Alok Mohan, SCO president and CEO

Alok Mohan, SCO president and CEO

In the last year The Santa Cruz Operation announced its collaboration with Hewlett-Packard to converge three variants of Unix into one by 1998 and its Unix-based Network Client/Operating System (NC/OS). SCO hopes that those moves - along with other Internet-driven industry efforts such as Java - will help loosen Microsoft's grip on the client/server market, as SCO's president and CEO, Alok Mohan, explained in an interview in Paris with IDG's Joanne TaaffeIDG: Perhaps you can begin with the changes in your company over the last year?

MOHAN: There have been a lot of changes in the company compared to a year ago, but while we've been changing, the industry has been changing and therein lies the next huge wave of opportunity. I'm referring to the Internet.

When Microsoft evolved their client, Windows, it kept getting thicker and thicker - thicker in terms of more lines of code, more cost to Microsoft - now to the point where you need Pentiums, 32Mb of memory, a large disk, just to have anything interesting running on the client. Plus, when you have thousands of clients in your organisation . . . client administration has become a horrendous battle. The Internet is a whole different market - it's server-centred, more data, intelligence is running on the server, and the client then can afford to be as thin as it wants.

Fortunately for the industry, Java came along. We're very supportive of Java, we licensed Java. So we can push the opportunity for customers to drive the applications model, which is not thick-client only. It opens an opportunity. The best server for this heterogeneous client is Unix. NT is great when working with a Microsoft model of client/server, but when the model shifts or coexists with the Microsoft definition of client/server, the opportunity's best for Unix servers to play that area with low total cost of ownership. Unix has the scalability, the reli-ability, the robustness, so all the attributes Unix has been great at are suddenly centre stage in what you need to be a very good Internet server. Windows clients won't go away, they'll ship in their millions, but you'll also have non-Windows clients.

IDG: But you still see NT as a threat?

MOHAN: Yes . . . the change we are talking about now gives us a much better chance to win. Before, we were winning on just being better, more reliable, more performance . . . now there is another weapon for mixed environments. Microsoft is one answer, but not a good one, as it is very Microsoft.

You need choices on a client, on a server . . . When you look at the server market, Unix has about 22 per cent market share and Microsoft has 15 per cent. Even if you combine the two, there are a lot of other servers out there . . . and they are really losing market share. NT is growing, as is Unix . . . but NT is growing much faster.

The pie chart of market share is changing. NT wins when it comes to a server for print and file purposes, when you have a bunch of PCs running and . . . you want to go out for data or print certain things.

The model where we have won . . . is when someone is doing order-entry systems and there are 40 people pounding away at the keyboard into a server.

IDG: How does your Network Client/ Operating System (NC/OS) fit into all of this?

MOHAN: It was imperative for SCO that there be more than Windows everywhere. Because the moment there is more than Windows everywhere, NT is not the best server. If you have a mixed client environment, NT is a very limited OS. That's why we started the notion that we have to have some of the clients out there. Our objective is to make sure there is another client.

IDG: Who is providing the hardware?

MOHAN: We went to 24 OEMs.

IDG: And the response?

MOHAN: They all know they have to do it [produce a "network client" operating system], which is a big change. You come from a world which is Windows everywhere, and suddenly here they are, every OEM is convinced they have to do it and that they're behind. I think the people who have the longest development projects, the biggest ideas, a new chip, OS - they're the furthest behind. The world is not that simple.

IDG: Do you mean Oracle?

MOHAN: Yes, people like that.

IDG: So which OEMs will work on your NC/OS?

MOHAN: There are a lot of people interested in it, but I don't know if that interest translates into anything. It's too early yet.

IDG: How does your product compare to those of your competitors, such as Oracle?

MOHAN: Some of the industry is trying to solve too many of the problems at the same time. You're trying to solve the Microsoft monopoly, but some people are trying to solve the Intel monopoly on the microprocessor. I believe that Intel's road map is so strong, that it isn't the one that is breakable, not in this wave. I understand the motivation for why they are doing it, but Intel's price/performance is such that it is very hard to compete with them.

IDG: What is your relationship like with Sun Microsystems? At the SCO forum recently [Sun CEO Scott] McNealy said he would work with you on interfaces.

MOHAN: Yes, people seem surprised about this, but it really isn't surprising to me. We are a Unix OS provider. Sun is actually a systems provider - they compete with our customers: NCR and IBM and HP. We are the underlying technology provider to many of these people. So we don't compete much with Sun. We do compete against their software division . . . and we mostly win. I looked at Java, and I thought we have a lot of room for cooperation, because with Java, going back to the theory that we need more than one client puts too much pressure on the NT debate.

