SCO Suspends Distribution of Linux Pending Intellectual Property Clarification; Announces Greater Focus on UNIX and SCOx Strategy



SCO Suspends Sales of Linux, Alerts Customers That Linux Is an Unauthorized

Derivative of UNIX and That Legal Liability May Extend to Commercial Users



SCO Reaffirms Commitment to SCOx, SCO's Growth Strategy Through Web Services



    LINDON, Utah, May 14 /PRNewswire-FirstCall/ --
 The SCO(R) Group (SCO)(Nasdaq:   SCOX), the owner of the UNIX operating system,
 today warned that Linux is an unauthorized derivative of UNIX and that legal
 liability for the use of Linux may extend to commercial users.  SCO issued
 this alert based on its findings of illegal inclusions of SCO UNIX
 intellectual property in Linux.  The company also indicated that until the
 attendant risks with Linux are better understood and properly resolved, the
 company will suspend all of its future sales of the Linux operating system.
     (Photo:  http://www.newscom.com/cgi-bin/prnh/19990421/SCOLOGO )
     "SCO is taking this important step because there are intellectual property
 issues with Linux," said Chris Sontag, senior vice president and general
 manager of SCOsource, The SCO Group.  "When SCO's own UNIX software code is
 being illegally copied into Linux, we believe we have an obligation to educate
 commercial users of the potential liability that could rest with them for
 using such software to run their business.  We feel so strongly about this
 issue that we are suspending sales and distribution of SCO Linux until these
 issues are resolved."
     SCO will continue to support existing SCO Linux and Caldera OpenLinux
 customers and hold them harmless from any SCO intellectual property issues
 regarding SCO Linux and Caldera OpenLinux products.
     Going forward, SCO will have a stronger focus on UNIX and the company's
 growth strategy around Web services, SCOx.  The company introduced SCOx in
 April as the company's Web services framework and plans to introduce new Web
 services applications from third party developers in August at SCO Forum, the
 company's annual conference.
     "SCO remains committed to servicing our customers and as such, we intend
 to continue our growth strategy around SCOx -- the Web services framework for
 small-to-medium businesses and branch offices," said Darl McBride, president
 and CEO, The SCO Group.
     In a separate announcement released today, SCO gave guidance on expected
 results for its 2nd fiscal quarter.  The company expects to report net income
 of $4.0 million on revenue of $21 million.
     In addition, SCO today also posted an analyst report from Gartner to their
 Web site at www.sco.com/scosource entitled, "SCO Lawsuit Sends a Warning to
 Linux IS Shops."  The executive summary of the report asks whether Linux is
 safe from encumbrances.
 
     About The SCO Group
     The SCO Group (Nasdaq:   SCOX) helps millions of customers in more than
 82 countries to grow their businesses everyday.  Headquartered in Lindon,
 Utah, SCO has a worldwide network of more than 11,000 resellers and
 8,000 developers.  SCO Global Services provides reliable localized support and
 services to all partners and customers.  For more information on SCO products
 and services visit http://www.sco.com .
 
     SCO and the associated SCO logo are trademarks or registered trademarks of
 Caldera International, Inc. in the U.S. and other countries.  UNIX, used under
 an exclusive license, is a registered trademark of The Open Group in the
 United States and other countries.  Linux is a registered trademark of Linus
 Torvalds.  All other brand or product names are or may be trademarks of their
 respective owners.
 
 

SOURCE The SCO Group

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