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CORRESP
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[Dorsey & Whitney LLP Letterhead]

NOLAN S. TAYLOR

(801) 933-7366

FAX (801) 933-7373

taylor.nolan@dorsey.com

September 7, 2005

VIA EDGAR
AND FEDERAL EXPRESS

Securities and Exchange
Commission

Division of Corporation
Finance

450 Fifth Street, N.W.

Mail Room 4561

Washington, D.C.  20549

Attention:  Mr. Mark P. Shuman, Branch Chief – Legal

  Re:

  The SCO Group, Inc.

  Registration Statement on Form S-1

  Filed on July 28,
  2005

  File No. 333-127000

Dear Mr. Shuman:

This
letter responds to your letter dated August 23, 2005, which sets forth the
comments of the staff (the “Staff”) of the Securities and Exchange Commission
(the “Commission”) relating to the above-referenced registration statement (the
“Registration Statement”) of The SCO Group, Inc. (the “Company”).  In response to the Staff’s comments, we have
enclosed with this letter proposed amended text, excluding exhibits (the “Amendments”),
for (1) the Company’s annual report on Form 10-K for the fiscal year
ended October 31, 2004 (the “Form 10-K”), (2) the Company’s
quarterly report on Form 10-Q for the quarter ended January 31, 2005
(the “First Quarter Form 10-Q”), and (3) the Company’s quarterly
report on Form 10-Q for the quarter ended April 30, 2005 (the “Second
Quarter Form 10-Q”) on behalf of the Company.  Once the Staff’s comments are addressed, the
Company will file an amended Form 10-K, First Quarter Form 10-Q and Second
Quarter Form 10-Q including the text of the Amendments and required exhibits.  We also hereby inform the Staff that the
Company anticipates that it will file an amendment to the Registration
Statement to increase the number of shares subject thereto and make other
changes related to the mechanics of the rescission offer that is the subject of
the Registration Statement.

The
information set forth in the Amendments responds to the comments of the
Staff.  The numbered responses set forth
below reproduce each of the Staff’s comments. Our responses are set off in bold
type.

Form 10-K for the
Fiscal Year Ended October 31, 2004

Item 9A.  Controls and Procedures

Comment 1:           Disclose in greater detail the nature of the
material weakness identified in your disclosure.  Disclose when the material weakness was
identified, by whom it was identified, and when the material weakness first began.  Also, revise to provide more detailed
disclosure of the specific steps you have taken, if any, to remediate the
material weakness and disclose whether you believe the material weakness still
exists as of the end of the period covered by this report.  You should clearly describe which remedial
measures, if any, were undertaken during the period covered by this report and
which measures were undertaken subsequent to October 31, 2004.  This comment also applies to your Form 10-Q
for the quarter ended January 31, 2005.

Response:                                       In response to the Staff’s
comment, the Company has revised Item 9A of the Form 10-K and Part I,
Item 4 of the First Quarter Form 10-Q accordingly.  As indicated in the revised disclosure, no
remedial measures were undertaken with respect to the material weakness until February 2005
after the quarter ended January 31, 2005.

Comment 2:           We note from the third paragraph of your
disclosure that you also had several accounting errors that affected previous
periods, specifically the quarters ended January 31 and April 30,
2004.  Revise to disclose when these
errors were identified and the period in which remedial measures were taken to
correct these errors.  In this regard, we
note that you restated your financial statements for the first three quarters
of 2004.  Were these errors part of the reason
for those restatements?  In the fourth
paragraph, you disclose that your internal controls over financial reporting “did
not identify the preceding error prior to the completion of the financial
statements.”  Revise to clarify to which
error (i.e., the material weakness or the accounting errors) and to which
financial statements (i.e., those contained in your Form 10-K or those
contained in the previous Forms 10-Q) you are referring.

