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More red ink spatters SCO

But not a merger in sight...

As it warned last month, the Santa Cruz Operation continues bleed red ink.

For the third quarter of financial year 2000, SCO reported a net loss of $19m, compared with a $4m profit for the corresponding quarter last year. Revenues were less than half what they had been in Q31999.

SCO's CEO Doug Michels continued to blame Y2K for a downturn in enterprise spending. He told financial analysts that some major deals had closed in the quarter, but not enough to swing the results as a whole.

This is the first set of figures since SCO reorganised into three divisions: server software, Tarantella and professional services. UnixWare and OpenServer continue to provide over 90 per cent of SCO's revenue, although SCO says that the $2.5m generated by Tarantella was up 59 per cent from the previous quarter. Michels says he expects it grow by 40 per cent in the next quarter.

SCO has a fund of $31.3m cash and investments - half of what it was nine months ago- and Michels said part of its plan is to seek mergers to shore up its reserves. However not one analyst enquired about the unsustantiated rumours of an acquisition by SCO, although Michels said it was a priority to release a SCO Linux offering, as well as offering a host environment for Linux applications within UnixWare.

Ominously SCO's last SECC filing noted that the brunt of the £3.6m severence expenses had been borne by "product development for the Server Software Division", and Michels noted that SCO had joined the Linux IA-64 Project, formerly known as Trillian. All of which suggests that SCO will be leaning more on development partners such as Compaq, with whom it developed NSC (Non Stop Clusters) for UnixWare, and the open source community, for core server development.

There's no word yet on when the twice-delayed details of SCO's Linux announcement will finally emerge, although the company's annual forum now looks the likely opportunity. ®

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