Slashdot Mirror
SCO's Biggest Investor Admits It Loves IP Lawsuits
Roblimo writes "A Baystar Capital spokesperson has finally admitted, directly and on the record to NewsForge reporter Chris Preimesberger, that they believe SCO's only viable asset is the potential proceeds of lawsuits against Linux users and vendors. 'We're looking for the best return we can, and we think the focus should be on IP licensing (and enforcement),' said BayStar spokesman Bob McGrath."
... is a bad investor. =\
::signature space for rent::
Hmmm, I should contact them. Maybe they are interested in my bridge selling business too ...
CNN is carrying a story about one of the new investors in SCO, BayStar Capital Management, which wants SCO to "shake up its management and sharpen its focus on the potentially lucrative legal fight" and "spend less money on its Unix products." One has to wonder what BayStar is expecting as a reaction to their being so... blunt.
Isn't RBE in for 30 million. thats more than Baystar.
How can Baystar be the "biggest investor" ?
Are you sure you don't mean 'Darl Vader'
Or perhaps 'Darth McBride'?
But not nearly as unbelievable as it sounds. Like any 'good' software company, they believe their value lies in their IP, which it does. SCO seems to feel that people have infringed on their IP significantly enough for them to make a business out of taking money back from those whole 'stole' from them.
This in itself isn't really that horrible, because they're just updating their business model to profit off of all the supposed stealing thats been going on. That is, if they could somehow get licensing fees from everyone running linux, that'd be a viable business.
Of course, because it's SCO, no one really stole anything (as far as we can tell). And that's what makes them evil: making false accusations about infringement to drive stock price up, not pursuing what is rightfully theirs under the law.
The reaction shouldn't be "omg! software company thinks their IP is valuable!" it should be "omg! software company is making outrageous claims about what they own!"
may be against Baystar. i would assume that a capital investment company, especially one that invests in IP would do a complete and comprehensive evaluation of what they are investing in. which leads me to this: SCO painted a picture with *so* much recovery (lawsuit/licensing revenue) that it blinded them to the reality of situation.
one hopes that when the countersuits start flying that baystar is named as a defendant right under sco.
eric
Go not unto/. for advice, for you will be told both yea and nay (but have nothing to do with the question)
There is nothing else that SCO has that is even remotely valuable. Nobody is going to want their outdated Unix anymore, especially since they'd be sued if they even looked cross-eyed at Linux. Suing your customers tends to drop ye olde customer satisfaction rating down quite a bit. The only way BayStar will come close to recouping their $20 million is if SCO survives long enough to win its suits. Both of those prospects are dubious at best. I think the big thing that BayStar (and others) will be learning is not to take investment advice from Microsoft.
Option 2 is expensive and risky by comparison. Sure, you want to develop new products, but if you are not milking what you can out of the existing ones, then there is no point in developing new ones! Management is being (criminally) negligent if it doesn't pursue option 1. LOTS of companies make money this way by licensing technology. If SCO does have a basis (or management believes it has a basis) for these claims, then management has an obligation to pursue this course.
The really interesting points here, however, are:
>When the slashdot crowd are actually starting to like Darl for sinking the ship, THEN its a good idea to get rid of him.
Not only is McBride our top pick for steering SCO into the ground (taking the investors with him) by using his large mouth to talk about "millions of lines of literal copying" that they have again failed to identify -- thereby again failing to comply to the court order to be specific (the next hearing will be very interesting. Will IBM finally ask for sanctions, or are they just too nice for that? :-) -- but he's also raiding the SCO coffers all by himself, lifting $968,000 out of the company last year! Almost a million dollars in salary+bonus from a business that's a COMPLETE FAILURE! Well, I guess it's not a complete failure if you count the core business as being 'stock scams', but let's just pretend they're a litigation company instead.
McBride, we're on your side! Don't step down now -- You've got to ride this out (...and into that orange jumpsuit...).
Belief is the currency of delusion.
What are the social and legal effects of this kind of business going to create? In the unlikely event that SCO were to win big money for BayStar, other groups will begin to seek similar "investments." I see a progression here:
1. Mutual funds and VC groups begin to seek out luctrative litigation opportunities.
2. People begin to invest in these groups, because of the high rate of return. Skilled lawyers scour the land for untapped "violations" or negligence.
