SCO On the Rocks

Netromancer wrote in to alert us to a Businessweek Online article discussing the downward spiral in SCO's fortunes and luck. From the article: "The mouse that roared is barely squeaking these days. A string of recent setbacks raises grave questions about SCO's finances, its court case, and its management."

Comments

well..

[Anonymous Coward]

> Who would have thought that basing a company on litigation,
> scare tactics, and spreading FUD wouldn't work?

Microsoft?

The sad thing is

[argoff]

... isn't all the peoples lives who have been interrupted because of the lawsuit, but all the people who bought the propaganda that SCO was enterprise "material" back in the 90's while blowing off Linux.

Has anyone managed to short SCO stock?

[defile]

I've been trying since they were nearly $20/share but my broker said something about it not being available. Did Wall Street see them as being full of shit, too?

Re:Perhaps

[Anonymous Coward]

Darl has a history of litigation. He's sued THREE of his employers, has taken legal action against one of his kid's schools, sued 2 financial advisors and one of his wives is involved in 2 lawsuits against neighbours.

It's a bit like the social situation where generations of families become dependent on welfare, and as it's all they know it's all they continue doing. With Darl, it's litigation.

Re:Everyone knew it would happen..

[defile]

At this point they're probably running company affairs from their yachts, and when it implodes, so what? Won't hurt them at all, and in a year or two they'll be hired on by some other group of corporate leeches and they'll drain another company dry.

If I were dumb enough to hold SCO stock until the bitter end, I would be pretty embarassed, and litigious.

Don't the execs face severe legal punishment for this?

I preferred them between a rock and hard place

[Anthony Boyd]

What once looked like a mortal threat to Linux appears to be fading. As a result, the suit has become a nonfactor in corporate buying decisions.

Yeah, but... but... I want them to flame out in a huge court loss. I want SCO's finances and future prospects to be devastated. I want a clear and definitive signal that Linux is safe and SCO was stupid to butt heads with Open Source.

This whole "fading" thing sounds like it just leaves too many doors open for other stupid companies to do bad things, because there is no jarring precedent burned into people's minds.

Thanks to heavy cost-cutting, SCO's core Unix-server-software business is generating an operating profit now and will continue to do so in 2005, he says.

Translation: "We pretty much fired everyone except for the accountant. After all, who needs developers on staff when the OSS guys work for free? Right?"

Re:Whoa

[TokyoBoy]

I used to work as an engineer on the Caldera server and desktop teams. I was part of the many layoffs which reduced the engineering forces there to nothing. It was sas seeing friends go and everyone knew it was only a matter of time before it was their turn.

However, also being a founding trustee memeber of the Salt Lake Linux Users Group and a Linux and OpenSource advocate for years, I am very grateful that I was able to leave before the name change to SCO and the "direction change" - I would have had to quit anyway.

I still have a couple friends there. The amazing thing is that I ran into one of them (Walt Hammond) yesterday (Fri. March 4, 2005) at lunch. I was amazed at his comments. The feeling inside the company is very positive! I couldn't beleive it. It seems that (from my stand point) that the co-workers are completely blind to what is really happening. Not only with reguard to what is happening but also related to the morality (or lack thereof IMO) of their actions. He was completely positive saying that (parapharasing) "things looks so good for us right now but if you read the press, you'd think we were a sinking ship" and (again, paraphrasing) "the press says we've had major set backs but if you look, we've been winning".

I don't know if it's the blind leading the blind or if he really believes what he told me. Of course, being at the director level or above, I'd think you'd have to tote the company line or you wouldn't be around very long at SCO. So, who knows what he really believes.

FUD in the article

[Anonymous Coward]

While short on business, SCO held some potentially powerful copyrights.
The author treats SCO's ownership claims as gospel, but that has not been established in court. Novell has contested SCO's copyright ownership, a matter which is still in court. IBM has counter-sued SCO for copyright infringement and patent infringement. BSDi settled a suit against former Unix(r) owner USL which established that BSDi owned the major part of the unix(generic) copyrights, while USL held copyright on but a tiny historical remnant of the code base. SCO has a long way to go before they can be said to "hold" valid copyrights to any code that's still in use.

