nasdaq, Lucent of these for sure --> <!--TODO add UW if sources: shoppers drug mart, Comverse Technologies (UW2) -->  SCO was named to ''[[PC Magazine]]''{{'}}s "100 Most Influential Companies" list in both 1997<ref>{{cite web | url=https://core.ac.uk/download/pdf/7040449.pdf | title=Where Are The World's Top 100 I.T. Firms – And Why? | author-first=R. D. | author-last=Norton | publisher=Bryant College | date=June 1998}}</ref> and 1998.<ref>{{cite news | url=https://archive.org/details/bub_gb_U9n74ngfDU8C/page/n147/mode/2up | title=The PC Magazine 100 Most Influential Companies | author-first=Jake | author-last=Kirchner | magazine=[[PC Magazine]] | date=September 22, 1998 | pages=100, 128}}</ref><!-- does not appear to have been on the list in 1999; don't see lists for years before or after this -->
{{image frame
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|caption=SCO profit/loss by year (as a public company, in millions of dollars)<ref name="ar-1996"/><ref name="ar-2000"/>
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The company did not have good financial results during this time.<ref name="ci-losses-1997"/>  By 1997, there were few independent operating system vendors left in the industry other than SCO.<ref name="wsj-1997"/>  Being a software-only company whose revenue was only around the $200 million mark left SCO with marginal resources to compete with Unixes from the big RISC vendors like Digital, HP, and Sun.<ref name="nw-dcap64-1998"/>
Engineering costs were high,<ref name="ci-BigE-1996"/> as UnixWare 7 and Tarantella each resulted from two years of research and development activity.<ref name="ci-losses-1997">{{cite news | title=Santa Cruz Operation Announces Losses After Restructuring | work=Computergram International | date= October 28, 1997 |<!-- , CGN10280022. --> via= Gale General OneFile |access-date= April 17, 2021| url= https://link.gale.com/apps/doc/A19931658/ITOF?u=wikipedia&sid=ITOF&xid=ce400c53 }}</ref>
During 1997 there were some reductions in staff and closing of regional offices.<ref name="ci-losses-1997"/>

In April 1998, Doug Michels was named as president and CEO of the company, with Alok Mohan becoming chairman of the board.<ref name="scs-doug-1998">{{cite news | url=https://www.newspapers.com/clip/75858416/ | title=SCO elects co-founder as CEO | author-first=Steve | author-last=Perez | newspaper=Santa Cruz Sentinel | date=April 22, 1998 | page=B-5 | via=Newspapers.com}}</ref>  Michels said that he never aimed to become CEO, preferring to remain more technology-focused, but that he had always had a lot of visibility into the CEO role and was "obviously very emotionally and intellectually attached to the company" and its stakeholders.<ref name="scs-doug-1998"/>

One of Michels' first actions was to oversee a switch to electronic software licensing for SCO's products.<ref name="cnet-lic-1998"/>  The third quarter of fiscal 1997 had included a $23 million charge for reduction in channel inventory,<ref name="ci-losses-1997"/> and Michels said he was determined to eliminate issues related to the size of physical inventory.<ref name="cnet-lic-1998">{{cite news | url=https://www.cnet.com/news/sco-warns-of-sharp-shortcoming/ | title=SCO warns of sharp shortcoming | publisher=CNET | date=July 9, 1998}}</ref>  He stated that, "SCO believes electronic licensing and distribution of products will be a standard for the industry."<ref name="cnet-lic-1998"/>  The channel inventory was emptied by July 1998 and the new electronic licensing was in effect the following month for a new point release of OpenServer 5, the product that was still accounting for some 80 percent of SCO's Unix revenues.<ref>{{cite news | url=https://techmonitor.ai/techonology/sco_updates_its_original_openserver_unix | title=SCO Updates Its Original OpenServer Unix | work=Computergram International | date=August 18, 1998}}</ref>

=== "Monterey" ===
[[Image:Project Monterey T-shirt.jpg|thumb|left|upright=0.72|Project Monterey T-shirt given to employees of the companies involved]]
During the mid- to late 1990s, many in the computer industry believed that Intel's under-development 64-bit architecture, known as [[IA-64]] and code-named "Merced", would dominate the marketplace once released.<ref name="r-monterey-2005"/>  But the architecture was very different from IA-32 and migrating operating systems and tools to it was very expensive.<ref name="geek1">{{cite news
 | url=https://www.cnet.com/news/intels-merced-chip-may-slip-further/
 | title=Intel's Merced chip may slip further
 | last=Shankland
 | first=Stephen
 | date=July 8, 1999
 | publisher=CNET
 }}</ref>  SCO needed a well-funded hardware company to ally with; the earlier 3DA initiative with HP had failed,<ref name="r-monterey-2005"/> and discussions about SCO being compatible with the "Bravo Unix" from Compaq and its [[Digital Unix]] had not gotten far.<ref>{{cite news | url=https://techmonitor.ai/techonology/unixware_apps_will_run_on_bravo_unix | title=UnixWare Apps Will Run on Bravo Unix | work=Computergram International | date=September 15, 1998}}</ref>  When IBM proposed an alliance, SCO jumped at the chance to further bolster its entry into the enterprise space.<ref name="r-monterey-2005"/>

The core idea of [[Project Monterey]] was to take elements from IBM's [[AIX]], Sequent's [[DYNIX/ptx]], and SCO's UnixWare, to form a merged 64-bit Unix for Intel's Merced architecture.<ref name="cw-regroups-1998"/><ref name="scs-monterey-1998"/>  This merged OS was supposed to become available at the same time as Merced, in mid-2000.<ref name="nw-monterey-1998">{{cite news | author-last=Connor | author-first=Deni | title=Monterey: Intel's premier Unix OS | magazine= Network World | date= November 9, 1998 | page=19 | via=Gale General OneFile <!--(accessed May 2, 2021).--> | url= https://link.gale.com/apps/doc/A53196631/ITOF?u=wikipedia&sid=ITOF&xid=1e10c97c }}</ref>