Response:                                        In response to the Staff’s
comment, the Company has revised Item 9A of the Form 10-K accordingly and
made corresponding revisions to Part I, Item 4 of the First Quarter Form 10-Q.  The disclosure in the Form 10-K and in
the First Quarter Form 10-Q has been revised to indicate that the material
weakness in the Company’s internal controls over financial reporting resulted
from the aggregate effect on the Company of three accounting errors described
in the revised disclosure including: (i) the accounting error discovered
in the second quarter of fiscal year 2004 relating to not properly accounting
for a non-routine stock option grant to a non-employee of the Company in the
quarter ended January 31, 2004, (ii) the accounting error discovered
in the third quarter of fiscal year 2004 relating to our incorrect accounting
for dividends on our now retired Series A Convertible Preferred Stock and (iii) the
accounting error discovered in the first quarter of fiscal year 2005 concerning
the Company’s failure to classify as temporary equity amounts it received from
share purchasers under the 2000 Employee Stock Purchase Plan (the “ESPP”)
entitled to rescission rights and, as previously described in the third
paragraph of Item 9A of the Form 10-K.

Apart from combining to cause Company management to conclude
that a material weakness in internal controls existed, the aggregate effects of
all three accounting errors caused the Company to restate its financial
statements for the first three quarters of its fiscal year 2004.  Prior to discovering the accounting error
concerning the Company’s failure to classify as temporary equity amounts it
received from share purchasers under the ESPP entitled to rescission rights,
the Company had concluded that the two previously discovered accounting errors
described above, both individually and collectively, were not material and did
not require restatement.

Form 10-Q for the
Quarter Ended January 31, 2005

Item 4.  Controls and Procedures

Comment 3:           We note your disclosure that a material
weakness identified in conjunction with the preparation of your Form 10-K
for the fiscal year ended October 31, 2004, still existed as of the end of
the period covered by this report.  We
also note your disclosure that your internal controls over financial reporting
identified the referenced errors prior to the completion of the financial
statements as of and for the three months ended January 31, 2005. Your
disclosure in your 10-K states that your internal controls over financial
reporting did not identify similar errors prior to the completion of the
financial statements for that period.
However, your current disclosure states that there were no changes to
your internal controls over financial reporting that materially affected, or
were reasonably likely to materially affect, your internal controls over
financial reporting during the quarter ended January 31, 2005.  Tell us how your internal controls over
financial reporting were able to identify the weakness in this period if there
were no changes to internal controls over financial reporting.

Response:                                        The Company confirms that
there were no changes to its internal controls over financial reporting that
materially affected, or were reasonably likely to materially affect, its
internal controls over financial reporting during the quarter ended January 31,
2005.  The internal controls over
financial reporting in place during the quarter ended January 31, 2005,
although not materially changed, were adequate to enable Company management to
identify the material weakness related to accounting for non-routine capital
stock and stock option transactions.  As
part of its then existing internal controls, Company management requested that
its legal counsel undertake a review of the Company’s equity incentive plans.  As a result of this review and the discovery
of the third accounting error described in our response to Comment 2 above
concerning the Company’s failure to classify as temporary equity amounts it
received from share purchasers under the ESPP entitled to rescission rights,
and given the two prior accounting errors described in our response to Comment
2 above, Company management determined in January 2005 that the material
weakness existed.

The Company has added disclosure to Item 9A of the Form 10-K
and Part I, Item 4 of the First Quarter Form 10-Q to better explain
how the Company’s

internal controls over financial reporting were able to
identify the material weakness in the quarter ended January 31, 2005 even
though there were no changes to such internal controls in such period.  As stated in our response to Comment 1 above
and in our revised disclosure in both the Form 10-K and the First Quarter
10-Q, all changes in the Company’s internal controls to remedy the material
weakness were undertaken after the quarter ended January 31, 2005.

Form 10-Q for the
Quarter Ended April 30, 2005

Item 4.  Controls and Procedures

Changes in Internal Control
Over Financial Reporting

Comment 4:           Please revise this section to avoid
generic descriptions of the changes to your internal controls over financial
reporting and to help readers of this disclosure understand why such
improvements matter.  For example, how
did implementing an equity compliance checklist improve your internal controls
over financial reporting?  What “additional
review and approval procedures” are you referring to?  Explain what “additional detail transactional
controls” were implemented and how this assists in improving internal controls
over financial reporting.

Response:                                        In response to the Staff’s
comment, we have revised the disclosure in Part I, Item 4 of the Second
Quarter Form 10-Q accordingly.