IDG: Are you teaming up to take on Microsoft?

MOHAN: Not directly, but eventually you do line up, and we are the two people who are pure Unix players, and both of us are supporting the new model of client/server. There is a battle coming - the Internet way vs. Microsoft's client/server way. They will coexist, but the Internet way will grow, and it will cause sufficient issue with IT organisations that they will have to deploy servers that can handle both.

IDG: Will Microsoft not react?

MOHAN: Everybody can do Internet, including Microsoft. The issue is, are you going to take your thick client and go to the new paradigm of thin clients? If you do that, it's a complete change. Their strategy is client- oriented.

If you get all [your] money from making a thick client, are you going to say thin clients are the right answer and take a third of the price? That's a very tough model, and IBM couldn't do it in the '80s with the mainframe to go to the next paradigm of total cost.

IDG: But Microsoft moved deftly when faced with Netscape.

MOHAN: What happens when the model shifts on you, what happens to average transaction size, average seat cost, what happens to the number of units you shift?

Very soon IT are going to slow down the deployment of thick clients, if nothing else to study thin clients, [Microsoft] won't stop. Windows clients will ship, but the model is broken. Microsoft can help take money out of the client, or they can fight it. The cost of changing is incredible.

[For us] it isn't a question of "I will do Internet too". We are very focused. What we are after is to be the best server for mixed clients. We're not saying that Windows will go away, not at all - the majority of clients will still do Windows.

IDG: How do you see your share of the market developing?

MOHAN: I think our share will continue to rise. People who are losing share are the proprietary and the old systems. Unix is still only a small share of the application server market. NT will continue.

IDG: And how does this fit in with your move to the higher end of the Unix market?

MOHAN: A company cannot have a set of technologies and only take it to limited markets, because then you don't have enough units or enough margin to defray R&D costs.

And when you think about what an Internet server actually needs, very server-centric, it needs scalability, it needs large databases, large memory, high performance, reliability, high security.

Those are the attributes a server needs, so to be the best server for the Internet we've got to have these attributes.

These functionalities will play, maybe with some lag time, but they will play as well with all our products.

IDG: So how will the Unix market look?

MOHAN: Some of these proprietary implementations will disappear.

They will not be able to sustain chip development.

IDG: Who, for example?

MOHAN: The way to look at it is to look at the volume, [look at] the guys with the lowest volume and start picking them off. They're the ones that'll be gone first.

There's no way these guys can afford to sit around losing tens of millions of dollars messing around, doing low-volume chip designs. That is so arcane.

A couple . . . have more volume than others - PowerPC and Sparc - and even those you've got to wonder, do they have the volume to drive that solution to get the cost right.

IDG: So will the Unix market look less fragmented?

MOHAN: First, most of the Unix on Intel, I'm thinking of . . . the Unisys, people who do implementation of Unix on Intel, will standardise on SCO Unix, at varying speeds, but over the next couple of years it's going to happen. That brings the first stage of Unix consolidation.

Then comes Merced, and then to all practical purposes to an ISV we present one development system, focused around HP as well as SCO, another level of consolidation. We will still have Sun and IBM as . . . variants. I think we will still see those companies because they are really solution providers. I think the rest, by the year 2000, will go.

IDG: So what is the overall picture, are you concentrating less on your traditional base?

MOHAN: Not less, we're expanding our thrust. That traditional market is ready to move on to the network client at some point. I think the first place will be in corporate America because they are the people who have deployed tens of thousands of thick clients and are struggling.

IDG: But what about the expense of moving over?

MOHAN: Whatever we do on the [thin] client software will also run on Microsoft Windows . . . so you have an opportunity to bring in cheaper ones in terms of systems management, administration.

IDG: So how will the NC/OS look to the user?

MOHAN: It will look like a PC . . . it'll be all graphical, it'll be Web-enabled, it'll look like a Netscape browser. The user won't have to go through the shock of "I used to love my Windows and now I don't have my Windows".

IDG: And applications?

MOHAN: They'll have all the applications they need, all the applications are coming. [Corel's] Wordperfect is going to come out, and they'll give you a thin client and stuff happening on the server.

No-one will be able to tell the difference [about where the application resides]. In fact it will look pretty slick, it'll be next generation and much faster.

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