Along the way, there would be stages of earlier deliverables.<ref name="nw-monterey-1998"/>  IBM pledged as part of the deal to make UnixWare 7 its Unix of choice for high volume [[IA-32]] systems and to devote considerable efforts towards selling UnixWare 7 through its sales and marketing mechanisms.<ref name="scs-monterey-1998">{{cite news | url=https://www.newspapers.com/clip/76939945/ | title=SCO, IBM go after Windows NT | author-first=Donna | author-last=Kimura | newspaper=Santa Cruz Sentinel | date=October 27, 1998 | page=B-4 | via=Newspapers.com}}</ref>  This would be aided by IBM including its middleware and some AIX technology into 32-bit UnixWare, and conversely some UnixWare technology would be incorporated into future versions of AIX.<ref name="iw-monterey-1998"/><ref name="nw-monterey-1998"/>  IBM would gain access to SCO's experience with Unix on Intel as well as access to SCO's reseller channel.<ref name="cw-regroups-1998">{{cite news | url=https://books.google.com/books?id=GGyHEy0CvQYC&pg=PT104 | title=Unix regroups against NT at the high end | author-first=Jaikumar | author-last=Vijayan | newspaper=Computerworld | date=November 2, 1998 | pages=1, 105}} Includes "Vendors pitch 64-bit Unix for Merced" sidebar.</ref>

Part of the motivation for Monterey was another attempt by Unix vendors to show a clear advantage for Unix in the high-end enterprise space against Microsoft's latest NT offering, now being branded as [[Windows 2000]] and scheduled to be available for Merced as well.<ref name="cw-regroups-1998"/><ref name="nw-monterey-1998"/>  Towards that end, Intel said they would create a multi-million dollar fund for ISVs to develop for the 64-bit Monterey.<ref name="nw-monterey-1998"/><ref name="crn-monterey-1998"/>  ''[[InfoWorld]]'' stated that IBM had "stunned the industry" with the move,<ref name="iw-monterey-1998">{{cite news | author-last=Weil | author-first=Nancy | author2-first=Ed | author2-last=Scannell | author3-first= David | author3-last=Pendery | title=IBM rallies industry giants behind 64-bit Unix version | magazine= InfoWorld | date=November 2, 1998 | page= 36 | via=Gale General OneFile <!--(accessed May 3, 2021).--> | url= https://link.gale.com/apps/doc/A53170682/ITOF?u=wikipedia&sid=ITOF&xid=83c3f7e4 }}</ref> in part because IBM was playing catch-up in the Merced space.<ref name="crn-monterey-1998"/>

[[Image:IBM Toronto Lab 1999.jpg|right|thumb|Several engineers from SCO's New Jersey office about to enter the IBM Toronto Lab in February 1999, in order to discuss aspects of Project Monterey]]

The project was announced by the involved companies on October 26, 1998, in New York.<ref name="scs-monterey-1998"/>  An IBM executive said, "IBM is totally committed to making this effort a success."<ref name="crn-monterey-1998">{{cite news | author-last=Hausman | author-first=Eric | author2-first= Stuart | author2-last=Glascock | title=Just when You Thought it was Safe: A New Unix | magazine= Computer Reseller News  | date=November 2, 1998 | pages= 7, 14 | url= https://www.proquest.com/docview/227566409 | id={{ProQuest|227566409}} }}</ref>  One SCO executive said that Monterey was "probably the biggest deal SCO has done."<ref name="scs-cnbc-1999"/>

But not every industry observer was enthusiastic; the story about the deal in ''[[Computer Reseller News ]]'' began, "Just what the world needs: another Unix."<ref name="crn-monterey-1998"/>  In any case, the project proceeded, with AIX becoming the dominant technology within it rather than UnixWare.<ref>{{cite news | author-last=Songini | author-first=Marc | title=IBM: Monterey isn't the end of AIX | magazine=Network World | date= August 6, 1999 | page= 15 | via= Gale General OneFile <!--(accessed May 15, 2021).--> | url= https://link.gale.com/apps/doc/A55403107/ITOF?u=wikipedia&sid=ITOF&xid=6afcd9f6 }}</ref>  By October 1999, a year after the announcement, the work-in-progress Monterey was said to be up and operational on early silicon versions of [[Itanium]], as Merced was by then officially called, and able to run both 32-bit UnixWare binaries and 64-bit natively built binaries on it.<ref name="ci-earnings-1999"/>

However, as 2000 began, things were changing at IBM, as there was a corporate-wide strategic initiative to get behind the open-source [[Linux]] operating system.<ref name="r-monterey-2005">{{cite news | url=https://www.theregister.com/Print/2005/04/30/groklaw_monterey_mystery/ | title=SCO, Groklaw and the Monterey mystery that never was | author-first=Andrew | author-last=Orlowski | work=The Register | date=April 30, 2015}}</ref>  A few months later IBM released a major upgrade to AIX, but instead of it being associated with Monterey, it was called AIX 5L with the 'L' indicating an affinity for Linux.<ref name="r-monterey-2005"/>  It was clear to industry observers that IBM considered Monterey to be over with.<ref name="hpc-monterey-2000">{{cite news | url=https://www.hpcwire.com/2000/08/25/is-ibm-really-killing-project-monterey/ | title=Is IBM Really Killing Project Monterey? | publisher=HPCWire | date=August 25, 2000}}</ref>   IBM's decision to shelve Monterey left the SCO product line without a 64-bit Unix solution.<ref name="iw-monterey-2002">{{cite news | url=https://www.informationweek.com/sco-exec-says-the-company-may-revive-project-monterey/d/d-id/1016093 | title=SCO Exec Says The Company May Revive Project Monterey | magazine=Information Week | date=August 30, 2002}}</ref>  Itanium was further delayed, and when it did come out, it failed to succeed in the marketplace; so Project Monterey was a failure from multiple perspectives.<ref name="r-monterey-2005"/>

=== Y2K surge and recede ===
The [[open-source-software movement]] was something that SCO had to be cognizant of, and for a number of years [[SCO Skunkware]], a frequently updated collection of [[Open-source software|open source]] packages built for SCO platforms, had helped bridge the gap between the traditional and open source development worlds.<ref>{{cite news | archive-url=https://web.archive.org/web/20001121055100/http://www.scoworld.com/html/jfm99dev.html | title=SCO and the Open Source Movement | magazine= SCO World | date= February 1999 | url=http://www.scoworld.com/html/jfm99dev.html | archive-date=November 21, 2000 | author-first=David | author-last=Eyes | author2-first=Ronald Joe | author2-last=Record }}</ref>  Then in an attempt to deal with the growing popularity of Linux as a low-cost operating system, during 1999 SCO began offering consulting services for Linux.<ref name="scs-record-1999"/>  SCO also engaged in partnerships with, and investments into, various Linux companies.<ref name="scs-cnbc-1999"/>  This included agreements to sell [[Linux distribution]]s from [[Caldera Systems]], [[SUSE S.A.|SuSE]], and [[TurboLinux]],<ref name="slt-cald-2000"/> as well as a partnership to provide professional services to customers of TurboLinux server farms and an investment in the [[LinuxMall]] portal site.<ref name="ci-earnings-1999"/>  One motivation for some of these initiatives was an effort by SCO to enlarge its professional services operation, as by 1999 such activity only comprised about 5 percent of SCO's total revenues.<ref name="ci-earnings-1999"/> Finally, a vice president for marketing was hired who had a Linux background.<ref name="scs-linux-1999"/>

