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Unix/Linux vendor Caldera restructuring to cut costs

By Todd R. Weiss
September 18, 2001 12:00 PM ET

Computerworld - Unix and Linux software vendor Caldera International Inc. is laying off 51 workers and streamlining its operations as it fights to stay alive in a tough market.

In an announcement yesterday, Orem, Utah-based Caldera said it will consolidate some of its facilities in Orem and Santa Cruz, Calif., while whittling down its product lines and cutting other costs. The layoffs will affect 8% of the company's workers.

"We have evaluated all areas of our business that are necessary to meet customer needs and financial objectives," said Ransom Love, Caldera's president and CEO, in a statement. "We believe that this restructuring will help our company operate more efficiently in accordance with future revenue expectations and current worldwide economic conditions."

Last year, Caldera gambled and bought the UnixWare server and services divisions from the former Santa Cruz Operation (SCO) in California, in an attempt to expand its income and its offerings to customers (see story). The idea was to merge the scalability of Unix with the flexibility of the open-source Linux operating system.

Dan Kusnetzky, an operating systems analyst at IDC in Framingham, Mass., said Caldera's restructuring announcement "was sort of expected because there are obvious redundancies" in marketing and other areas since the SCO acquisitions.

When Caldera approached SCO, it really only wanted to buy the services division of the company, but was forced to buy the rest of SCO as well, including its UnixWare server operating system, he said. "They were saddled with a lot of things they really couldn't use," he said.

By making the SCO deal, Caldera officials apparently thought they would make a bigger name for themselves. But that could only have happened, Kusnetzky said, if they had a big name to begin with.

"SCO had never succeeded in making itself known outside its friends," and Caldera has a similar problem, Kusnetzky said. "It just made a larger unknown company."

Stacey Quandt, an analyst at Giga Information Group Inc. in Cambridge, Mass., agreed that the restructuring isn't a surprise.

"They're looking to survive in tougher economic times," especially in light of the added pressures being placed on Unix by developing Linux operating systems, she said. "The market is going to consolidate, and Caldera is attempting to survive in a much more difficult market."

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