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From: Connect Public Relations <ConnectPR@connectpr.com>
To: "'Corbet@lwn.net'" <Corbet@lwn.net>
Subject: Caldera Acquires SCO
Date: Wed, 2 Aug 2000 05:22:38 -0600 


FOR IMMEDIATE RELEASE

CALDERA SYSTEMS TO ACQUIRE SCO SERVER SOFTWARE AND PROFESSIONAL SERVICES
DIVISIONS, PROVIDING WORLD'S LARGEST  LINUX /UNIX CHANNEL
Offers First Open Internet Platform, Embracing Open Access  to Linux and
UNIX Technologies 

OREM, UT--August 2, 2000--Caldera Systems, Inc., (Nasdaq: CALD), a "Linux
for Business" leader and The Santa Cruz Operation, Inc., (SCO) (Nasdaq:
SCOC), the world's leading provider of UNIX operating systems, today
announced that Caldera Systems has entered into an agreement to acquire the
SCO Server Software Division and the Professional Services Division. The
Professional Services Division will operate as a separate business unit of
Caldera, to provide services to meet the Internet and eBusiness
infrastructure needs of customers. 

The new company will offer the industry's first comprehensive Open Internet
Platform (OIP) combining Linux and UNIX server solutions and services
globally. The OIP provides commercial customers and developers with a single
platform that can scale from the thinnest of clients to the clustering needs
of the largest data center. 

 The Open Internet Platform combines the robust scalability of the UNIX
system with the low-cost, developer-accepted Linux operating system. The
products, solutions, and services developed for the Open Internet Platform
will be available through more than 15,000 partners worldwide. 
	
Details of the Agreement
Caldera Systems, Inc. will form a new holding company, Caldera, Inc., to
acquire assets from the SCO Server Software Division plus the SCO
Professional Services Division, including a highly skilled workforce,
products and channel resources. Caldera, Inc. will have exclusive
distribution rights for the SCO OpenServer product line, and is fully
committed to servicing and supporting the SCO OpenServer customer base.

 SCO will receive 28% of Caldera, Inc., which is estimated to be an
aggregate of approximately 17.54 million shares of Caldera stock (including
approximately 2 million shares reserved for employee options assumed by
Caldera for options currently held by SCO employees joining Caldera), and $7
million in cash. In conjunction with the acquisition, The Canopy Group,
Inc., a major stockholder of Caldera Systems, Inc., has agreed to loan $18
million to SCO. SCO will retain its Tarantella Division, and the SCO
OpenServer revenue stream and intellectual properties. Revenues for SCO
OpenServer were $11.1 million in Q3 of FY2000. Net proceeds to SCO after
expenses will be approximately 55% of future SCO OpenServer revenues. The
investment banking firms of Chase H&Q and Broadview respectively, assisted
SCO and Caldera Systems, Inc., in evaluting this acquisition.

Caldera, Inc. will be headquartered in Orem, Utah, with locations worldwide.
The boards of directors of both companies have unanimously approved the
acquisition which is subject to the approval of Caldera Systems, Inc. and
The Santa Cruz Operation, Inc. stockholders, and regulatory agencies, as
well as meeting certain other closing conditions. The companies anticipate
closing the transaction during October, 2000.

Following the completion of the acquisition, Ransom Love, current president
and CEO of Caldera Systems, Inc. will become CEO of Caldera, Inc., and David
McCrabb, current president of the SCO Server Software Division, will become
president and COO of Caldera, Inc. Jim Wilt, current president of the SCO
Professional Services Division will become president of the newly formed
Caldera Services Division. Doug Michels, president and CEO of The Santa Cruz
Operation, Inc., will join the Caldera, Inc. board of directors. SCO will
also appoint a second representative to the board of Caldera, Inc. 

Industry Impact

"This acquisition is an industry-changing event that puts Caldera front and
center as the answer to the enterprise question," said Ransom Love,
President and CEO of Caldera Systems, Inc. "Caldera will further broaden and
validate both the Linux and UNIX industries and communities, by providing
open access to its unified Linux and UNIX technologies, and by offering
support, training and professional services to customers worldwide. Caldera
is fully committed to supporting and servicing the SCO OpenServer and
UnixWare communities."

Together, technologies from Caldera Systems and the SCO Server Software and
Professional Services Divisions will provide enterprise-class solutions with
worldwide support and distribution infrastructure. 