[[Image:SCO office lab space Murray Hill New Jersey June 2000.jpg|thumb|left|upright=0.67|Unix on a PC: lab racks in the Murray Hill, New Jersey, office]]

During 1998 and 1999, much of the computer industry, including SCO, was focused on dealing with the [[Y2K problem]].<ref name="sarai-rem"/>  SCO saw a surge in sales as customers bought new, Y2K-compliant products and upgrades to replace the vulnerable software they were running.<ref name="scs-spirit"/>  As a consequence, the company began reporting better financial results during 1999 and its stock began a slow upward climb, starting from a prior low point of 2{{frac|3|8}}.<ref name="scs-linux-1999">{{cite news | url=https://www.newspapers.com/clip/76443864/ | title=SCO stock climbs; Linux growth cited | author-first=Jennifer | author-last=Pittman | newspaper=Santa Cruz Sentinel | date=August 31, 1999 | page=B-4 | via=Newspapers.com }}</ref>  To meet the demand, SCO added more staff.<ref name="scs-spirit"/>

In October 1999, the company announced record earnings for a quarter and a year and its highest yearly revenue mark at $224 million.<ref name="scs-record-1999">{{cite news | url=https://www.newspapers.com/clip/75926703/ | title=SCO sets earnings record | author-first=Donna | author-last=Kimura | newspaper=santa Cruz sentinel | date=October 27, 1999 | page=B-5 | via=Newspapers.com}}</ref>  The results broke a four-year streak of SCO losing money.<ref name="ci-earnings-1999">{{cite news | title=SCO Ends Four-Year Slump With $17m Profits, New Business | work=Computergram International | date= October 27, 1999 | via= Gale General OneFile <!-- (accessed April 17, 2021). --> | url=https://link.gale.com/apps/doc/A56955961/ITOF?u=wikipedia&sid=ITOF&xid=6a741805 }}</ref>  The company also had the best cash position in its history, with some $62 million in that form or in short-term investments.<ref name="scs-cnbc-1999"/>   As a result, its stock price rose to a new high of 14{{frac|15|16}}.<ref name="scs-record-1999"/>  Michels expressed optimism, saying the year was "a turning point" and "the beginning of very strong ongoing business."<ref name="ci-earnings-1999"/>

{{Quote box|quote=The growth spurt was fake, and the reality of it was we were stealing from our future. After Y2K, sales dropped like a rock. Customers were done upgrading. We had to cut staff. The stock dropped.|source=—Doug Michels in 2012, reflecting upon part of what led to the end for the Santa Cruz Operation.<ref name="scs-spirit"/>|width=27%|align=right|style=padding:8px;}}

The stock's biggest surge happened in mid-December 1999, when Steve Harmon, an influential analyst covering technology companies, went on [[CNBC]] and included SCO on his list of ten stock picks for 2000.<ref name="scs-cnbc-1999">{{cite news | url=https://www.newspapers.com/clip/75929403/ | title=SCO stock smashes old record | first=Donna | last= Kimura | date=December 22, 1999 |newspaper=Santa Cruz Sentinel | pages=A-1, A-12 | via=Newspapers.com}}</ref> The stock promptly jumped by 7 points,<ref name="scs-cnbc-1999"/> and in late December 1999 the stock reached an all-time high of 35{{frac|7|8}}.<ref name="nyt-shortfall-2000"/>
SCO's value was seen in having a solid core business with earnings and revenue; in having some kind of Linux play; and in having a new-technology, Internet-capitalizing product in Tarantella.<ref name="scs-linux-1999"/><ref name="scs-cnbc-1999"/>  An analyst for the [[GiGa Information Group]] agreed that SCO was a company to watch in 2000.<ref name="scs-cnbc-1999"/>

But the Y2K-based splurge would not last.<ref name="nyt-shortfall-2000"/>  In March and July 2000, SCO  announced earnings shortfalls, with SCO's Unix products selling slowly once Y2K anxiety was past.<ref name="nyt-shortfall-2000">{{cite news | url=https://www.nytimes.com/2000/07/11/technology/santa-cruz-operation-warns-of-earnings-shortfall.html | title=Santa Cruz Operation Warns of Earnings Shortfall | agency=Reuters | newspaper=The New York Times | date=July 11, 2000}}</ref> The increasing popularity of Linux solutions had resumed taking its toll as well.<ref name="slt-cald-2000"/>  By July, only seven months after its peak at over 35, the stock price had crashed to below 5.<ref name="slt-cald-2000"/>   The company announced it was cutting costs as a result<ref name="nyt-shortfall-2000"/> and that it had hired investment bankers [[Chase H&Q]] to explore "strategic combinations" with other companies.<ref name="slt-cald-2000"/>

Fundamentally, SCO was doing battle on one hand in a commercial software world increasingly dominated by Microsoft and on the other hand in a world where open source Linux was undermining commercial software itself.<ref name="scs-parting"/>  These two factors made constantly pleasing Wall Street investors with double-digit growth figures an imposing task.<ref>{{cite news | url=https://www.newspapers.com/image/81872290/ | title=SCO stock, CEO on a high note | author-first=Jennifer | author-last=Pittman | newspaper=Santa Cruz Sentinel | date=August 17, 1999 | pages=A-1, A-12 | via=Newspapers.com}}</ref>  In particular, Linux posed an existential threat to SCO OpenServer's low-end marketshare;<ref name="dqi-2000"/> as one analyst said, "Linux can give you the same value proposition [as SCO] – a Unix on cheap hardware – for less money."<ref name="cw-3split-2000"/>  And despite all the efforts, UnixWare had not been fully successful in competing in the high-end market,<ref name="cw-3split-2000"/> and now Linux was threatening UnixWare's share of that as well.<ref name="dqi-2000">{{cite news | url=https://www.dqindia.com/tarantella-inc-sco-s-second-coming/ | title=Tarantella Inc SCO's Second Coming | publisher=Dataquest India | date=September 22, 2000}}</ref>  As a result, by mid-2000, SCO's market position, and the company itself, was rapidly collapsing.<ref name="scs-parting"/><ref name="cw-layoff-2000"/>

