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SCO Blames Linux For Bankruptcy Filing
Stony Stevenson writes "SCO Group CEO Darl McBride is now claiming that competition from Linux was behind the company's filing of Chapter 11 bankruptcy. 'In a court filing in support of SCO's bankruptcy petition, McBride noted that SCO's sales of Unix-based products "have been declining over the past several years." The slump, McBride said, "has been primarily attributable to significant competition from alternative operating systems, including Linux." McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix.""
Okay, I'll grant that competition from Linux distributors probably has taken business away from their Unix offerings. (Not that there's a problem with that, it's just the way markets work.) Of course, I'm sure their "we'll sue our customers!" antics didn't help, as the distributors behind such Unix varieties as Solaris, AIX, HP-UX etc. don't seem to be in quite such dire straits.
But let's not forget that a few years back, this SCO was known as Caldera. They were a Linux distributor. They were a founding partner in UnitedLinux. Then they bought Unix -- well, they bought something -- and changed their name to sound like the old SCO (Santa Cruz Operation), and refocused their business on Unix and lawsuits.
Anyone want to bet that if they'd stuck with Caldera Linux as their primary business, they'd be doing a lot better today?
To pull out an old analogy, it's like they started out as an automobile company, and then decided to switch to the buggy-whip business -- and now they're blaming the automobile companies for their business failures.
I fail to see the part of law where he's guaranteed to have a business model that works no matter what may compete with him.
...everyone but himself. What an ego.
The simple truth is that interstellar distances will not fit into the human imagination
- Douglas Adams
Since when have Microsoft been distributing Linux? I suspect that Mr. McBride is mistaken or perhaps this is simply a despirate grab at anyone who has money. (Note he did not go after Ubuntu, etc. - only "deep pockets")
STILL stiff neck and scheming up until the end.
lawyers of this company should be hanged in order to prevent more exploits in u.s. legal system.
Read radical news here
I, horse-and-buggy manufacturer, am being put out of business by those damn dirty car manufacturers!
So
Damn Microsoft and their support of Linux!
...while I laugh maniacally.
I suppose that's why they pay the Darl McBride the big bucks -- nothing gets by him.
The incredible Darl in action! Does anyone worry his next job will be working for their company?
Seems the logical approach would be for them to develop Unix and market it aggressively in return, rather than count on hitting the jackpot through the Lawsuit Lottery.
Seems they should have learned something from this example, but it does seem to strike everyone that there really never was an interest in growing the Unix market. It was all about suing IBM and other Linux distro makers.
In Other News: Br'er Rabbit informs us he's certain he can defeat the Tar-Baby if he could just get one foot free long enough to take another kick at it.
A feeling of having made the same mistake before: Deja Foobar
corporate cop-out speak:
McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix."
We would like to blame other entities for our inability to make a quality product that can compete in a competative marketplace. Simple put they are responsible for our incompetance.
Cause -> Effect.
~Sticky
/Just a thought, just a thought.
This is as stupid as horse drawn buggy makers blaming automobile makers for going out of business. SGI didnt adjust. They went poof. IBM adjusted well to linux and is reaping benefits are oracle and other companies. SCO could have done well with linux by shifting an existing customer base and applications over a long time ago.
Contrary to popular belief, Unix is user friendly. It just happens to be particular about who it makes friends with.
Wasn't the reason why SCO started suing everyone who was using Linux due to their assertion that the code in Linux was "stolen" from SCO Unix? So now they're claiming that competition from Linux (now that the courts see that the code was not, after all, stolen from them) is forcing them into Chapter Eleven?
And their assertions of this poverty are not due to the enormous amounts they have paid lawyers to prosecute ostensibly innocent companies?!
From now on, when I think of the term "pinhead" I'll think of the people at the soon-to-become-defunct SCO.
Gods don't kill people, people with gods kill people.
It was the public debacle, wild accusations, circular logic, legal threats, loss of face, change of business model from products and services to litigation based, etc. that caused this. Not to mention an outrageously overpriced and stale product line. Call me a dreamer...
As best I can tell, and it's certified http://docs.sun.com/app/docs/doc/802-1953/6i5uv2sif. I'll bet HP-UX and AIX are too. So is Daryl's claim t that his Unix isn't as marketable as other people's Unixes??