"The new company will be a very strong entity that we believe will compete
successfully on a worldwide basis, "said David McCrabb, president of the SCO
Server Software Division.  "Caldera, Inc. will incorporate a worldwide
network of sales and support offices, a strong commercial UNIX system
business, and a rapidly growing open source company. This combination will
be a force to contend with in the worldwide market for Internet solutions on
high volume platforms." 

	"Businesses implementing eBusiness or other Internet based customer
interaction systems will benefit greatly from the Open Internet Platform,"
said Jim Wilt, president of the SCO Professional Services Division. "Linux
and UNIX technologies are cornerstones providing solutions to problems that
businesses face every day."

"This transaction enables us to invest in the exciting growth opportunities
we see for Tarantella," said Doug Michels, CEO of The Santa Cruz Operation,
Inc. "This growth is fueled by increasing business use of the Internet, by
the continued attractiveness of thin-client computing, and by the
accelerating adoption of the Application Service Provider (ASP) business
model." 

Forum 2000
Caldera Systems will join SCO in hosting Forum 2000, to be held August
20-23, at the University of California, Santa Cruz. At the event, Caldera
plans to unveil their updated product offering. For more information visit
www.sco.com/forum2000.

Caldera and Open Source
Caldera Systems is a leader in--and supporter of--the Open Source movement.
Please visit www.openlinux.org to download Caldera Systems' technologies
that have been open-sourced-including but not limited to-LIZARD, Caldera
Open Administration System (COAS), Webmin, OpenSLP, the NetWare Kernel File
System (NKFS) and the OpenLinux 2.2 port for Sun's SPARC(tm) and
UltraSPARC(tm)-based platforms. 

Caldera Systems, Inc.
Caldera Systems, Inc. (Nasdaq: CALD) is a "Linux for eBusiness" technology
leader in developing and marketing successful Linux-based business
solutions, including its award-winning OpenLinux, NetWare for Linux, Linux
technical training, certification and support-with free 30-day phone support
and on-site consulting. Caldera OpenLearning Providers offer exceptional
distribution-neutral Linux training and certification based on Linux
Professional Institute (LPI‘) certification standards. Caldera Systems
supports the open source community and is a leader in, and advocate of Linux
Standard Base (LSBš) and LPI‘.
Caldera, Inc. was co-founded in 1994 by Ransom Love. Caldera Systems, Inc.
was founded by Ransom Love in 1998 to develop Linux-based business
solutions. Based in Orem, UT, Caldera Systems has offices and 800+ resellers
worldwide. For more information, see www.calderasystems.com  or in the US
call 888-GO-Linux (888-465-4689). 

About SCO
SCO is a global leader in server-based software for networked business
computing. SCO is the world's number one provider of UNIX server operating
systems, and the leading provider of network computing software that enables
clients of all kinds--including, PCs, graphical terminals, NCs, and other
devices - to have webtop access to business-critical applications running on
servers of all kinds. 
SCO designed Tarantella web-enabling software, the world's first
web-enabling software for network computing. SCO sells and supports its
products through a worldwide network of distributors, resellers, systems
integrators, and OEMs. For more information, see SCO's home page at:
www.sco.com

Caldera is a registered trademark of Caldera Systems, Inc. All other
products, services, companies, events and publications are trademarks,
registered trademarks or servicemarks of their respective owners in the U.S.
and/or other countries.

SCO, The Santa Cruz Operation, the SCO logo, the Tarantella logo,
Tarantella, UnixWare, and SCO OpenServer are trademarks or registered
trademarks of The Santa Cruz Operation, Inc. in the USA and other countries.
UNIX is a registered trademark of The Open Group in the US and other
countries. All other brand or product names are or may be trademarks of, and
are used to identify products or services of, their respective owners.

LINUX is a registered trademark of Linus Torvalds.

Press Note:
Mr. Love and Mr. Michels will discuss the acquisition with the media on a
conference call beginning at 1:30 p.m. EST.  To participate in the call,
please contact the press references listed below.

Forward Looking Statements 
Cautionary Note Regarding Forward-Looking Statements under the Private
Securities Litigation Reform Act of 1995: Information in this release that
involves Caldera's, SCO's and, assuming the (Acquisition) of the SCO Server
Software and Professional Services Divisions (the Acquisition) is completed,
the combined companies' expectations, beliefs, hopes, plans, intentions or
strategies regarding the future are forward-looking statements that involve
risks and uncertainties. These statements include statements about
Caldera's, SCO's and the combined companies' strategies in the marketplace,
their market positions and their relationships with customers. 

