IBM Unix investment set to rescue struggling SCO

SCO was handed a lifeline last week when IBM revealed it was integrating its Unixware 7 operating system with its own AIX, raising the possibility of an acquisition of the company by Big Blue.

The deal also gained the backing of Intel and Sequent, as the companies claimed the alliance will lead to an industry-standard Unix.

As part of the deal, IBM will take Unixware 7 as its 32-bit Unix product, including a substantial investment in channel and marketing programmes.

At the same time, SCO will take some of the key AIX technology to enhance Unixware 7's high-end capabilities and IBM will provide engineering resources to port its middleware technologies to the Unixware platform. It will also seek to encourage independent software vendors to develop and port applications to Unixware.

The companies will also work jointly on a single 64-bit version for Intel-based servers, using both Unixware and AIX technology, leading to a single Unix product line across IA-32, IA-64 and IBM processors.

SCO's ability to stay in the Unix market as it moves to 64-bit has been in question for some time, given the high levels of investment required - more than $100 million annually - and many of its earlier partners, including Compaq and Hewlett Packard, have gone in their own direction.

Barry Walker, UK regional director of SCO, said: 'The increased visibility of Unixware 7 and the expectation of better software availability far outweigh any imagined channel clash.'

He added: 'There is not much of a conflict with IBM's direct sales force as it will have no commercial advantage over our channel. We are absolutely determined to not create channel conflict.'

See analysis page 16.