==Final history==
=== Asset sale and change of name ===
{{See also|Tarantella, Inc.}}
In March 2000, at the time of the first announced earnings shortfall, SCO had reorganized into three divisions: Server Software, Professional Services, and Tarantella.<ref name="cw-3split-2000">{{cite news | url=https://books.google.com/books?id=I2-fqD0_mI8C&q=%22santa+cruz+operation%22+revenue+1999&pg=PA32 | title=SCO Reorganizes, Expects Low Sales | author-first=Dominique | author-last=Deckmyn | work=Computerworld | date=March 27, 2000 | page=32}}</ref>    The split was intended to highlight Tarantella as a product independent of SCO Unix,<ref name="cw-3split-2000"/> and was seen by industry analysts as a prelude to some or all of the divisions being sold.<ref name="cw-layoff-2000"/>  As one [[International Data Corporation]] analyst said, "SCO has to do something with their business model because their business is eroding."<ref name="slt-cald-2000">{{cite news | url=https://www.newspapers.com/image/613350450 | title=Caldera May Buy California Company | author-first=Guy | author-last=Boulton | newspaper=The Salt Lake Tribune | date=July 22, 2000 | pages=B-5, B-10 | via=Newspapers.com}}</ref>

[[Image:Forum 2000 quarry keynote Ransom Love speaking.jpg|thumb|right|End of an era: Caldera Systems addresses the SCO community at Forum 2000.]]
On August 2, 2000, following several months of negotiations, SCO announced that it would sell its Server Software and Services Divisions, including UnixWare, to the Linux company [[Caldera Systems]].<ref name="reg-deal">{{cite news |url=https://www.theregister.co.uk/2000/08/02/caldera_goes_unix_with_sco/ |title=Caldera goes Unix with SCO acquisition |author-first=Graham |author-last=Lea |author-link=Graham Lea (journalist) |work=The Register |date=August 2, 2000}}</ref><ref name="scs-deal">{{cite news |url=https://www.newspapers.com/image/95621724/?terms=sco%2Bcaldera |title=SCO spins off two divisions for cash, stock |author-first=Marina |author-last=Malinkoff |newspaper=Santa Cruz Sentinel |date=August 3, 2000 |pages=A1, A12 |via=Newspapers.com}}</ref>  The deal was complex, involving cash, stock, and loans, and difficult to evaluate monetarily, but based on the price of Caldera Systems stock at the time it was worth around $110–114 million.<ref name="zd-ring-ii">{{cite news |url=https://www.zdnet.com/article/red-hat-and-caldera-get-in-the-ring-pt-ii/ |title=Red Hat and Caldera get in the ring Pt II |author-first=Joseph C. |author-last=Panettieri |publisher=[[ZDNet]] |date=August 14, 2000}}</ref><ref name="scs-deal"/><ref name="dqi-2000"/>

The idea of the purchase from Caldera Systems' perspective is that it would gain access to SCO's large  VAR channel; the value of such channels was well known to former Novell chief [[Ray Noorda]], whose [[Canopy Group]] was funding Caldera Systems.<ref name="slt-cald-2000"/>  The announcement that SCO was selling its Unix assets to a Linux distribution company represented, in the view of Eric Raymond, the completion of the move from the commercial Unix industry to the open-source movement.<ref name="esr-art"/>  From Doug Michels' later perspective, the problem with Linux was not that it was open source and free itself, but rather that in August 1999, during the [[dot-com boom]], the Linux company [[Red Hat]] had been able to get $400 million during their IPO and was not expected to make a profit anytime soon, while SCO was an established public company closely watched by the stock market that was expected to make a profit and had only around $50 million in cash.<ref name="doug-video"/><!-- 15:30 -->  By this time, the SCO stock price was down around 2{{frac|1|2}}.<ref name="scs-parting"/>  Thus when the chance came to merge with Caldera Systems, which was in a generally similar position as Red Hat although with less cash, SCO took it.<ref name="doug-video"/><!-- 17:30 -->

SCO was much the bigger company, with 900 employees at that point to Caldera Systems' 120.<ref name="zd-ring-ii"/>  Throughout the year there had been layoffs from SCO,<ref name="scs-parting"/> including the shutting down of the Watford development office.<ref name="sec-10-k"/>  In addition a number of longtime SCO employees chose to leave the company.<ref name="scs-parting"/>  An especially large layoff took place in September 2000, soon after the Caldera Systems announcement, when 190 employees were let go, comprising 19 percent of the company's workforce.<ref name="cw-layoff-2000">{{cite news | url=https://www.computerworld.com/article/2597095/sco-lays-off-19--of-its-staff-as-it-repositions-itself.html | title=SCO lays off 19% of its staff as it repositions itself | author-first=Todd R. | author-last=Weiss | work=Computerworld | date=September 8, 2000}}</ref>  This layoff included 40 employees in Santa Cruz itself.<ref name="scs-parting"/>

The SCO acquisition was originally scheduled to close in October 2000,<ref name="scs-deal"/> but got delayed due to concerns from the Securities and Exchange Commission regarding the details of the merger.<ref name="cnet-delay">{{cite news |url=https://www.cnet.com/news/caldera-deal-provides-ammunition-against-red-hat/ |author-first=Stephen |author-last=Shankland |publisher=CNET |title=Caldera deal provides ammunition against Red Hat}} c. February 1, 2001 (date on article now on website is wrong).</ref>  However, the two companies' support organizations did get combined during this time.<ref name="cnet-delay"/>  In addition, there was confusion among the SCO customer base about the fate of OpenServer.<ref name="arX-cnet"/>  So in February 2001, the deal was renegotiated to include OpenServer in what was sold to Caldera Systems, although a percentage of OpenServer revenue would still go back to SCO.  The monetary terms of the deal were adjusted as well, with Caldera Systems paying SCO more cash than in the original agreement.<ref name="arX-cnet">{{cite news |url=https://www.cnet.com/news/0-1003-200-4771593.html |archive-url=https://web.archive.org/web/20010612095107/https://www.cnet.com/news/0-1003-200-4771593.html |archive-date=June 12, 2001 |title=Caldera Systems expands Unix acquisition plans |author-first=Stephen |author-last=Shankland |publisher=CNet |date=February 9, 2001}}</ref>

