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Caldera

SCO Claims $15,300,000 From SCOsource 404

Hollins writes "Yesterday, SCO filed their latest 10-Q. In it, they claim over fifteen million dollars in revenue from their SCOsource initiative (mostly from Microsoft and Sun) with a decline in revenue from all other sources. A lot of interesting statements are in the 10-Q, including "The success of our SCOsource licensing initiative, at least initially, will depend to a great extent on the perceived strength of our intellectual property and contractual claims and our willingness to enforce our rights. Many, particularly those in the open source community, dispute the allegations of infringement that we have made"."
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SCO Claims $15,300,000 From SCOsource

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  • 10 Q (Score:5, Funny)

    by jeffkjo1 ( 663413 ) on Tuesday September 16, 2003 @09:10PM (#6981532) Homepage
    10 Q Darl McBrides IQ anyone?
  • by Incoherent07 ( 695470 ) on Tuesday September 16, 2003 @09:11PM (#6981540)
    Many, particularly those in the open source community, dispute the allegations of infringement that we have made".

    Duh. You just tried to charge for Linux.

  • of course (Score:3, Insightful)

    by Capt'n Hector ( 650760 ) on Tuesday September 16, 2003 @09:11PM (#6981541)
    Well that's to be expected of Microsoft; by undermining Linux, their monopoly become even more powerful, even if it means giving millions away.
    • Re:of course (Score:3, Interesting)

      by Tuqui ( 96668 )
      I put it in another thread but your comment fall just in the point.
      It looks that M$ is using their money not only directly in fiaSCO contracts. You can see what is happening with SCOX stock too here [weblogs.com]
    • Re:of course (Score:3, Insightful)

      by cbreaker ( 561297 )
      They can't buy Linux, so I'm sure they consider these expenditures along those same lines. Same objective: Kill the competition.

  • Slashdotted! (Score:4, Interesting)

    by darnok ( 650458 ) on Tuesday September 16, 2003 @09:11PM (#6981542)
    Surprise, surprise, ...

    Does it mention in any more detail how this licence revenue has come in? Aside from MS and Sun, who else has paid up?

    I'm particularly interested in the number of people who've signed up for the $699 "bargain rate" for Linux licences
    • Re:Slashdotted! (Score:5, Insightful)

      by kfg ( 145172 ) on Tuesday September 16, 2003 @09:55PM (#6981874)
      According to people who have actually tried it it isn't even possible to sign up for a user license, at any rate.

      No license is actually available.

      It's all a big dog and pony show (with fake dogs and ponies) and even SCO staff are puzzled and frustrated, particularly the sales staff who actually have to tell people to take a hike.

      Cute, huh?

      KFG
      • Re:Slashdotted! (Score:5, Interesting)

        by MuParadigm ( 687680 ) <jgabriel66@yahoo.com> on Tuesday September 16, 2003 @10:12PM (#6981998) Homepage Journal
        They run into three problems if they actually try to send out those invoices.

        A) The obvious fraud charge that everyone has already discussed.

        B) Anyone who receives one of those invoices might try to challenge SCO's copyrights. Given that the presiding judge ruled ATT was "unlikely" to prevail on their copyright claims in the BSD case, SCO does not want to put their copyrights to the test in court.

        C) Anyone receiving one of those invoices might ask for declaratory judgement, requiring SCO to shut up.

        It's less a dog and pony show than a strip tease. And I really *don't* want to imagine Darl naked.

        • by kfg ( 145172 ) on Tuesday September 16, 2003 @10:30PM (#6982116)
          B) Anyone who receives one of those invoices might try to challenge SCO's copyrights. Given that the presiding judge ruled ATT was "unlikely" to prevail on their copyright claims in the BSD case, SCO does not want to put their copyrights to the test in court.

          I keep pointing this one out, and being told I'm an idiot in various ways, but the fact of the matter is that UNIX code has already been judicially reviewed and the result of that review suggests that SCO's magic bag of intellectual property is, and always was, empty.

          That's why the only "trick" they've managed to pull out of it so far is a cheap and tawdry contractual disagreement.

          Even that one is bogus and unimplemented in the vast majority of actual installs.

