Reality and SCO have not, of late, been dancing arm in arm. But there are signs that even if they're not in the All-Utah Jitterbug finals, they've caught each other's eye across the floor. SCO is now well into a phase of wanting you to look at its new OpenServer 6 instead of its many lawsuits, which is a good sign for a company which should be selling software instead of serving writs. And controversial chief executive Darl McBride has moved on from his "If we lose, we're screwed" stance to "even if we lose we're in good shape, so let's not worry about that," by way of demonstrating his change of focus and new concentration on sustainable revenues.
It would certainly be nice to extend SCO the luxury of not worrying about those interminable lawsuits — it's got plenty of other things to think about. OpenServer 6, for example: it works perfectly well, but how on earth do you sell it against the behemoths of Windows, Linux, Solaris and so on? How do you keep developers on board when all the action's elsewhere? Even if SCO had never embarked on its wild penguin chase, there'd be lots to see and do on the road to sustainable growth.
But those lawsuits aren't ignorable. They're getting ugly. Not only is SCO not prevailing in its primary goal of getting IBM to say sorry for Project Monterey, it hasn't even proved ownership of the Unix rights it claims are being violated. Quite the opposite: in suing Novell by way of establishing those rights, SCO has provoked a counter-attack of chilling simplicity. The Unix rights you have are to sell licences and to keep 5 percent of the fee, says Novell. "You sold upwards of $25m (£14m) worth of Unix licences to Microsoft and Sun in 2003 and kept all the money," it says. "We've been asking this question for 18 months and you haven't answered: where's our 95 percent?"
For a company with cash reserves of about $11m, this is unwelcome. As is Novell's request to the courts for a preliminary injunction freezing that $11m, just in case it gets frittered away on lawyers' bills. If that gets agreed, then SCO is dead. Bang. Just like that. Forget about years in court arguing about invisible code stolen by invisible men: all the money goes away and the company stops.
SCO hasn't said much about this. There's not much to say — except that "if we lose, we're in good shape" doesn't begin to cover it. SCO's final dance with reality may not be to a tune of McBride's choice.
Talkback
Besides the end of SCO in some fire sale, there could be grounds for criminal or securities violations to be prosecuted. An agent spending the collections is guilty of embezzlement. Telling the SEC and investors that they had a lump of income of $25 million when it should have been only a few per cent of that may result in certain persons being severely punished. Post ENRON, we have the era of Sarbanes-Oxley which requires responsible officers to sign off on the financial statement. It will be interesting to read the SUN and MSFT licence agreements when they are entered in discovery. If they include licences for the old UNIX stuff that Novell claims then SCO is toast. Of course, some benefactor may magically appear like Baystar, but that is unlikely. Fool me once; shame on you. Fool me twice; shame on me.
Hmmm. What if the defendants in SCO's lawsuits decide to sue for malicious proscecution and frivilous lawsuits? How about Lanham Act violations? I would just love to see MS and Sun joined as defendants in that suit. SCO wouldn't even have to do it. A judge could do it on plaintiffs motion.
How much money did IBM spend on that suit so far? $100 mln? Don't they allow for triple damages?
I know it will take awhile, but I'm fairly certain that other collusive parties are going to feel SCO's pain.
Scott
Ah, but Lanham Act violations ARE part of the counterclaims in the IBM case, and the claims in the Red Hat case.