Finally on May 7, 2001, SCO completed the sale of its Server Software and Services Divisions, as well as UnixWare and OpenServer technologies, to Caldera Systems.<ref name="dn-closed-2001">{{cite news | url=https://www.deseret.com/2001/5/8/19585084/caldera-systems-completes-santa-cruz-acquisitions | title=Caldera Systems completes Santa Cruz acquisitions | newspaper=Deseret News | date=May 8, 2001}}</ref>  At that time Caldera Systems changed its name to Caldera International,<ref name="pr-finally">{{cite press release |url=https://pressreleases.responsesource.com/news/11796/caldera-completes-acquisition-of-two-sco-divisions-becomes-largest-linux/ |title=Caldera Completes Acquisition of Two SCO Divisions; Becomes Largest Linux Company in the World with Global Services/Support |publisher=Caldera Systems |date=May 8, 2001 |access-date=May 12, 2021 |archive-date=November 17, 2019 |archive-url=https://web.archive.org/web/20191117235843/https://pressreleases.responsesource.com/news/11796/caldera-completes-acquisition-of-two-sco-divisions-becomes-largest-linux/ |url-status=dead }}</ref> and the remaining part of SCO, the Tarantella Division, changed its name to [[Tarantella, Inc.]]<ref>{{cite press release
 |title= SCO Announces Official Closing of Sale of Two Divisions to Caldera
 |publisher= Tarantella
 |date= May 7, 2001
 |url= http://sec.edgar-online.com/2001/05/16/0001012870-01-500891/Section7.asp
 |access-date= January 23, 2007
 |url-status= dead
 |archive-url= https://web.archive.org/web/20071001003614/http://sec.edgar-online.com/2001/05/16/0001012870-01-500891/Section7.asp
 |archive-date= October 1, 2007
 }}</ref>

=== Aftermath ===
The sale of the company's Unix assets and renaming of what was left marked the end of an era for not just SCO but the town of Santa Cruz as well.<ref name="scs-parting">{{cite news | url=https://www.newspapers.com/clip/76095220/ | title=Parting Company: Local high-tech firm prepares to merge, spin off and disappear | author-first=Jennifer | author-last=Pittman | newspaper=santa Cruz Sentinel | date=October 16, 2000 | pages=A-1, A-10 | via=Newspapers.com}} See also "'New Caldera' employees to remain in Santa Cruz" and "Tarantella focuses on Web software" sidebars, same by-line, same pages.</ref>  The staff going to Caldera moved into the 400 Encinal building while the newly named Tarantella occupied the 425 Encinal structure.<ref name="scs-parting"/>

There were ironies in SCO's demise being largely from the effects of Linux, since SCO had been a pioneer of the open systems movement.  As one writer stated, "In some ways, SCO was Linux before Linux, popularizing Unix on low-cost Intel machines."<ref name="coursey-bad"/>

In August 2002, [[Caldera International]] renamed itself [[The SCO Group]] since the SCO Unix products were still their greatest source of revenue due to the large installed base they had. That entity soon started the [[SCO-Linux controversies]].

Those familiar with the Santa Cruz Operation, including those who worked there and those who wrote about it, became protective of that company's reputation, especially given the possible name confusion regarding the role The SCO Group played in the attacks on Linux.<ref name="sarai-rem"/><ref name="coursey-bad"/><ref name="stross-p5"/>  As former Santa Cruz Operation employee wrote later about The SCO Group, "I'll spare you the sordid legal details, but by then, it was no longer our SCO."<ref name="sarai-rem"/>

== Company culture ==
=== Santa Cruz atmosphere ===
{{Quote box|quote=The Santa Cruz Operation ... thoroughly reflected the ethos of the community for which it was named. ... SCO probably could have been a better-run company. My memory is that the stock analysts were fairly definite on that point, but it wouldn't have been nearly so much fun.|source=—Industry writer David Coursey in 2004.<ref name="coursey-bad"/>|width=27%|align=right|style=padding:8px}}

From its inception and co-founding by UC Santa Cruz graduate Doug Michels, the company drew upon the readily available technical talent who chose to remain in the central California coastal town of Santa Cruz after graduating.  But the town and university affected the company as well.  SCO was at the center of the Santa Cruz tech scene, with many employees moving from it to other tech companies or vice versa.<ref name="sarai-rem">{{cite news | url=https://www.santacruztechbeat.com/2015/04/23/tech-in-santa-cruz-sara-isenberg/ | title=Don't let anyone tell you tech is new in Santa Cruz! | author-first=Sara | author-last=Isenberg | newspaper=Santa Cruz Tech Beat | date=April 23, 2015}}</ref><ref name="patch-heyday-2012">{{cite news | title=Software Company Alumni Remember the Hot Tub Parties of Their Heyday | url=https://patch.com/california/santacruz/booming-software-company-remembers-the-hot-tub-partie7cb9b0db6e | author-first=Maria | author-last=Grusauskas | publisher=Patch Santa Cruz | date=September 20, 2012}}</ref>  Some of the feel of the SCO offices was carried forward in [[coworking]] facilities later set up in Santa Cruz by two former SCO employees.<ref>{{cite web | url=https://santacruzlife.com/cruzio-coworking-space/ | title=An Insider's Look at Coworking in Santa Cruz | author-first=Maria | author-last=Grusauskas | work=Santa Cruz Life | date=September 23, 2013 | access-date=May 13, 2021}}</ref>

New products were promoted with mock [[film poster]]s.<ref name="coursey-bad"/>  The Vice President of Marketing and Communications was, through much of the 1980s and early 1990s, Bruce Steinberg, who was an artist and musician in the San Francisco area music scene,<ref>{{cite web | url=https://www.legacy.com/obituaries/santacruzsentinel/obituary.aspx?n=bruce-marshall-steinberg&pid=100979008 | title=Bruce Marshall Steinberg | publisher=Legacy.com | date= January 10, 2008 | access-date=May 8, 2021}} <!-- see also Evan Hunt's http://ethanol.blogspot.com/2007/12/bruce-i-dont-know-how-to-write-this.html --></ref> whose credits included having designed the "flying toasters" cover of the [[Jefferson Airplane]]'s 1973 live album ''[[Thirty Seconds Over Winterland]]''.<ref name="coursey-bad"/>

[[Image:SCO offices Santa Cruz from rear view on Pogonip 1999.jpg|thumb|left|upright=1.2|End-of-day meetings were held on these rooftops, here seen in 1999 from the hills behind them (center-right is 425 Encinal; on the left, mostly obscured, is 400 Encinal).]]

