March 17, 2003

Dear Valued TeamSCO Partner:

SCO appreciates the business relationship that we have enjoyed with you in the past and we look forward to being your business partner in the future. Traditionally, one element of this strong partnership has been a consistent line of communication regarding SCO's business offerings and strategies.

Many of you have undoubtedly read about SCO's recently announced lawsuit against IBM. Although we are legally constrained regarding many details of this action, we would like to provide you with some background information that will help you to understand our position on this matter.

IBM has been a long time partner of SCO's and is also a long time licensee of SCO's UNIX source code. SCO has more than 30,000 contracts with UNIX licensees and we take each of them very seriously. It is important for SCO to protect each of these licenses to uphold the validity and integrity of them. Although the vast majority of these licenses are honored and upheld, on occasion SCO must take action to protect these licenses.

In the case at hand, SCO initially approached IBM about this diplomatically. However, in the end we came to an impasse. More than three decades and billions of dollars have gone into developing UNIX, and SCO has a responsibility to protect that investment for the benefit of every customer, developer, reseller, shareholder, employee and partner. Thus it has become necessary to protect this highly valuable asset through the legal system.

Customers should not view this lawsuit as a threat to their business. SCO UNIX and SCO Linux customers should rest easy knowing that they have based their business on products from the company that owns the UNIX operating system. SCO will continue its day to day operations as usual. We will continue to service our customers with the responsiveness and attention to detail as we have in the past. 

SCO is on its way to one of its strongest quarters in more than 3 years. During our current quarter we expect revenues to be between $23-25 million. The company is financially healthy, debt free and expects to be net income positive in the next quarter. 

We are aggressively furthering UNIX development with UNIX SVR 6 and we will soon be introducing SCOx, our next generation UNIX-based platform technology. We continue to be a founding member of UnitedLinux and sell/support our version of UnitedLinux called SCO Linux. As was announced last week, Oracle made UnitedLinux part of their Unbreakable Linux platform and we look forward to working more closely with Oracle and their customers. 

The company plans to roll out all of our latest strategies and products at our annual conference, SCO Forum, scheduled to take place June 1-3 in Las Vegas. We look forward to seeing many of you there. We will soon be sending out information on registration and the general and breakout sessions.  Watch your email box and http://www.sco.com/scoforum/ for more information.

If you have any questions or comments, please feel free to contact me directly or your SCO representative.

Very sincerely yours,

Darl McBride 
President and CEO
The SCO Group

______________________________________________________________________
This message was sent by The SCO Group using Responsys Interact (TM).

To view our permission marketing policy:
    http://www.rsvp0.net