I wrote a letter to the article's author

[shadow255]

I'd mod you up, but I thought it might be better to share the letter I just wrote to the author/editor instead. I took exception to the entire paragraph you quoted.

To: spencer_ante@businessweek.com
Date: Sat, 5 Mar 2005 12:32:48 -0800
Subject: Article "A Linux Nemesis on the Rocks"

I read with interest your article concerning the legal battle waged by the SCO Group against IBM. While your opening paragraph paints with somewhat of a broader brush than is perhaps warranted for the present-day operating systems software landscape, it is further in that I question your grasp of the facts.

You write, "While short on business, SCO held some potentially powerful copyrights." I think it is either dishonest of you to state this, or you are genuinely unaware that there is substantial doubt over whether the SCO Group actually hold the copyrights they claim to hold. It appears that you are trying to present a balanced report drawing from various sources, so I would encourage you to consider as well the legal actions of SCO with Novell concerning those copyrights.

In the same paragraph you go on to say, "Partly funded by a hefty Microsoft license payment, SCO leveled a multibillion-dollar suit against IBM, charging that Big Blue had fed SCO-copyrighted software into Linux." You probably should have included Sun Microsystems when mentioning hefty license payments to the SCO Group. It is also putting a lot of water under the bridge to simplify the lawsuit against IBM the way you do here. The SCO Group have been trying very hard in court to claim that it is a case about contracts rather than copyrights, while making statements to the press to the contrary. In combination with the earlier "held some potentially powerful copyrights" line, this is simply misleading for readers unfamiliar with the case.

"This triggered fear and loathing in the fast-growing Linux community." I feel it is a mischaracterization of the Linux community to make this statement. While there have been some outspoken individuals who support Linux and have made strong statements in opposition to the claims of the SCO Group, the community as a whole neither fears nor hates the SCO Group per se. It would be more accurate to say that this triggered a vigorous response in the Linux community, with many advocates questioning the basis for the claims of the SCO Group.

"A court win for SCO, Linux fans feared, could bring its growth to a grinding halt." Again, while there have been some who have speculated this, I think it is inappropriate to put it in the context you have chosen. There are, for instance, many Linux advocates who have stated that they want the SCO Group to specify their infringement claims so that the offending code can be removed to end the infringement. The notion that a win for SCO spells the end of Linux is not one that originates within the Linux community, and should certainly not be stated as though it is an accepted fact.

"And so, SCO became one of the most vilified companies in the technology industry." The SCO Group certainly will not win any popularity contests with advocates of open source software, and there have been a lot of criticisms leveled against them, but stating that they are vilified conveys the notion that it is somehow not justified. I find this sentence to be gratuitous and irrelevant to the article in general. It does not do anything to inform your readers, but rather inspires them to consider the SCO Group somewhat of a victim and the open source community somewhat of a bully. I expect better from a column labeled as "News Analysis".

It's really rather unfortunate that you started the article with such a poor footing, because the rest of the piece is very good. If not for the overdramatization in the opening and the paragraph I've referenced above, I would recommend your article to friends and associates wanting to know more about the SCO v. IBM lawsuit.

Re:Whoa

[blippy]

Or how about the case of Marconi, in the UK. It was run successfully by Lord Weinstock for years. The company had a large cash balance, but he was ousted by City-friendly management who then went on a high-tech spending spree in the late 90's. And we all know what happened to the tech industry come the turn of the century.

Result? The whole company gets flushed down the toilet, shareholders loose money, and normal employees loose their jobs. The directors, who's decisions led to this disaster in the first place, walk away with Big Cash Prizes.

Ugly face of capitalism, or what?