The Santa Cruz Operation name itself brought comments; one Canadian industry writer called it "One of the coolest company names I ever came across since entering this business".<ref>{{cite news | url= https://www.itbusiness.ca/news/ibm-does-the-tarantella/107 | title=IBM does the Tarantella | author-first=James | author-last=Buchok | publisher=ITBusiness.ca | date=March 19, 2003}}</ref>

From its earliest days through to its last ones, The Santa Cruz Operation was known for reflecting the casual ambience of its namesake town.<ref name="scs-parting"/>  Dress was casual to the point where some staffers went barefoot.<ref name="scs-1983"/>   There was beer in the office, end-of-day meetings held on Encinal Street roofs, and an outdoor hot tub at the Mission Street office (dating from the facility's previous existence as a holistic health clinic) that was used during the day or for late-night, after-work parties.<ref name="scs-spirit"/><ref name="patch-heyday-2012"/>  One former employee said years later of her experience there, "It was a family. We played hard, but we also worked hard. I don't think I've worked anywhere since that's had that kind of feel."<ref name="scs-spirit"/>  The SCO reputation was exemplified by an oft-related story of a time where the company had to put out a rule that "clothing must be worn during office hours," caused by an instance where someone walking in from the hot tub had not done so and a potential corporate partner had been paying a visit.<ref name="stross-p5"/><ref name="patch-heyday-2012"/>

Over 500 former Santa Cruz Operation employees held a reunion at the [[Cocoanut Grove (Santa Cruz)|Cocoanut Grove]] venue in Santa Cruz in 2012.<ref name="scs-spirit">{{cite news | url=https://www.santacruzsentinel.com/2012/09/22/sco-spirit-still-going-strong-decade-after-tech-company-closed-doors/ | title=SCO spirit still going strong decade after tech company closed doors | author-first=Shanna | author-last=McCord | newspaper=Santa Cruz Sentinel | date=September 22, 2012}} Updated September 11, 2018.</ref>

=== SCO Forum ===
{{main|SCO Forum}}
Beginning in 1987, SCO hosted an annual Summer conference for the international Unix community. Called [[SCO Forum]], it was held on the [[University of California, Santa Cruz]]'s scenic [[redwood]]-forested campus overlooking [[Monterey Bay]], drew some 2000–3000 attendees, and lasted for much of a week.<ref name="scs-1991">{{cite news | url=https://www.newspapers.com/image/66415565/?terms=%22tower%2Bof%2Bpower%22%2B%22sco%2Bforum%22 | title=Corporate cultures splash at SCO industry forum | author-first=Guy | author-last=Lasnier | newspaper=Santa Cruz Sentinel | date=August 21, 1991 | page=B5 | via=Newspapers.com}}</ref><ref name="scs-1992-b"/><ref name="scs-1995-b">{{cite news | url=https://www.newspapers.com/image/92420680 | title=SCO Forum gets bigger each year | author-first=Steve | author-last=Perez | newspaper=Santa Cruz Sentinel | date=August 24, 1995 | page=C3 | via=Newspapers.com}}</ref>

Featured speakers over the years included [[Douglas Adams]],<ref>{{cite web|url=http://www.quotegeek.com/index.php?action=viewcategory&categoryid=18 |title=QuoteGeek Your favorite quotations, online |date=July 23, 1999 |access-date=May 20, 2008 |publisher=Katharine Hammer |url-status=dead |archive-url=https://web.archive.org/web/20081210063412/http://www.quotegeek.com/index.php?action=viewcategory&categoryid=18 |archive-date=December 10, 2008 }} Speaking at the 1997 SCO Forum, Douglas Adams said "''The difference between us and a computer is that, the computer is blindingly stupid, but it is capable of being stupid many, many million times a second.''"</ref> [[Scott Adams]], [[Dave Barry]],<ref>{{cite web
|url=http://www.visionware.co.uk/forum98/conference/grid.html
|title=SCO Forum98 Conference Schedule
|access-date= May 20, 2008
|publisher=SCO
|archive-url= https://web.archive.org/web/19981205115016/http://www.visionware.co.uk/forum98/conference/grid.html
|archive-date= December 5, 1998}}</ref> [[Clifford Stoll]], [[John Perry Barlow]], [[Linus Torvalds]], [[Andy Grove]] (Intel), Michael Swavely (Compaq), Steve Ballmer (Microsoft), and [[Scott McNealy]] (Sun Microsystems).<ref>{{cite web
|last=Frazier
|first=Belinda
|url=http://www.linuxjournal.com/article/2608
|title=Linux at SCO Forum
|date=November 1, 1995
|access-date= May 20, 2008
|publisher=Linux Journal
}}</ref> Musical entertainment included concerts by [[Jefferson Starship]], [[Tower of Power]], [[Roger McGuinn]], [[Jan & Dean]], [[The Kingsmen]], [[The Surfaris]], and [[Deth Specula]].<ref>{{cite web
|url=http://www.visionware.co.uk/forum98/events.html
|title=SCO Forum's Legendary Social Events
|access-date= May 20, 2008
|publisher=VisionWare
|archive-url= https://web.archive.org/web/19981206040346/http://www.visionware.co.uk/forum98/events.html
|archive-date= December 6, 1998
}}</ref>

Due to its useful content and its relaxed, fun atmosphere, SCO Forum became known as one of the best such conferences to go to in the industry and was viewed fondly by those who attended.<ref>{{cite news | author-last=Birnstock | author-first=Andrew | title=It's showtime! | magazine=UNIX Review | date=April 1994 | page=7 | via=Gale Academic OneFile <!-- (accessed September 19, 2020) --> | url=https://link.gale.com/apps/doc/A15066415/AONE?u=wikipedia&sid=AONE&xid=a6ddb889 }}</ref><ref name="zd-leibo">{{cite news | url=https://www.zdnet.com/article/sco-forum-this-aint-no-trade-show/ | title=SCO Forum: This ain't no trade show | first=Evan | last=Leibovitch | magazine=ZDNet | date=August 30, 2000}}</ref><ref name="coursey-bad"/>  It was the largest tech event in the Santa Cruz area and made a multi-million dollar impact on the local economy.<ref>{{cite news | url=https://www.newspapers.com/image/90202360/?terms=%22sco%2Bforum%22 | title=Techies turn out for SCO forum | author-first=Jennifer | author-last=Pittman | newspaper=Santa Cruz Sentinel | date=August 17, 1997 | page=D1 | via=Newspapers.com}}</ref>

=== Palookaville webcasts ===
Following the first live Internet concert in 1994, SCO continued in that tradition by sponsoring and producing a series of live Internet webcasts from the popular Santa Cruz night club Palookaville. These webcasts demonstrated the use of UnixWare 7 as a real-time audio and video webcasting server utilizing [[RealAudio]] and [[RealVideo]] technologies from [[RealNetworks]].<ref>{{cite web
|url=http://ftp2.sco.com/pub/skunkware/audio/webcast94.html
|title=Did you know that SCO broadcast the first live music on the Internet ?
|access-date= March 30, 2008
|author=Ronald Joe Record
|date= August 23, 1994
|publisher=SCO
}}</ref>