All forward-looking statements included in this release are based upon
information available to Caldera and SCO as of the date of the release, and
neither Caldera, SCO nor the combined companies assume any obligation to
update any such forward-looking statement. These statements are not
guarantees of future performance and actual results could differ materially
from current expectations. Factors that could cause or contribute to such
differences include, but are not limited to 1) the potential disruption of
Caldera's and  SCO's businesses that might result from employee or customer
uncertainty, and lack of focus following announcement of the Acquisition in
connection with integrating the operations of Caldera and SCO; 2) product
integration risk due to overlapping products and technologies; 3) the
possibility that the transactions described herein might not be consummated;
4) the effects of the public announcement of the Acquisition on Caldera's
and SCO's stock prices, their sales and operating results, their ability to
attract and retain key personnel and the progress of certain of their
development projects; 5) the risk that the announcement of the Acquisition
could result in decisions by customers to defer purchases of products of
Caldera or SCO; 6) the substantial charges to be incurred due to the
Acquisition, primarily in the first and second quarters of the year; 7) the
risk that redundancy in staffing and infrastructure could reduce efficiency
and increase costs; 8) the difficulties of managing geographically dispersed
operations; and 9) the risk that other benefits sought to be achieved by the
Acquisition will not be achieved.  These and other factors are risks
associated with Caldera's and SCO's businesses that may affect their
operating results and are discussed in SCO's Annual Report on Form 10-K for
the fiscal year ended September 30, 1999 filed with the Securities and
Exchange Commission ("SEC") on December 28, 1999 and Caldera's and SCO's
quarterly reports on Form 10-Q filed with the SEC.

Additional Information and Where to Find It:  It is expected that Caldera
will file a Registration Statement on SEC Form S-4 and Caldera and SCO will
file a Joint Proxy Statement/Prospectus with the SEC in connection with the
Acquisition, and that Caldera and SCO will mail a Joint Proxy
Statement/Prospectus to stockholders of Caldera and SCO containing
information about the Acquisition.  Investors and security holders are urged
to read the Registration Statement and the Joint Proxy Statement/Prospectus
carefully when they are available.  The Registration Statement and the Joint
Proxy Statement/Prospectus will contain important information about Caldera,
SCO, the Acquisition, the persons soliciting proxies relating to the
Acquisition, their interests in the Acquisition, and related matters.
Investors and security holders will be able to obtain free copies of these
documents through the website maintained by the SEC at http://www.sec.gov.
Free copies of the Joint Proxy Statement/Prospectus and these other
documents may also be obtained from Caldera by directing a request through
the Investors Relations portion of Caldera's Web site at
http://www.caldera.com or by mail to Caldera Systems, Inc., 240 West Center
Street, Orem, Utah  84057, attention:  Investor Relations, telephone (801)
765-4999; or from SCO by directing a request through the Investors Relations
portion of SCO's Web sit at http://www.sco.com or by mail to The Santa Cruz
Operation, Inc., 425 Encinal Street, Santa Cruz, California 95061,
attention:  Investor Relations, telephone (831) 427-7399. 

In addition to the Registration Statement and the Joint Proxy
Statement/Prospectus, Caldera and SCO file annual, quarterly and special
reports, proxy statements and other information with the SEC.  You may read
and copy any reports, statements or other information filed by Caldera or
SCO at the SEC public reference rooms at 450 Fifth Street, N.W., Washington,
D.C. 20549 or at any of the SEC's other public reference rooms in New York,
New York and Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for
further information on the public reference rooms.  

Caldera's and SCO's filings with the SEC are also available to the public
from commercial document-retrieval services and at the Web site maintained
by the SEC at http://www.sec.gov. 

Participants in Solicitation:  Caldera, its directors, executive officers
and certain other members of management and employees may be soliciting
proxies from Caldera stockholders in favor of the issuance of common stock
in the Acquisition.  Information concerning the participants in the
solicitation is set forth in a Current Report on Form 8-K filed by Caldera
on August 2, 2000. 

Press ONLY Contacts:
Nancy Pomeroy				
Caldera Systems, Inc.				
Phone: (801) 765-4999 ext. 304			
Fax: (801) 765-1313 				
Email: nancy@calderasystems.com

Jan Tarzia
The Santa Cruz Operation, Inc.
Phone: (831)427-7221
Fax: (831) 427-5418
Email: jant@sco.com