Posted on 06/10/2004 9:54:20 PM PDT by Ernest_at_the_Beach
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| SCO posts loss vs profit; revenue down 52 pct Thu Jun 10, 2004 01:29 PM ET SEATTLE, June 10 (Reuters) - SCO Group Inc. (SCOX.O: Quote, Profile, Research) , the software developer suing to collect money from users of the Linux operating system, on Thursday reported a quarterly loss versus a profit as revenue fell 52 percent. Lindon, Utah-based SCO, which claims that parts of the Unix software code it owns are used in the free Linux operating system, posted a net loss of $15 million, or $1.06 per share, in its fiscal second quarter versus net income of $4,5 million, or 33 cents per share, a year earlier. Revenue fell to $10.1 million in the three months ended April 30 from $21.4 million a year earlier. SCO sued International Business Machine Corp. (IBM.N: Quote, Profile, Research) last year, accusing the world's largest computer company of violating its rights by putting parts of Unix into Linux, which can be copied and modified free of charge. SCO is also arguing that corporate users who have adopted Linux to cut information technology costs should now pay to use the system. SCO's main costs are associated with its legal bills, as well as charges it incurred to buy out one of its main investors, BayStar Capital. |
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GOOD RIDDANCE!"
Latest is supposedly that they'll report those profits in Q3. Don't start celebrating just yet on this front.
Now on the loss in the Novell case, that's a reason to celebrate. It could also be used as evidence for Red Hat to get its suit against SCO going.
Wow, a reasonable post by Nick Danger on the subject. Amazing since something like this is usually his cue to come dance on their grave only to be proven wrong again. This time, looks like he got it right. You can only be wrong so many times before the law of averages starts working in your favor, I suppose.
The extent to which the SCO Group has gambled its future on legal battles was made clear yesterday when the Unix vendor announced a $15 million loss. Overall revenue had halved since the previous quarter to just $10.1 million.
Dryly stating the facts, the company said the revenue drop was "primarily the result of a lack of SCOsource licensing revenue". In fact, there had been an enormous 99 percent drop in licensing revenue and, somewhat ironically, the reason for it is SCO's crusade to be recognised as the holder of copyright within the open source Linux operating system.
In short, SCO has been left out in the cold. It is punching well above its weight by suing not only IBM but also Red Hat and Daimler Chrysler, among others. It is also embroiled in a battle with Novell. And all over a tenous claim that it owns the right to some code in Linux. IBM disputes that any such code exists in Linux. Novell disputes that SCO even owns the copyright to the code in the first place.
When faced with two IT giants putting a huge question mark over SCO's code claims, which company in its right mind would pay that company for the right to use such code? The answer has come back starkly: none.
"The largest thing we hear from our potential customers that is causing hesitation are the claims being made by IBM that we don't hold these Unix copyrights, which of course we think are false," said SCO's chief financial officer Bert Young said. "That's clearly the issue."
That however is where Young and SCO's head Darl McBride leave reality alone and continue with their evangelistic pronouncements which are what have put the company in its sticky situation in the first place.
Young swears blind that a 99 percent fall is nothing out of the ordinary. "This is a new thing to sell an IP indemnification license," he said. "It's going to be very cyclical. It's going to be up, it's going to be down." He promises everyone that it will all be fine soon. SCO, he claims, has "many, many deals in our pipeline, people we're in active conversations with". They are all going to be buying licensing off SCO, he says. Except last time SCO claimed it had sold a range of licences, half of them went public to say they had done no such thing.
SCO has cried wolf far too many times to be taken seriously anymore.
But still the company can't stop itself from issuing threats. "If they're willfully not buying licences, the price will be a horrific price," said Young. Why? Because of all the penalties that SCO will add when it has won all its lawsuits. "They run a huge risk. What they're looking at right now is a bet and that bet is going to get more expensive." But every week, the horse is looking more of an outsider.
McBride is suffering even worse delusions. How can he say that SCO's second-quarter revenue was "consistent with company expectations", and expect anyone to believe him? He doesn't even recognise that his instinctive reaction to sue anyone that says boo is making it increasingly difficult for SCO to be taken seriously.
The reason for the "consistent" results on Planet McBride are the significant expenses for the impairment of goodwill and intangibles and for the recent exchange of its Series A-1 Convertible Preferred Stock. That stock conversion incidentally was because one of SCO's two main investors - Baystar - insisted on pulling out of the deal, claiming that SCO has misled it. The other investor, the Royal Bank of Canada, had already pulled out - at a significant loss.
But McBride goes on: "Both of these charges negatively impacted our second-quarter results. As the company looks forward to the last two quarters of fiscal year 2004, we are committed to increasing shareholder value through profitable operations and increasing cash flow from our Unix division as well as remaining focused on our intellectual property lawsuits and licensing strategies."
SCO has put all it has on a horse that is already trailing the pack by a furlong halfway through the race. But like a desperate punter, it still believes there is enough time for a late spurt. Instead we are likely to witness the company being thrown out the paddock while it stares down bemused at its betting slip.
Additional reporting by Todd R. Weiss, Computerworld
"Wow, a reasonable post by Nick Danger on the subject. Amazing since something like this is usually his cue to come dance on their grave only to be proven wrong again. This time, looks like he got it right. You can only be wrong so many times before the law of averages starts working in your favor, I suppose."
Golden Eagle disagrees with your analysis = "proven wrong."
Gotcha.