=== Trapping a hacker ===
SCO was a target of one of the most publicized [[security hacker]]s of the 1980s and 1990s, [[Kevin Mitnick]], who broke into the company's systems in 1987.<ref name="nyt-hacker-1994">{{cite news | url=https://www.nytimes.com/1994/07/04/us/cyberspace-s-most-wanted-hacker-eludes-fbi-pursuit.html | title=Cyberspace's Most Wanted: Hacker Eludes F.B.I. Pursuit | author-first=John | author-last=Markoff | newspaper=The New York Times | date=July 4, 1994 | pages=1, 36}}</ref>  SCO's staff detected his intrusions and engaged in exchanges with him that allowed them to track his activities.<ref name="lat-hacker-11989">{{cite news | url=https://www.latimes.com/archives/la-xpm-1989-01-08-mn-285-story.html | title=Computer an 'Umbilical Cord to His Soul': 'Dark Side' Hacker Seen as 'Electronic Terrorist' | author-first=John | author-last=Johnson | newspaper=Los Angeles Times | date=January 8, 1989}}</ref>  After about a week of this, it appeared that the intruder was trying to modify or copy Xenix code.<ref name="cyberpunk">{{cite book | title=Cyberpunk: Outlaws and Hackers on the Computer Frontier | author-first=Katie | author-last=Hafner | author2-first=John | author2-last=Markoff | publisher=Simon & Schuster | location=New York | year=1991 | pages=86–91}}</ref>  Authorities having been notified, the phone line Mitnick was using for the intrusions was discovered and he was arrested.<ref name="cyberpunk"/>  He reached a deal to plead to a misdemeanor for which he did no jail time,<ref name="nyt-hacker-1994"/> but it was his first conviction as an adult.<ref name="cyberpunk"/>  SCO officials agreed not to sue him if he would explain his hacking techniques to them.<ref name="lat-hacker-11989"/>  But when a SCO staffer traveled to meet him, he was uncommunicative.<ref name="lat-hacker-11989"/><ref name="cyberpunk"/>  In any case, Mitnick soon continued his intruder activities against other companies' systems.<ref name="nyt-hacker-1994"/>

=== SCO Follies ===
From 1985 to 2001, the company hosted a [[Winter Solstice]] party at the [[Cocoanut Grove (Santa Cruz)|Cocoanut Grove]] in Santa Cruz featuring a live musical show known as "The SCO Follies". This was a fully scripted and produced satire skewering SCO management and the high-tech industry. It featured live action, musical numbers, and videos.<ref>{{cite web |url=https://www.youtube.com/profile_play_list?user=motibloc |title=motibloc's Playlists |access-date=May 14, 2008 |author-first=Stephen |author-last=Marino |publisher=YouTube}}</ref> On September 22, 2012, the SCO Alumni Association hosted the SCOGala Reunion party at the Cocoanut Grove, which included the first SCO Follies since 2001. Some 500 former employees, friends, and family attended the event.

{| class="wikitable"
|-
! Year !! Title !! Description
|-
| 1985 || ''Star Trek'' || Scripts in hand, early SCO employees go where no company has gone before.
|-
| 1986 || unknown || -
|-
| 1987 || unknown || -
|-
| 1988 || ''Cheers'' || Sometimes you want to go where no-one knows your login name.
|-
|- valign="top"
| 1989 || ''Larry Wants an Ad'' || Exasperated with Bruce Steinberg's hairbrained ideas, Larry Michels asks employees to submit concepts for a new ad campaign.
|-
|- valign="top"
| 1990 || ''Late Night with Doug Michels'' || SCO licenses the "Late Night" format from GE with Doug as host. Guests include the XENIX Colonel, Michael J. Foxplus (promoting "Backup to the Future II"), SCO's own Princess of Purple, and (direct from the mail room) "Elvis".
|-
|- valign="top"
| 1991 || ''KODT'' || SCO launches a cable television channel that requires a telethon to raise funds for the equally cash-strapped organization (operating under the banner of "almost" public television). 
|-
|- valign="top"
| 1992 || ''Archaeological Dig'' || The year is 2100 and the world has only recently recovered from a catastrophic era known as "The Corporate Wars". Drs. Dave Loman and Jane Greenleaf are recovering artifacts from the original SCO site in New Santa Cruz. The archaeologists are working under the supervision of an overbearing AI known as the NED 9.0.1 Project Management System, and Michelle Michels, descendant of the founders of SCO. With a little hacking, a kinder, wackier NED makes for a much less stressful work environment.
|-
|- valign="top"
| 1993 || ''How to Succeed in the Software Business'' || Job applicant Grace Hopper joins the company via social engineering. With the help of a book on the software business, Grace hopscotches across the SCO org chart with stints in Manufacturing, Support, Engineering, Sales, and Marketing. Meanwhile, VP and co-founder Doug Michels is rescued from a car crash and imprisoned by a deranged ex-SCO employee named Annie Wilkes. Grace is ultimately made CEO, but turns it down for a better job. This show includes the infamous "Die Hard" video by late Follies action director Peter (Israel) Rosencrantz. In the current climate, it's hard to picture a CEO giving permission for employees to parade through the building carrying automatic weapons, let alone appearing in the video himself. But Swedish-born Lars Turndal sat for an hour with guns trained on him by some wacky Americans as if he'd been doing it all his life.
|-
|- valign="top"
| 1994 || ''The Phantom of the Operation'' || Software engineer Eric T. Claudin runs afoul of evil VP Edwin Vincent Leach, who is bent on SCO's destruction. Disfigured in a hot tub "accident" arranged by Leach, Eric becomes the Phantom, a dark figure obsessed with saving the firm. Once again, then-CEO Lars Turndal proved he was a real sport and consented to appear in his second (and last) video, one that roasted the executive team for trying to censor the Usenet feed. Brian Moffet produced the stained-glass style panorama that opens the show. 
|-
|- valign="top"
| 1995 || ''FCS Can Wait'' || For the uninitiated, FCS is "First Customer Ship," the magic goal of the product development cycle. Based on the films "Here Comes Mr. Jordan" and Heaven Can Wait," Engineering manager Jo Pendleton is hurled into the great void ahead of schedule. Bodies must be swapped and Heaven & Earth must be moved so that Jo can complete her project of a lifetime, "SCO DoomBugger".
|-
|- valign="top"
| 1996 || ''UNIX Won't Die'' || After a series of high-profile incidents involving glitches in the UNIX operating system (namely Apollo 13, Three Mile Island, and the Exxon Valdez), James Bond tracks the SPECTRE of his nemesis Ernst Stavro Blofeld into the hallways of SCO. Along for the ride is the mysterious Tilly Masterson (sister of the woman who was suffocated in paint by the nefarious Goldfinger). Software engineer Fox Mulder and Dana Sculley ("a schmuck from Legal") have stumbled onto the UNIX plot and are suspicious of Bond's presence.  This show was the first to include digital compositing (a couple of laser beams and explosions). These early steps were taken on a Miro DC20 video card and Adobe Premiere purchased with pooled funds. Bill Welch created these effects and Mike Almond provided the opening Star Wars animation using Caligari TrueSpace. Thereafter, nearly all the effects for Follies were created digitally.
|-
|- valign="top"
| 1997 || ''Taming of the CEO'' || A Shakespearean romp where Viola Murch, a top female director who despairs of ever becoming a VP, decides to disguise herself as a man. She learns that the top floor is a far stranger place than she imagined. This show included a mock preview for a show called "Sliders" about parallel SCO universes. This marked the full use of digital effects and compositing. Mike Almond was responsible for creating such 3D items as a phalanx of Imperial Stormtroopers and a streaking Millennium Falcon.
|-
|- valign="top"
| 1998 || ''A Solstice Carol'' || The story of Ezekiel Kludge, a crusty longtime SCO manager who re-discovers the true meaning of SCO.
|-
|- valign="top"
| 1999 || ''The Wizard of OCS'' || IBM engineering manager Dorothy Gale is transported into the wacky world of OCS, where she meets a Marketeer who wants to lose his brain, A Salesman who wants to get rid of his heart, and an Engineer who wants to get rid of his life.
|-
|- valign="top"
| 2000 || ''Willy Wonka and the Software Factory'' || 
Support specialist Charlotte Bucket dreams of visiting SCO's Software Factory and Willy Wonka, the "Chief Geek" who no-one has seen for years. It's an adventure populated with Corpa Lorpas, Waffling Precompensators, Paleoatavistic Patch Pellucidators, and Everlasting Spamstoppers. Not to mention Fizzy Linux stocks. And some arrogant, selfish, and greedy adult children get their comeuppance as well.
|-
|- valign="top"
| 2001 || ''Fiddler on the 425 Roof'' || The "final" SCO Follies occurred shortly after Caldera Systems purchased the Santa Cruz Operation. Thus the show's theme is change, with Caldera Systems as the Cossacks. The show opens with the "Dawn of Spam" sequence adapted from Stanley Kubrick's classic odyssey. The mood of the "Linux Company" finale was subsequently overturned when the radically downsized, later-named "SCO Group" turned against Linux. 
|-
|- valign="top"
| 2012 || ''Raiders of the Lost Archive'' || When two members of a secret SCO organization are murdered, the SCOllegium assigns a team of ex-SCOites to find out who is responsible.
|}