3. The well begins to dry up. Investors need to keep the cash flowing in. but the only targets left don't carry enough cash to make them good targets. So they lobby the Federal Government to mandate the remaining targets to carry insurance.
4. The risk is spread out, and we all pay more to keep BayStar's numbers in the black... with no social benefit whatsoever.
5. Repeat, industry by industry.
Trying to use sarcasm in text-based forums does not work.
I personally find it relieving to see truth start to poke its head into play. This is why IBMs game plan is so strong, patience is a virtue, and they are execizing their power in a calm and controlled fashion. The key to a good lie is being able to use the lie and then put it behind you; SCOs lies and fabrications can't stand up to the light of this kind of media attention forever and now we see the curtain coming down. I dont think they realized how difficult continued deception can really be.
I was crazy back when being crazy really meant something. (Charles Manson)
From McGrath:
I think that statement (esp. adding "enforcement" to it) as well as this summary of the NY Times article by the author caused the OP to make the allegations.
According to those two statements, one could conclude that legal action is all Baystar is looking for.
Maybe that's why BayStar now wants their money back from SCO?
Not quite. My assessment is that they never expected Darl to go hog wild on the PR front, nor did they expect him to be "bright" enough (in his own parasitic, pathetic way) to realize he was being set up to drive SCO into the ground.
Looking at BayStar's backers, the initial move against OSS was tremendously clever and dangerous. By funding small battles in minor lands, the goal was to poison OSS. Apply a stigma to it, make it look shady, risky and dangerous and corporate America will stick with the institutions of Microsoft, Solaris, Oracle, SCO, etc. (this theory helps explain why Oracle and Sun have appearances of being on the "wrong" side of OSS and may be receiving subpoenas in the matter - Oracle already has).
Many of Groklaw's commentators have difficulty understanding why SCO, BayStar, Boies & crew, Sontag, and many other intelligent (ethics aside) people bet on such a ludicrous case. Sontag's recent copyright to patent morphing attempts, for instance, is terribly weak and Sontag clearly must be aware of it. But this case wasn't initially propped up to be the primary battleground between the proprietary software world and OSS. It was intended to be a lengthly skirmish between a pump & dump effort from a long-dead UNIX vendor and OSS.
What went wrong? They hired the right white-shoe legal firm for the job (Boies), greased the pols (Hatch) and got the right court. What they didn't expect is an effective, organized opposition (e.g. Groklaw) and more so, did not count on losing the traderag spin (you can bet there's been some money spent to protect that message, but you can't stop them from dropping the paid spin once the issue goes mainstream, although there still is the occasional hack for hire out there). Oddly enough, though, the greatest mistake was trusting Darl and Chris to remain stupid and unaware that they were being set up to fail. Darl in particular believed the lies and the thought that he could actually own the empire that controlled what is presently OSS got him. Imagine the power and wealth from being the CEO to own Linux? They shouldn't have underestimated Darl's ability to self-delude, let alone his greed and power drive. The created their own monster and can't control him (though BayStar is now trying to put the proverbial genie back in the bottle). BayStar has a slight problem in this move, though, as it won't immediately kill Darl and instead, may make him feel even more attacked. Having dealt with pump & dump schemers like Darl before, the last thing you want to do is corner him. BayStar should have moved to redirect (e.g. offer another $20 mil or so and slow things down and move the matter off of the front pages of the tech press. Either that, or promote Darl to some "critical" to allow him to focus on building the future super Linux company and "not be distracted from the day to day of nasty legal stuff" - anything to get him out of SCOg).
This truly is terrible news for the anti-OSS coalition. Fighting the main battle on this issue is a historic error. Should Linux be permitted to be decreed "legitimate and safe" through this process, you can expect Microsoft to lose its OS business within 5-10 years (being perhaps relegated to an office suite vendor), Sun left to push high-end AMD or Intel boxes, and Oracle simply to perish (hey Larry, can you say "Post-gres-ql?" I didn't think you could!).
IBM's motivation is tremendously historical. They got screwed by the OS play with Gates the first time around and are salivating at a royalty-free OS that frees them from bundling leverage and other annoyances, let alone the license expense. Although they derive their own benefit, kudos to IBM for escalating the skirmish into an all-out war.
*scoove*