| Darl McBride on Harleys and Bottled Water: SCO's new CEO Speaks |
by Malcolm Dean (August 28, 2002)
Las Vegas, NV -- New is in. We have 'the new HP', 'the new IBM', and now the new SCO Group. Which is the old Caldera, having survived the dot com scams and Linux lunacy.
Just a few days into his reign, Darl McBride spun Caldera around like a Vegas magician, presented a very old trick in a brand new/old show, Caldera/SCO's 16th annual Forum. His weapons? Harley bikes and bottled water.
Dressed in a leather jacket, black pants, and wraparound sunglasses, McBride showed how Harley came back from the edge of eternity by investing in its heritage. SCO, he promised, will do the same for its re-sellers and consultants, reviving one of the oldest and most successful UNIX brands. Never mind that the outside world has never heard of the millions of servers running SCO. Their time will come.
Taking on the 'Linux is free' myth, McBride offered to sell the audience a plastic cup of water. Then he held up a nicely labeled bottle of pure water, which easily sells for $12/gallon or more. This is how you'll make money, he said. You'll have the SCO brand once again, and our Linux will be powered by UnitedLinux, certified enterprise-ready by IBM and H-P.
DesktopLinux.com managed to interview McBride as the Forum was winding down . . .
McBride: Yesterday was the longest day of my life. I only got a few hours' sleep last night and the night before. But I was energized by the reception from our community. We knew from our focus group work that there would be a strong resonance in going back to the (SCO) brand. I had no idea it would be over the top exuberance.
DL: I could have predicted that, given the reaction from Borland's developers when their CTO, dressed in a gorilla suit, literally smashed the Inprise name on the stage to the theme from '2001: A Space Odyssey'. They just went wild when the lights came up on the name 'Borland'.
McBride: What it comes down to is the emotional value attached to a brand.
DL: But Inprise is like Volution. It doesn't mean anything. Caldera has had a similar history: every year a different strategy. Look at Red Hat. It's been one icon, one logo, one message. You see someone at a conference, and they're wearing what? A Red Hat. What do they sell? They sell Red Hat. What's Red Hat? Red Hat is... It's always this repetition. And after so many years, it shows.
McBride: They've done a great job.
DL: Do you remember how you first heard of Linux?
McBride: When I was at Novell, Ransom Love had a team working on it. So I eventually hooked them up with Ray Noorda (founder and former CEO of Novell, now Canopy Group). I was running our NetWare Embedded Technology Group. I heard about Linux and Mosaic at the same time. The thing that captured me more at the time was the browser, to be honest, because I'd never seen one before. What impressed me about Linux was Open Source.
DL: Did you understand Open Source at that time, or did the concept come later?
McBride: I did understand it because I was pretty close to Ray when we did the acquisition of USL (Unix Systems Lab) in 1993. It wasn't a new notion, but they way they were approaching it was unique.
DL: So you got a call to come over to Caldera?
McBride: Well, I've stayed in touch with these guys over the years. Shortly before Caldera's IPO, we had had a discussion. Ransom talked to me about coming on board. I ended up joining a startup in Austin, Texas. Fast forward two years, I had another round of funding lined up for another startup, and Ransom called.
At this point in time, I look at the options: (build a) startup from scratch in this environment . . . I had raised $50 million for each of those companies. Now in 2002, if you get any kind of cash, you're Superman. I'm comparing that to coming in with all this infrastructure with Caldera. So the way I viewed Caldera was, great infrastructure, incredible global reach, big re-seller channel, nice products, but they have these five or six problems.
Now, if I just looked at it as a startup, I would say, 'if we fix these problems and layer a new growth strategy on top, which gets you down the road further/faster? A or B?' And clearly it was B, Caldera.
DL: Who called you?
McBride: Ransom gave me a call. We talked, then I met the board, and they made the offer.
DL: Is the Board a supportive group?
McBride: Very supportive. I told them I would take 30 days, and I would analyze the situation. Right out of the chute, I would not do anything. Then I would put together a strategy and present it to them. Two weeks ago, I gave them five major items. They got behind us, and said, "Go do it."
DL: And when did the idea of changing the name back to SCO come up?
McBride: It came up early on. The very first week I was there, I talked to the top fifteen managers in the company, partly to sort out who was going to stay on my direct team, and who was not. And in that process, I gathered information about the issues. I asked them to tell me their issues. If you were in my shoes, what would you do to turn this around? And I took the threads that ran through those meetings, and one of the threads that kept on turning up was this identity crisis we have.
I had three books of press clippings over the past few months. Ninety-nine percent of the clippings related to Linux. Cool. Now, through the fifteen discussions, the identity crisis related to the fact that everyone talked about our core business. Ninety percent of our business comes from UNIX. And when you get out there, you have all these SCO re-sellers who don't attach to the corporate message.
It was clear we have an identity crisis we've got to fix. And there are multiple ways we can fix it. We could pound on the SCO re-sellers until they "get it." Obviously, that doesn't make sense, because they are generating good revenue. So you want to promote them, encourage them to go out selling, so that when Linux is ready for Prime Time, which it is really not right now, you are able to drop into that channel and get traction with the Linux products.
DL: So tomorrow you're going to have workshops on what's called defenestration, getting rid of Windows. So will we see Caldera tours in the future?