== Alliances ==
[[Image:SCO Partner Conference 2000 at Stratford-upon-Avon Moat House.jpg|thumb|right|The SCO Partner Conference was a yearly conference held for Santa Cruz Operation partners in the United Kingdom and sometimes elsewhere. The 2000 edition took place at a hotel in Stratford-upon-Avon with the SCO flag flying in front of it.]]

SCO was a primary partner in several industry alliances, intended to promote SCO operating system technology as a de facto standard for emerging hardware platforms.  The most notable of these were:

* [[Advanced Computing Environment|The ACE Consortium]]: Founded by [[Compaq]], [[Microsoft]], [[MIPS Computer Systems]], [[Silicon Graphics]], [[Digital Equipment Corporation]], and SCO in 1991, to drive the next generation of PCs powered by the [[Advanced RISC Computing]] Specification (ARC)
* [[3DA]]:  Formed by SCO and [[Hewlett-Packard]] in 1995, to define the standard Unix for [[IA-32]] and later [[IA-64]] systems
* [[Uniform Driver Interface]]:  Led by SCO and with work starting in 1997, the UDI project sought to establish an OS-neutral and platform-neutral portable interface for writing [[device driver]]s.  The UDI project had the backing of Intel, HP, IBM, Compaq, Sun, and others. 
* [[Project Monterey]]:  Formed by SCO, IBM, [[Sequent Computer Systems|Sequent]] and Intel in 1998, to define the standard UNIX for IA-64 systems.  Also intended to merge some of the proprietary Unix products afloat at the time.<ref name="esr-art"/>

None of these alliances were ultimately successful.

SCO was also part of 1993's [[Common Open Software Environment|COSE]] initiative, a more successful and broadly supported initiative to create an open and unified UNIX standard.

SCO was a founding member of [[86open]] (1997–1999), hosting the first meeting of the Unix on Intel standards effort.

== See also ==
* [[Halloween documents]]
* [[History of Unix]]
* [[Timeline of operating systems]]
* [[Xinuos]] for the current owners of the SCO-related Unix products

== References ==
{{reflist|colwidth=30em}}

== External links ==
* The Santa Cruz Operation, Inc. (archived web site {{mono|sco.com}} from [https://web.archive.org/web/19970215195700/http://www.sco.com/ 1997-02-15] to [https://web.archive.org/web/20010405010048/http://www2.sco.com/ 2001-04-05])
* [http://www.ocston.com/ www.ocston.com Alumni directory for the former Santa Cruz Operation]
* [https://www.youtube.com/user/motibloc YouTube.com: Motibloc's video account, with collection of SCO Follies videos]
* [https://www.landley.net/history/mirror/unix/scohistory.html The Santa Cruz Operation's timeline of its own history, 1999]
* [https://web.archive.org/web/20031204183836/http://www.sco.com/company/history.html The SCO Group's timeline of its own history, 2003]
* [http://laurel.datsi.fi.upm.es/~ssoo/IG/download/timeline.html Jorn Barger's Timeline of GNU/Linux and Unix, 2002]
* [https://www.encyclopedia.com/books/politics-and-business-magazines/santa-cruz-operation-inc David P. Bianco, "The Santa Cruz Operation, Inc.", ''International Directory of Company Histories'', 2000], as hosted at [[Encyclopedia.com]]
* [https://www.operating-system.org/betriebssystem/_english/fa-sco.htm SCO Company History at the Operating System Documentation Project, 2006]
* [https://williambader.com/museum/dell/xenixhistory.html William Bader's SCO History site, 2009]

{{Authority control}}

[[Category:1979 establishments in California]]
[[Category:2001 disestablishments in California]]
[[Category:2001 mergers and acquisitions]]
[[Category:Caldera (company)]]
[[Category:Companies based in Santa Cruz County, California]]
[[Category:Defunct companies based in California]]
[[Category:Defunct software companies of the United States]]
[[Category:Software companies based in California]]
[[Category:Software companies established in 1979]]
[[Category:Software companies disestablished in 2001]]
[[Category:Unix history]]