My favorites:
As a result of both the Court's August 10, 2007 ruling and our entry into Chapter 11, there is substantial doubt about our ability to continue as a going concern.and:
Revenue from the UNIX business decreased by $2,704,000, or 37%, for the three months ended July 31, 2007 compared to the three months ended July 31, 2006 and revenue from the UNIX business decreased by $5,103,000, or 23%, for the nine months ended July 31, 2007 compared to the nine months ended July 31, 2006.and:
Revenue from our SCOsource business decreased from $31,000 for the three months ended July 31, 2006 to $0 for the three months ended July 31, 2007. Revenue also decreased from $95,000 for the nine months ended July 31, 2006 to $23,000 for the nine months ended July 31, 2007.Ouch. To their credit (heh, I are teh funny), they managed to only lose $4.6M during that 9-month period, down from $12.9M a year earlier. Unfortunately, it looks like they're also out of things to cut.
Dewey, what part of this looks like authorities should be involved?
So, reverting to the original argument, I suspect that McBride is not stupid, and that the whole thing is indeed a sock puppet. However, as a scam it is probably too arcane to be explained in a fraud trial. Expect McBride to turn up in a Microsoft advert before too long, explaining that it is the fate of all Linux companies to go bankrupt, so best stick with Windows.
Pining for the fjords
You dropped your Linux support, now you're complaining that Linux is beating you? Would that not be akin to trading your ticket from a steam transport for a luxury suite on the Titanic?
Karma Whoring for Fun and Profit.
HP-UX and Solaris comply with the Single UNIX Specification and are thusly properly called Unix.
Darl, YOU who chose to get rid of the Caldera Linux distribution after you were hired in late June 2002. Then, you spit in the face of the community that made your company rich and took on the Nazgul.
You, not your competitors, are the reason why SCO is the joke of the IT industry.
Indeed. And what's wrong with that? They filed for chapter 11, so now they naturally have to explain why. Competition that they cannot beat is the reason. The real one. What's wrong with little Darl saying that, other than that it probably is the first accurate business related statement coming out of his mouth in years and that he should have said it a long time ago?
I truely don't understand why you guys are screaming so much about this one. What McBride said is true amd he has to say it: Linux is the thing that ruined their business. It was doing that back in 2003 already. The fact that SCO used the dirty method they did to try to escape from the inevitable, does not change the basic facts. Get over it. You should all be happy, for $YOUR_DEITY_HERE's sake! So stop wasting time on such blahblah and get back to work, making Linux even better. SCO is history.
Linux user since early January 1992.
When there are ice storms in South Texas (a very rare event), me and a couple of buddies like to get some lawn chairs and a cooler and go sit at the end of an off-ramp of a freeway and watch people freakout while going >5mph and skidding uncontrollably. Everyone knows they are not suppose to be out, but there they are wrecking their cars anyway. To bad there is nothing like that for the SCO board room.
The game.
I fail to see the part of law where he's guaranteed to have a business model that works no matter what may compete with him.
The folks in the music and movie industries have done a pretty good job of making the law work that way.
Read the EFF's Fair Use FAQ
He gambled that, by suing for their "stolen code" that was in Linux, he would either get someone to buck up or get IBM, Novel, etc. to buy them up. Maybe he was even hoping Bill Gates would make an offer, so that he could kill Linux.
The only problem was, no one rolled over and played dead, depriving Darl of a buyout and golden parachute, or a "Linux Lottery Lawsuit Goldmine". (TM)
Maybe, Darl, you'd have better luck taking your paycheck out to the local riverboat.....
HexaByte - he's a square and a half!
Thus, . . . even if you accept that competition from Linux has hurt them, what really cooked their goose was suing Novell and, thus, forcing Novell to counter-sue. (Once SCO sued Novell, if Novell hadn't countered with the demand for payment of owed royalties, they might have been permanently barred from suing SCO for that $20M at a later date).
Of course, in their bankruptcy filings, SCO doesn't acknowledge that they owe Novell anything ... presumably under the premise that nothing is owing until the judge declares so in the trial (that is now being held in limbo by the Chapter 11 request). The problem that SCO may have, however, is that -- until, and unless Novell's royalties are declared (or acknowledged) owing, SCO is actually solvent, which means that the bankruptcy court may actually deny their request to go into chapter 11.
On the other hand, admitting that they owe all of this money to SCO would defeat the probable purpose of the filing -- which appears to be keeping Novell off of the list of top creditors. (I'm not going to link to groklaw, here, because their servers are SOOO snowed under by all this sudden attention -- and that just after they upgraded!).
The reason why SCO probably fears Novell being on their list of top creditors is that Novell would then lead a board of creditors which would have an incredibly wide-ranging ability to look into the recent actions of SCO from the inside -- and given how much SCO has been dancing to prevent certain disclosures in court, I expect that they'll be very unhappy to see Novell lawyers walking into the office to pull that very same information out of SCO's files in person.
And then there's the question of how much 'encouragement' Microsoft provided for the lawsuit against Linux in the first place.
