Canopy Coup? SCOs Parent Dumps Top Execs

The Canopy Group has ousted its CEO and CFO, leaving questions about whether subsidiary SCO will continue its Linux-related lawsuits.

Two top executives of The Canopy Group, the parent company of Unix firm The SCO Group Inc., have unexpectedly left the firm.

SCO spokesperson Blake Stowell confirmed that Canopy had ousted Ralph Yarro, president, chairman and chief executive of the Lindon, Utah-based business, and Darcy Mott, chief financial officer of the company. He was unable to explain why the pair of veteran Canopy managers had been let go. "I honestly dont know," he said. Calls to Canopy were not returned.

Yarro was a graphic artist who worked for Ray Noorda, founder of Novell Inc. and Canopy. Yarro gained Noordas trust and rose to Canopys top position in February 1996. Mott had served as Canopys vice president, treasurer and CFO since May 1999. Before joining Canopy, Mott worked as vice president and treasurer for Novell.

Yarro has been replaced—at least for now—by Bill Mustard. Mustard was most recently a managing director for Smooth Engine, a senior executive consulting firm.

According to a report in The Salt Lake Tribune, which broke the story, Mustard has been meeting this week with management of Canopys subsidiaries, including SCO CEO Darl McBride.

Many people are wondering what effects, if any, these upper management changes will have on SCO and its Linux/Unix-related lawsuits with IBM and other companies.

Stowell said there would be "no changes at this time. Ralph Yarro remains our chairman, Darcy Mott remains a board member, and Canopy remains a majority shareholder of SCO."

Analysts, however, see the potential for change with these executive moves.

"Canopy Group has stakes in a number of Utah-based companies besides SCO. The personnel changes at Canopy Group are not by itself indicative of the potential outcome of SCOs lawsuits," said Stacey Quandt, senior business analyst with the Robert Frances Group.

However, she also pointed to SCOs dismal fourth-quarter results and suggested that the revenue loss could shake things up further.

"It is worth noting that SCOsource [SCOs Unix intellectual property division] revenue has declined significantly from a year ago. If SCO is unsuccessful in its efforts to sue IBM and Novell, the share price of SCO stock will fall further and then a shareholder lawsuit becomes a strong possibility," Quandt said.

/zimages/2/28571.gifClick here to read about Novells latest move in its ongoing IP war with SCO over who owns Unix.

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