SCO's Shell Game

By Frank Hayes

July 28, 2003 12:00 PM ET

Recommended

(5)

Digg

Twitter

Share/Email

Computerworld - Trying to make sense of The SCO Group's threat last week to sue any Linux user who doesn't buy a Unix license? Forget the threat. Instead, look at the announcement SCO made the following day -- the one in which SCO said it's now in the Web services business thanks to its acquisition of Vultus Inc.
And how did SCO buy Vultus? With newly issued SCO stock, of course -- stock whose price gets a boost every time the company makes yet another wild claim about who it will sue next.
Actually, the Vultus deal is a lot more complicated than that. You wouldn't know it from what SCO said last week, but SCO has finally found a way to make money -- literally.

See our continuing coverage of SCO's Linux Battle.

View SCO coverage.

No, not from its attempts to sell Unix licenses to Linux vendors and users. Since January, when SCO started trying to get Linux types to cough up some cash, the company has sued IBM, sent threatening letters to nearly 1,500 big companies, tried to revoke IBM's license to sell Unix and threatened darkly that if someone didn't start buying Unix licenses soon, it would sue Linus Torvalds. None of that seems to have sold many Unix licenses.
But every time SCO makes a new, wilder set of legal threats, speculators bid up the price of SCO stock - starting in March, with the IBM lawsuit, then in May, when the threatening letters were sent, then again in June, when SCO tried to make IBM users pull the plug, and again last week. SCO's stock price is now about 10 times what it was six months ago.
Pretty impressive, eh? Especially for a company with no serious hope of getting cash flow from any of these threats for years.
None of the threats make legal sense. If they did, SCO would be able to get an injunction to shut down Linux users. In practice, SCO hasn't even been able to get an injunction against IBM and won't get a court hearing on its request to do that until 2005.
Meanwhile, a German court told SCO in June that it must stop threatening Linux users. And an Australian government agency is looking into charges that SCO is essentially running a shakedown racket by claiming that Linux users must buy a license they don't actually need.
And SCO's tactics don't make business sense, either. SCO is a software company that has slashed its R&D budget, alienated its customers

Recommend Digg Twitter ShareThis

Email Print Send Feedback Reprints

Jump to comments

Linux

Additional Resources

Xerox

Win a color printer!

By using solid ink technology only from Xerox, you could save up to 65% by printing color for the cost of black and white. Enter for a chance to WIN a PhaserTM 8860 network color printer!

Microsoft

Upgrade to Internet Explorer 8 today.

Save time and mitigate security risk. Deploy it now.

Sybase

NEXT-GENERATION MOBILITY PLATFORMS

In this white paper, IDC analyzes the role of next-generation mobile enterprise platforms as organizations seek a more strategic deployment of mobile solutions.

Learn the important issues you must consider before starting your next mobility initiative. Get your mobility white paper from IDC now, compliments of Sybase.

White Papers & Webcasts

Informatica 9 Launch: Transform your Business. Transform your world.

LIVE Nov 10, 2009 12:00 PM ET

Architecting Business Intelligence Applications for Change: The Open Solution

LIVE Nov 12, 2009 02:00 PM ET

Forrester Consulting - Optimizing Users and Applications in a Mobile World
Learn how to successfully deploy a WAN optimization solution that is specifically tuned for a mobile environment!

IDC Webcast: Linux Adoption in a Global Recession
Access this webcast, compliments of Novell and HP, for a limited time only!

Faster, Cheaper and Easier to Maintain
Can you afford not to upgrade your servers to today's advanced, energy-efficient technologies?

Top to Bottom Performance Management Excellence at the City of Chicago
View now.

The State of PCI DSS Compliance at Organizations Today
Download this resource today!

Effectively Implementing Datacenter Automation
Effectively select and deploy the best datacenter automation solution today!

IDC Research Report: The Business Value of Consolidating on Energy-Efficient Servers
Download this Resource Now!

Aligning IT to Business: The Rising Importance of Application Delivery Networks
Application Delivery Networking (ADN) will play a vital role in helping enterprises incorporate strategic technologies to achieve business initiatives.

HP Technology Guide for Scalable Business Solutions
Download This Resource Now!

Strategies for Driving Down IT Support Costs with Lite ITIL Practices
View this now!

All White Papers | All Webcasts