India represents huge opportunity: SCO chief

Lindon, Utah-based software technology provider SCO

Group owns the core UNIX operating system and is the exclusive licensor to

UNIX-based system software providers.






Darl McBride, president and CEO of the Nasdaq-listed SCO, spoke to AC Ganesh
about the company's vision for India, its performance in the last two quarters,

products and serviced offered, the emerging trends in enterprise and SMB OS

market. He also gives his perspective on BRIC countries and its future.

Could you elaborate on SCO's products and services

in India?







SCO has had a presence in India and the SE region for more than a decade now
headed by Sanjay Gupta (country manager — India and SE Asia). We have a strong

presence in vertical sectors such as banking, finance, government agencies,

utilities and transportation. SCO has a complete range of products and services

available in India through its distributors and partners.






The company also has an engineering center for development and professional
services in our New Delhi offices. Obviously the mobile market in India is huge

and we have started working with service providers and various companies to

begin offering mobile services in a number of regions. So during the past year,

we have really diversified our product offerings from operating systems with

UnixWare and OpenServer to adding mobile services too.






What are the emerging trends you see in the enterprise OS markets?







Probably the biggest trend in the enterprise OS market is around virtualization,
where the underlying OS becomes more and more transparent and multiple operating

systems are able to run on one system. We are already seeing this with some of

our customers. One of our major customers runs a product called Merge with SCO

OpenServer, which allows OpenServer to also run Windows applications on the same

system. We anticipate seeing this trend more and more in the years to come.






How do you see the BRIC (Brazil, Russia, India and China) countries emerging
as strong markets, their strengths and future?







I actually just gave a keynote on this very topic at a trade show in Russia. The
BRIC markets are compelling because they represent a collective population of

2.7 billion people with nearly $16 trillion in purchasing power, and IT spending

that will increase 13.9 per cent annually to more than $110 billion by 2009.

This kind of growth clearly outpaces the rest of the world and these countries

will experience rapid IT changes during the next five-seven years.






What are the verticals SCO addresses?







SCO has traditionally been a company that is strong where transaction processing
is important and reliability is of paramount importance. So we address markets

such as retail, banking, finance, hospitality, insurance, pharmacy, utilities,

transportation and government agencies.






What are the developments in the Enterprise market and as well as SMBs?







SMBs have incredible opportunities now because technology prices have come down
so low that they can adopt the same kind of software and hardware that only

their bigger competitors could afford a few years ago. So there really is this

leveling affect in terms of competition.






Is there any way to reduce UNIX server cost for SMBs?







Our company is very focused on the SMB market. This is where most of our
resellers that sell SCO UNIX sell into. So it's a market that we're very

familiar with. We have a number of products and solutions that are priced and

targeted specifically for the SMB customer, including SCO OpenServer 6 for Small

Business.






What are the challenges SCO faces and how do it plan to tackle them?







We have some very tough competitors in our product categories, with Microsoft
Windows on the one side and Linux on the other. Many customers view Linux as

offering a similar value proposition as UNIX in many respects because, well,

it's based on UNIX. Added to that is the problem of it being freely

downloadable. How do you compete against free? SCO has had to fight and innovate

every step of the way to show customers that what we offer them is better

supported, more reliable and of greater value over the long term.






Who is a bigger threat - Microsoft or Linux for UNIX?







They are both equally tough competitors for different reasons. Microsoft because
they have so much cash, a strong brand and they are really good marketers. And

Linux because it is so much like UNIX.






Could you elaborate on marketing strategy and SCO's engagement in the Indian
market with ISVs, channel partners, etc?







SCO has a strong presence in banking, finance, government, utilities and
transportation verticals. Within India, SCO has direct presence at four metros

and works with OEMs, Sis, ISVs/VSPs and solution providers to address customer's

requirements — we have grown in India year-over-year, signed on new customers,

have conducted a number of corporate events under the leadership of Sanjay

Gupta, and are looking forward to ramping up our business as we move forward

with the help of new technologies such as mobility.






With most of the companies engaged in educating the channel partners and
resellers, is SCO also looking at the same to reach out and address them?









SCO is a very channel-friendly company and has been recognized by VAR business
and other publications with awards for our channel programs. We believe in

transferring the knowledge to our channel partners to enable them to propose the

solution not the boxes. We have done various consumer specific events and other

activities to introduce new technologies to the market and train our channel

partners so they are ready when they receive customer leads.

What about the after sale service to the customers?









SCO has worldwide support services and infrastructure in place and we do provide
services through our trained partners. We have a team in India that can take

care of any special support needs. This team is backed up by our engineering

teams around the world. We have a worldwide support infrastructure in place and

provide support ranging from email/fax/telephone through to enterprise level

support, 24 hours a day, seven days a week.






Any specific plans for India?







We have been doing a very good job in India and the Southeast Asia region in
terms of revenue growth, new customers, new product launches, etc., and we will

continue to grow the business by bringing new technologies and products to

market, by working with our partners and by providing good support and service

to our customers.






How are SCO products influencing the Indian market?







SCO products are reliable, scalable, highly secure and work well especially in
various vertical markets and once installed they work for years without

interruption and without requiring much service or support. In a country as

large and as vast as India is, I think that it says a lot that some of the most

important institutions (banks, government agencies, utilities, etc.) depend on

our products.






What are the factors SCO took into consideration when choosing India?







We have been doing business in India for a number of years, well before I joined
the company. We were the early birds to set up the operations in India and I

think that it has helped our business there. The IT industry in India knows that

we aren't a start up company that is here today and gone tomorrow. We've been in

business for more than two decades and we plan to be in business for many

decades to come.






What is your vision for India?







India represents a huge opportunity because of a number of factors. The
projected revenue growth of the IT market in India is the highest in all of

Asia, and outpaces the rest of the world. The Indian government's plan for IT

investment and expansion into more rural areas is also significant. SCO has been

prominent in Indian banking for a number of years and that will continue as bank

modernization continues throughout the country.






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