McBride: We've talked about a Caldera tour, and part of it relates to these products you're talking about, and part of our SCObiz line, which we rolled out yesterday. We think we have a really interesting way to get the SMB customer more connected, but still wrapped around a SCO OpenServer environment and applications. It doesn't matter if its OpenServer, UnixWare, Linux, even if it's Windows at the end of the day, these products will wrap around any OS.
DL: Sounds like you have cross-platform emphasis like Novell claims to have.
McBride: With our solutions business we expect to ride on top of a number of platforms. Volution Manager takes all the distributions of Linux and our UNIXes and provides full management of those environments. We have a commitment to bring Windows into the picture, as well.
DL: Do you have to be careful of your relationship with Novell, in that regard? Because your Volution Manager is up against ZENWorks.
McBride: They don't go to some of the places we do. There are some things we do which are stronger. Some of our team used to work on ZENWorks, but from a product standpoint, they're not exactly the same.
DL: When you leave SCO, what's it going to look like? What's your vision?
McBride: Part of the reason we went back to SCO is that I looked in BusinessWeek. They had an article on the top 100 brands, and my vision is that in a few years, we'll be one of those top 100 branded companies. One of our SCObiz re-sellers has sold 4,000 Web sites into 5,000 sell opportunities, so he has an 80% close rate. As we get our 16,000 VARs pushing this business out, we want that little SCO badge popping up.
So how did Intel become one of the top brands in the world? They got there through a lot of marketing and branding. So we have to move out of being a technology-only company. If we had an ounce of Microsoft's marketing muscle, that alone would propel us to be two or three times bigger than we are. Microsoft is the opposite. They have incredible marketing with very average, in most cases, technology. We have great technology and poor marketing.
DL: So we can look forward to a Back Office replacement in the future, and a return to the desktop?
McBride: We've talked a little about the desktop. We have internal folks coming to me and saying we can do the desktop piece real easy. It comes down to picking our battles carefully. We're going to focus on the Server right now. But we're not going to exclude ourselves from the desktop discussion as we go down the road.
DL: What can you tell us about Smallfoot? That's a really exciting project.
McBride: Smallfoot is one of the real gems that I found in my due diligence. This is the vision we had for embedded technology at Novell. The problem then was that it had to be shoehorned into IPX. It just didn't scale. It didn't work. When you're dealing with an IP transport, you're talking about a bigger story. That's where UNIX is a much better player. These stories start to resonate.
So we're taking a hard look at promoting the Smallfoot story in a big way. If you look at POS devices right now, you see a lot of DOS-based character terminals. They're just not very exciting in terms of what you can do with them.
DL: How far are we from learning who will lead UnitedLinux?
McBride: We're in discussion right now. The four CEOs copy each other on e-mail every day. I think we're looking at a few weeks from now.
DL: You said four CEOs, but TurboLinux is in trouble, according to the media, right?
McBride: Turbo is actually in good shape right now.
DL: How so?
McBride: They did a deal with SRA in Japan. SRA is very sound financially, and SRA is very committed to UnitedLinux. Turbo went from being in a shakey financial position to being in a good financial position.
DL: And who is the CEO now?
McBride: The way they're going to operate is that Turbo will be a part of SRA, and the key guy driving that will be a COO, Yano-san, who has been driving Turbo Japan. So most of Turbo is the Far East, anyway. The American part has been spun off into more of a software company.
DL: But the Turbo brand will remain?
McBride: Yes. That's correct.
DL: You must have an excited team in Germany.
McBride: Our UnitedLinux development team? They're really fired up. Our member partners, even our SCO re-sellers are becoming enthusiastic. They're saying, "When you're ready, let me know. We can make some money with that." I have a hard time selling something without a price tag. It's back to the bottled water analogy. It's not free water. It's bottled water. $14 a gallon. Buy now. Buy often.
DL: You're exhausted. You've been on your feet for a couple of days, talking to people, but underneath it all, are you excited?
McBride: Sure. I've done a number of initiatives. I've worked in Novell. I've created some very nice companies. The upside to this company has been that it's more exciting than anything I've done up to this point. SCO has the potential to be a significant player in the entire tech industry landscape. It's not just about nursing the SCO crowd for a few more years. It's not just about our Linux play. It's taking the brand of SCO, bringing in new acquisitions, pumping in new energy, renewing our core business, and then getting the whole team fired up around this commitment. And with the energy we felt around this conference, I can't tell you how many re-sellers are happy. In the last year, we've gone to the playing field with only about 20 people in the bleachers.
I think we have a fighting chance not to just turn around, but to go to the next echelon, the top tier of branded companies.
DL: You're in a unique position, because most of the Linux community doesn't understand Novell and their products. You worked there, and now you lead a Linux company that incorporates Novell's products. Given what you know, do you see a future for NetWare?
McBride: That's an interesting question. I've thought a lot about this whole idea of Directory Services tied into Linux, for example. They're just across town from us, so at some point, once we get the basics taken care of, I think I'll take a drive and sit down with Chris Stone, and talk turkey. There are clearly some opportunities.
DL: I think Novell and Linux are the great unrecognized marriage in today's OS space.
McBride: Right. I think you're on to something.
Copyright © 2002 by Malcolm Dean. Reproduced by DesktopLinux.com with permission.
About the author: Contributing Editor Malcolm Dean is a writer and IT strategist based in Los Angeles.
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