Yeppers. I expect that there's gonna be a whole lot of hand-wringing in Utah over the next week or so... possibly even for over the next couple of years.
Sometimes boldness is in fashion. Sometimes only the brave will be bold.
Furthermore, McBride also noted, "These alternate distributors neglect to sue their customers, a service which we provide for our own customers, and thus they are able to undercut our price of $699 per customer. Despite making a concerted effort to protect our intellectual property through the legal system, IBM has failed to buy us out, so the expected funds did not materialize which had been earmarked for expansion plans for my summer cottage --I mean, er, corporate conference facilities.
"We expect our recovery to be delayed somewhat while we initiate the appeals procedure. At that point, we anticipate a healthy rebound, as our business partner tells one of those investment firms to give us more money.
"Even though shares of our stock cost less than an order of French fries at McDonald's, we want to allay any concerns about being delisted for having a low price. Our accountants have said
404555974007725459910684486621289147856453481154 in hex is "You sank my Battleship?"
[GPG key in journal]
Maybe you're dead because you sued your own partners and customers. Who cares? In your fantasy world, you're dead because you couldn't compete. Fine.
Just stay dead. The world doesn't even owe you a eulogy.
Done with slashdot, done with nerds, getting a life.
Novell already sent five heavy-hitters from Morrison and Foerster, the leading bankruptcy law firm, to Delaware to present their side of the SCO bankruptcy. SCO originally wanted to keep paying their lawyers for their various pre-existing lawsuits during bankruptcy. But they didn't even try to convince the bankruptcy judge of that in court today. So that legal money drain stops. Novell indicated they're going to file a motion to restart their lawsuit (it's just stayed temporarily after the bankruptcy filing), and on October 5, Novell gets to argue that their financial claim preempts most of the other creditors. SCO was just supposed to pass royalties through to Novell, not keep them. Judge Kimball agreed, and put that in his summary judgment order last month, so Novell will probably win that one.
Meanwhile, SCO stock is now at $0.18, down 99% from the peak after SCO sued IBM.
He did, in fact, claim that SCO's downfall was due to the natural market forces and the company's inability to compete with other Unix vendors. His claim, actually, doesn't seem to make too much of a boogy man of the competition... he didn't say they sold child porn... he just said they were provding alternative which the market place prefered.
The reason he is being this (almost) honest is that he now needs to downplay the fact that SCO completely lost their ability to gain new business because of the lawsuits. Without even mentioning whether the lawsuit has merit, the rule of the market place is if you can compete you compete, if you can't compete you go away or sue (see Sun Tzu's "...if the enemy is weaker than you fight him; if he is equally matched, irritate him; if he is stronger evade him..."). Suing, of course, is meant to be the irritating distraction.
So the market place came to see the company as admitting defeat because of the lawsuits. This is what he trying to divert attention from. And everyone here seems to be playing his hand.
Any guest worker system is indistinguishable from indentured servitude.
Linux was a competitor But SCO failed to Adapt in time to face the competition they just tried to kill it. This is often the effect when someone first sees a threat they try to get rid of it. Linux by its very nature is much harder to get rid of then other competitors because it wasn't centralized. Attacking Linux is also attacking potential future customers. If SCO did nothing they may still be alive today like Sun and HP. They could have made tons of money from Linux Fallout. Those companies that tried Linux and realized it didn't fit their company (Yes they do exist Linux is not the perfect do all for everything OS). They could have competed more with Sun and HP for business. A Fully Commercially Supported Unix that Runs on your platform. And is not treated like the ugly step child like Solaris X86. There wireless technology they just started getting involved into. They had potential but it wasn't Linux that killed SCO. Is was SCO that killed SCO they abused future customers, they sued potential allies, welcomed other competitors, Lied to the public, wasted Taxpayer money, picked on the biggest strongest company it could find. In short they did everything wrong, a perfect example on what not to do.
If something is so important that you feel the need to post it on the internet... It probably isn't that important.
SCO (originally, anyways) was in the business of selling UNIX systems - which is a niche market. And that niche is pretty well defined. People like us /.ers fill that niche. Ideally, we're the people The Suits ask whenever they say "we need a solution to this problem."
By attacking Linux, they offended pretty much their entire target market. Nobody here would recommend SCO for anything, and last I checked our user ID numbers were over a million.
That is some seriously monstrous bad PR to try to get over.
Of course, all this assumes that Darl actually wanted to run a software company in the first place. Maybe he doesn't care about SCO at all, and just makes these noises in the press because that's his job. It's equally likely that he's a paid assassin out to tarnish the reputation of open source, or even better yet put an end to open source in the business sector. See the Halloween X document for clarification. Link 1. Link 2.
Weaselmancer
rediculous.