Comment 5:           Finally, we note that all changes referenced
here were also disclosed in the Item 9A disclosure in your Form 10-K for
the year ended October 31, 2004, and in the Item 4 disclosure in your Form 10-Q
for the quarter ended January 31, 2005, as having been implemented in
response to the identified material weakness.
If any of these changes were implemented prior to February 1, 2005,
then your Item 308(c) disclosure for the report covering such quarter
should also be amended to disclosure any change to internal control over
financial reporting that occurred in those periods.

Response:                                        The Company submits that
none of the changes in internal controls referenced in Part I, Item 4 of
the Second Quarter Form 10-Q was implemented prior to February 1,
2005.

In
addition to responding to the comments referenced above, the Company
acknowledges that:

•                  should the Commission or the Staff, acting
pursuant to delegated authority, declare the filing effective, it does not
foreclose the Commission from taking any action with respect to the filing;

•                  the action of the Commission or the Staff,
acting pursuant to delegated authority, in declaring the filing effective, does
not relieve the Company from its full responsibility for the adequacy and
accuracy of the disclosure in the filing; and

•                  the Company may not assert Staff comments and
the declaration or effectiveness as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the United
States.

In
addition to responding to the specific comments set forth above, the Company
has made other limited changes in the Amendments to improve and clarify the
Company’s disclosure concerning internal controls over financial reporting, and
to make conforming changes throughout the document. The Company and we are
available to discuss any issues presented by the initial comments and the
responses contained in this letter or to respond to further comments.

  Sincerely,

  DORSEY & WHITNEY
  LLP

  /s/  Nolan S. Taylor

  Nolan S. Taylor

UNITED
STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K/A

(Amendment
No.1)

(Mark
One)

ý ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended
October 31, 2004

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the transition period from
to               .

Commission file number: 0-29911

THE SCO GROUP, INC.

(Exact name of registrant as specified in its charter)

  Delaware

  87-0662823

  (State of incorporation)

  (I.R.S. Employer

  Identification No.)

  355
  South 520 West

  Lindon, Utah 84042

  (801)
  765-4999

  (Address of principal executive

  offices, including zip code)

  (Registrant’s telephone

  number, including area code)

  Securities pursuant to Section 12(b) of the Act:  None

  Securities registered pursuant to Section 12(g) of the Act:

  Title
  of Each Class

  Common Stock, par value $.001 per share

Indicate
by check mark whether the Registrant (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
YES o  NO
ý

Indicate
by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation
S-K is not contained herein, and will not be contained, to the best of the
Registrant’s knowledge, in definitive proxy or information statements
incorporated by reference on Part III of this Form 10-K or any
amendment to this Form 10-K.  o

Indicate by check mark whether the Registrant is
an accelerated filer (as defined in Rule 12b-2 of the Act).  YES o  NO
ý

The aggregate market value of the common stock
held by non-affiliates of the Registrant already made $33,021,000 based on the
reported last sale price of common stock on April 30, 2004, which is the
last business day of the Registrant’s most recently completed second fiscal
quarter.

The number of shares of the Registrant’s common
stock outstanding as of March 30, 2005, was 17,915,292.

EXPLANATORY
NOTE

This Amendment No. 1 on Form 10-K/A (this “Amendment”)
amends the Annual Report on Form 10-K (the “Original Annual Report”) for the
year ended October 31, 2004, which was originally filed with the Securities and
Exchange Commission (the “SEC”) on April 1, 2005.  We are filing this Amendment in response to a
comment letter received from the SEC in connection with its review of our registration statement on
Form S-1 (File No. 333-127000).  We have
modified Item 9A “Controls and Procedures” in this Amendment pursuant to the
comment letter to modify and enhance our disclosure regarding our disclosure
controls and procedures and the material weakness in our internal controls over
financial reporting described in Item 9A.

We have included as exhibits to this Amendment new
certifications of our principal executive officer and principal financial
officer and have revised the list of exhibits included in Item 15 accordingly.

Except as described above, no attempt has been made in
this Amendment to modify or update other disclosure presented in the Original
Annual Report.  This Amendment does not
reflect events occurring after the filing of the Original Annual Report or
modify or update those disclosures, including the exhibits to the Original Annual
Report affected by subsequent events.
Accordingly, this Amendment should be read in conjunction with our filings with the SEC
subsequent to the filing of the Original Annual Report, including any
amendments to those filings.

  PART I.

  Item 1.

  Business

  Item 2.

  Properties

  Item 3.

  Legal Proceedi