SCO News Roundup

Bootsy Collins managed to combine all of today's SCO stories. He writes "The firm of David Boies, SCO's attorney in charge of their Linux IP cases, has announced their compensation (so far) from SCO: $1 million USD in cash, and $8 million in SCO stock. Keeping that stock price high until they can sell is clearly of some importance to Boies, Schiller and Flexner LLP. Given the cost of selling a $50 million convertible note to fund their legal actions, the actual cost to SCO is more like $17 million USD. Meanwhile, SCO CEO Darl McBride is saying that Novell's purchase of SuSE violates a non-competition agreement reached when SCO bought the Unix source, and thus is legally actionable by SCO. Over at the Register, they've noticed that SCO's latest SEC filings indicate how firmly they're putting all their eggs in the legal basket: the filings effectively say that 'SCO has already lost business from its loyal customer base, and it expects to lose more.' And finally, in response to a poor response to SCO's attempts to get Fortune 1000 companies to pay $699/server for 'Linux licenses' before the fee jumped to $1399, SCO has announced that the $699 discount rate will apply to the end of 2003. Hurry before time runs out again."

Comments

Re:Linux written to compete with SCO?

[prgrmr]

Depending on how broadly the no-compete clause was written, if it covers linux, there's a chance the same would apply to NetWare as well, cause NetWare isn't Unix either.

On the other hand, hasn't SCO changed their core products to litigation and (trying) to sell licenses for other company's software?

The historical importance of SCO

[heironymouscoward]

Guys,

You are watching history in the making. SCO might look like an annoying pest, a cynical manipulator of the stock market, a bucket of shit without the bucket, but think about how future generations will view this.

First, this is the first serious industry-wide debate about the legitimacy of Linux, as an open source concept, as a child of the GPL, and as an operating system. The simple fact that people are prepared to go to war (and this is war) over Linux raises it from a curiosity to a treasure.

Second, this is of course about much more than SCO vs. The World, and future generations will place it in its correct context. Mainly, this is about Microsoft trying to ward off the oncoming Linux mammoth, unable to attack Linux head-on for many reasons, but unable to watch as it demolishes their market with an apparently unstoppable force.

Thirdly, this is about the Old versus the New, on the one side the forces of "software is a product" and on the other, the forces of "software is a commodity technology". The period 1998-2003 saw software evolve from a rare and precious thing to something that is so cheap we simply can't build harddisks large enough any more. SCO and Microsoft are firmly in the "Old" camp, IBM and most of the rest of the world are in the "New" camp. You don't need to be a genius to see the inexorable grip that the technology cycle has on software, and the consequences of this.

SCO lost before they started, that is clear. But this battle defines the line that must be crossed to move into the future. Stick with proprietary platforms, die. Move to commodity platforms, live and prosper.

It would be a good time to sell your Microsoft shares too: $51 billion can disappear remarkably quickly when the money stops rolling in.

Questionable Legal Fee Payment

[fishbonez]

While not illegal, the use of stock options for payment of legal fees has come under fire lately because of the inevitable conflicts of interest and their association with recent corporate scandals.

Richard Painter, a Professor at the University of Illinois who was an early proponent of the legal reforms now included in the Sarbanes-Oxley Act, wrote to the SEC recently. He stated that they should examine "conflicts created by unorthodox methods of compensating lawyers (particularly receipt of stock in lieu of legal fees and contingent fee arrangements such as the fee of over $30 million reported to have been earned by Time Warner's counsel in that company's merger with AOL)."

Hopefully these types of arrangements will be put to an end soon. While I don't see an end to contingency fees (because that's how many people are able to afford lawyers), I can certainly see practice of using stock options as payment coming to an end.