Caldera, Inc.

» see caldera.com as it lived, on the wayback machine

~ the obit ~

Caldera was founded in Utah in October 1994 by Bryan Sparks and Ransom Love, both of whom had just come out of Novell, and incorporated on 25 January 1995. The money behind it was Ray Noorda's. Noorda had run Novell from 1982 until 1994 and had watched NetWare go from the default corporate network to a product with a shrinking future once Microsoft put networking inside Windows NT. He left with a personal fortune and put a large part of it into the Canopy Group, a Utah investment vehicle that seeded a run of small companies. Caldera was one of them, and it was the one with a specific job.

On 23 July 1996 Caldera bought Novell DOS 7 and the rest of the old Digital Research software assets from Novell for four hundred thousand dollars plus a royalty on anything it later earned from them. That price is the whole story in one number. An operating system that had shipped on retail shelves six years earlier, with an installed base and a name people knew, was worth less than a house. On the same day the purchase closed, Caldera filed suit against Microsoft in federal court in Utah.

The complaint was about monopolization and illegal tying, with exclusive dealing and tortious interference behind them. The argument was that Microsoft had not beaten DR-DOS on the merits but had used its control of Windows and its contracts with PC makers to make DR-DOS unsellable. Microsoft moved for summary judgment on every count. In 1999 the Utah court threw most of those motions out and set trial for February 2000, which meant a jury in Salt Lake City was about to hear six years of internal Microsoft mail read aloud.

It never got there. On 7 January 2000 the two sides settled, and the agreement sealed the amount. Microsoft took a charge that quarter that analysts read as a couple of hundred million and nobody could confirm it. The number came out nine years later, in discovery for Novell's own antitrust case against Microsoft: 280 million dollars. Caldera, Inc. had no product line left to run by then. It distributed the settlement to its shareholders, chief among them Noorda, and stopped existing.

~ the rap sheet ~

~ the four hundred thousand dollar asset ~

The asset had a long pedigree for something sold at that price. DR-DOS came out of Digital Research, Gary Kildall's company, which had written CP/M and then lost the IBM PC contract to a Seattle program Microsoft bought and renamed. DR DOS 5.0 arrived in 1990 with a full-screen editor and memory management that MS-DOS did not match until its own 5.0 shipped the following year. Novell bought Digital Research in 1991, shipped Novell DOS 7 in 1993, and then let it sit. The company that buried it is the same company Noorda had run, which is a detail the lawsuit never had to mention out loud. The Digital Research end of this is a grave of its own on this site.

Caldera did one genuinely interesting thing with the code before the case swallowed it. In 1997 it released OpenDOS 7.01 with source, free for non-commercial use, at a moment when almost nobody was publishing operating system source for any reason. Hobbyists picked it up immediately. Then the company withdrew the offer, because source in the wild complicates a trade secret argument, and the release survives only in the archives people made at the time.

~ the aard code ~

The exhibit everyone remembers is a piece of encrypted junk inside the Windows 3.1 beta. It checked whether the machine was running Microsoft's DOS, and when it found something else it printed a non-fatal error suggesting the user had an incompatible system. It did nothing else. Andrew Schulman took it apart in 1993, named it the AARD code after the initials embedded in it, and published the disassembly. Microsoft's position was that the check was a legitimate compatibility precaution left in by accident and disabled in the shipping release.

The contracts mattered more than the code did. Microsoft sold DOS to PC manufacturers on a per-processor license, meaning a maker paid Microsoft for every machine it built whether or not that machine shipped with MS-DOS on it. Under that deal a manufacturer who also wanted to offer DR-DOS would be paying twice. The Federal Trade Commission and then the Department of Justice had already gone after per-processor licensing before Caldera filed, and the 1994 consent decree ended the practice going forward. Caldera's suit was about what it had already done.

~ what the money bought ~

The company had split itself in two on 2 September 1998, well before the settlement. Caldera Systems took the Linux distribution and went its own way toward an IPO, a purchase of SCO's Unix business and eventually a decade of litigation that made the name toxic. That is a separate stone on this site and it belongs there. Caldera Thin Clients took DOS and the embedded work, renamed itself Lineo on 20 July 1999, and turned into an embedded Linux vendor during the window when everyone thought that was a business. Lineo became Embedix, and Embedix was bought by Metrowerks in November 2002.

DR-DOS itself ended up at DeviceLogics, a small outfit backed by Sparks, where it sold as an embedded boot environment to people building kiosks and point-of-sale terminals. It is still the thing you find under some industrial hardware if you look. Noorda died in 2006. The Canopy Group kept operating and kept litigating, and the 280 million dollars is the only part of the Caldera story that came out the way it was supposed to.

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