Posted on 11/19/2003 1:20:40 PM PST by stainlessbanner
SCO will turn its sights on Novell once the latter has completed its $210m acquisition of SuSE, with a claim that Novell signed a non-competition clause when it sold SCO the rights to Unix in 1995.
Darl McBride, chief executive of SCO, commented: "When SCO bought Unix from Novell there was clear non-compete language in the contract to prevent Novell from competing against us.
"When the Novell/SuSE deal is completed then we may have to enforce that non-compete agreement."
Any Linux distribution marketed by Novell would put the firm in breach of the non-compete clause, which stops it from competing directly with SCO's Unix-on-Intel business, according to SCO.
Novell has hit back at the threats, arguing that SCO's characterisation of the agreement has been inaccurate.
"There is no non-compete provision in those contracts, and the pending acquisition of SuSE Linux does not violate any agreement between Novell and SCO," the company said in a statement.
SCO plans to contact Novell to discuss the non-competition clauses once the SuSE deal has gone through. It said that although Novell can develop software products that work with an operating system, it cannot enter the operating system market.
"This is something that Novell will have to work out with SCO if the acquisition goes through and they continue to develop Linux," added Stowell.
Sounds fishy to me, considering Novell already had DOS versions out there and licensed. Maybe that was the poison pill Novell slipped into the agreement?
From the Register:
SCO admits: Linux jihad is destroying our business
SCO admits: Linux jihad is destroying our business
By Andrew Orlowski in San Francisco
Posted: 18/11/2003 at 10:26 GMT
By law, companies must provide apocalyptic forward-looking scenarios in their SEC filings. They need to show they've thought of everything, to fend off potential class action suits just in case the sky really does fall in.
But in a filing yesterday the SCO Group gave a strong hint that while it anticipates riches from IP licenses, its current business is falling apart. Deeply embedded in the risks portion of the filing is this statement:
"We are informed that participants in the Linux industry have attempted to influence participants in the markets in which we sell our products to reduce or eliminate the amount of our products and services that they purchase. They have been somewhat successful in those efforts and similar efforts and success will likely continue. There is also a risk that the assertion of our intellectual property rights will be negatively viewed by participants in our marketplace and we may lose support from such participants. Any of the foregoing could adversely affect our position in the marketplace and our results of operations. "
Which boils down to two admissions. SCO has already lost business from its loyal customer base. And it expects to lose more.
Much of SCO's channel remained loyal to the business through thick and thin: although it's hard to imagine now, the Michels' was a socially conscious company. SCO was a channel player and retained good relations with OEMs ranging from DG to IBM. SCO's customers in retail and distribution fended off the great Windows assault of the mid-90s and the ancient OpenServer terminals you could see in almost every retail store on a British high street were not going to be surrendered lightly. But patience has at last worn thin. Where Microsoft's slick marketing failed, SCO's own jihad against Linux has succeeded: in scouring its customer's loyalty.
Doug Michels was never quite comfortable with the idea of Linux, blasting "punk young kids" (from Norway), and Caldera's Ransom Love - who has now departed and disowned the inheritors' current strategy - was never completely comfortable with the GPL. But Ransom's strategy of working with the channel, trusting them enough to migrate to Linux at their own pace, certainly looks a wise strategy now. (Certainly wiser than we thought at the time.)
SCO has a conference call with showman lawyer David Boies later this morning, Pacific Time. Boies is working for his supper, and there's some interesting speculation at Groklaw as to whether the latest batch of equity financing matches the near-$9 million the SCO Group will have burned through in legal fees.
And the million dollar legal team have filed another motion blocking Red Hat from calling its bluff. We don't want to read too much into the fact that the usually very forthcoming SCO folks declined to answer our questions today, but pointed us to the conference call. ®
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