Eagle, can you point out the infringing lines of Linux code?
No? Well, don't feel too bad.
Neither can SCO.
UNIX was invented by Ken Thompson and Dennis Ritchie at Bell Labs (ATT) back in the late 60s, after Bell pulled out of the MULTICS project. But since Bell was THE phone company back then, they weren't allowed to sell operating systems. So they let universities use it for free.
Lots of people started adding code to the base, so there ended up a lot of versions: the original System V (ATT), BSD, Xenix, OSF (Digital UNIX), AIX (IBM), HP-UX, SunOS, Solaris, IRIX, SCO UNIX, UNIX WARE. And many more versions than this short list. In other words, a complex, convoluted history with much confusion as to exactly who owns what code.
At one point Novel bought the copyright of System V from ATT. Later Novel sold it to SCO. IBM made their own version, AIX, by adding code to System V. SCO now claims that any code added to System V belongs to SCO, even if they did't write it. IBM claims that IBM owns their additions exclusively and can therefore open source their code for Linux.
I really don't know who owns what, so it will be interesting to see how this case unfolds in court.
Later Novel sold it to SCO.
This is the history of UNIX--one dispute after the other. ATT sued the University of California, Berkeley, over their version BSD which stated out with the original ATT code. During the course of this case, it was discovered that ATT had lifted large parts of BSD code and incorporated them back into System V without acknowledgement. Oooops.
The case was settled behind closed doors. Nobody is allowed to reveal the final settlement. How is that for clarity of ownership?
Looks like the judge delayed the case six more months to November 2005. If IBM would just hand over the evidence already we could finally get this thing started.
"Why do you act so surprised that SCO is financially suffering? Why do you think they are suing in the first place? Because business was booming? No, they are being squished like a bug by IBM and their partners, who backstabbed them and are now trying to take their property in the process. Remind you of any other big bad computer company, you so constantly complain about? Does me."
How is IBM squishing SCO? SCO sued IBM!!!!
"Looks like the judge delayed the case six more months to November 2005. If IBM would just hand over the evidence already we could finally get this thing started."
It's SCO that never handed over the evidence, even when ordered to by a Judge. The source to Linux is publicly available, and SCO hasn't said which lines are infringing. You're spinning.
This is SUDDENLY in dispute. Everyone went for years knowing (thinking according to Novell now) Novell had sold the rights to Unix to SCO. It was the on the front page of every tech weekly. Maybe they legally didn't sell it, but they sure took tens of millions from SCO in the process and left everyone thinking that's what had taken place. Guess it was all just a trick.
Obviously. For breaking their contracts and partnerships, and going with a competing product instead. Which is why they're losing so much money right now, duhhh.
The source to Linux is publicly available, and SCO hasn't said which lines are infringing. You're spinning.
ROFL, you're the one spinning. So what if Linux is open, AIX is not. And that's what IBM is hiding. Either you already knew that, or you're just a blind puppet for your cause.
Just more of the "eternal unix wars", which is how linux was born in the first place. I just don't like the way IBM did SCO. SCO was the original Unix for Intel and a closed source product is better for the US economy and security. IBM could have partnered with Apple and SCO and built the US economy more, and still had plenty of *nix flavors available. Now we have this:
http://www.distrowatch.com/
Part 1, SCO has withdrawn part of their suit about, and the rest is open to interpretation - though the guys who actually sold SCO certain rights to UNIX agree with IBM, not SCO's position.
2, IBM owns AIX, not SCO. SCO can't even prove they own UNIX... or that SYSV code is in Linux.
Says who? I saw reports of exactly the opposite.
IBM owns AIX, not SCO. SCO can't even prove they own UNIX...
They claim they are being swindled out of it, wouldn't be the first time IBM's been accused of that. And Novell is doing what, playing peek a boo with whether they sold Unix or not? Looks awful fishy, no telling who to believe.
Because they sue people. It's what all the Canopy Group companies do. Back when this one was called Caldera, they sued Microsoft and got over $100 million. Now they're suing IBM. And Novell. And DaimlerChrysler. And Autozone.
Center 7, another Canopy Group company, just got $40 million out of Computer Associates in another lawsuit. Instead of making products, these guys sue people. It's what they do.
That would be a public service if IBM can pull it off. Think of all the BS lawsuits that will be avoided if IBM can put the Canopy Group out of business.
That's a lie, and what's worse, you know it's a lie because you've been caught in this one before. This SCO is not the same company that had a partnership with IBM that was cancelled. This company bought the business after the program had been cancelled. They knew all about the cancellation when they bought the business.
What property? They've been ordered by the judge twice to tell the court precisely what property it is that IBM supposedly took. They can't do it.
Your formulation would steer the reader that you are trying to mislead into thinking that IBM has refused to give SCO something that SCO is entitled to. You probably know that isn't case; SCO got what the judge said they could have. SCO asked for the Moon, but the judge said no. They are unhappy with this. Now they are asking for more. Let's see if the judge gives it to them. In the meantime, don't try to fool people into thinking that IBM is withholding something. That would be disingenuous of you.
Doesn't matter. Whatever SCO paid, they didn't buy the copyrights. That's what the contract says, that's what the judge says.
Any more questions?
Which they deserved. Like you were defending Microsoft at the time anyway, Mr. Hypocrite.
That's a lie, and what's worse, you know it's a lie because you've been caught in this one before.
Really, where? Now we'll see who's lying. Again.
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