          It's less a dog and pony show than a strip tease. And I really *don't* want to imagine Darl naked.

          "Haah. Ah'm SCO. This is my brother Darl and this is my other brother Darl. We're the McIdiots. Would you lahk us to strip fer yew?"

          "No? How about we eat a dead rat, or business plan, or OS, or somethin'?"

          "Okey-dokey. Just give us yer money then."

          KFG
          • by the_other_one ( 178565 ) * on Wednesday September 17, 2003 @12:52AM (#6983086) Homepage
            You have used "Mc" in your post.
            This is a violation of our Trademark.
            Our McLawyers will be contacting you shortly.

            McDonalds.
            Over 1000000 Sued!
      • by MuParadigm ( 687680 ) <jgabriel66@yahoo.com> on Tuesday September 16, 2003 @10:16PM (#6982017) Homepage Journal

        Clarification: It's like a strip tease in that they never show what they promise to.

  • by Zocalo ( 252965 ) on Tuesday September 16, 2003 @09:11PM (#6981546) Homepage
    ...is that if they lose their court case with IBM and people won't buy their licenses, then they are screwed? Great! Let's go to court!
  • Secret. (Score:5, Funny)

    by grub ( 11606 ) <slashdot@grub.net> on Tuesday September 16, 2003 @09:11PM (#6981547) Homepage Journal


    stolen SCO email:

    @@

    Darl,
    How do these numbers look? I spent 4 hours pulling them out of my ass.

    -Chris
    Microsoft bankroll to fight Linux:___$15,000,000.00
    Sun money to swat the SCO mosquito:_____$299,996.50
    Money Darl swiped from the coffee
    fund whilst no one was watching:______________$3.50
    --
    Total amount of cash extorted/raped:_$15,300,000.00
    @@

    Chris,

    That total looks great! Redo it without all the details
    then put it on the wires; I have a payment due on my
    Mercedes this Thursday.

    -Darl

    @@
    • Re:Secret. (Score:3, Funny)

      by Agent R ( 684654 )
      @@

      Darl,

      Uhhh.. SGI is knocking at our door.

      -Chris

      @@

      Chris,

      Can you take care of it? I am getting a new toupe to match the color of my Mercedes. And I'm expecting my shipment of Enlargo to be in by Thursday too.

      -Darl

      @@

    • Re:Secret. (Score:5, Funny)

      by Guppy06 ( 410832 ) on Tuesday September 16, 2003 @10:27PM (#6982100)
      "stolen SCO email:"

      Hi! How are you! I send you this file in order to have your advice!
    • Re:Secret. (Score:5, Funny)

      by Tellalian ( 451548 ) on Tuesday September 16, 2003 @10:35PM (#6982147)
      Microsoft bankroll to fight Linux:___$15,000,000.00
      Sun money to swat the SCO mosquito:_____$299,996.50
      Money Darl swiped from the coffee fund whilst no one was watching:______________$3.50
      Total amount of cash extorted/raped:_$15,300,000.00


      The look on SCO executive's faces when they learn their tactics have ultimately bankrupted them:

      Priceless
  • by Matey-O ( 518004 ) * <michaeljohnmiller@mSPAMsSPAMnSPAM.com> on Tuesday September 16, 2003 @09:12PM (#6981553) Homepage Journal
    Cooking the books is bad, m'kay?

  • Two companies (Score:5, Insightful)

    by sharlskdy ( 460886 ) <scottman.telus@net> on Tuesday September 16, 2003 @09:12PM (#6981554) Homepage
    It's clear that MS is exploring how to support their offensive on Linux, but why Sun? Same reason? I guess Solaris' greatest enemy is not MS anymore, but Linux.
    • Re:Two companies (Score:5, Insightful)

      by Anonymous Coward on Tuesday September 16, 2003 @09:17PM (#6981591)
      It's clear that MS is exploring how to support their offensive on Linux, but why Sun? Same reason? I guess Solaris' greatest enemy is not MS anymore, but Linux.

      They should definitely be worried. Sun has sat on it's ass for years riding it's reputation while stagnating. There is NOTHING interesting happening at Sun at this point. I don't wait with baited breath about a hardware announcement anymore or have hope that we'll see anything but 250MHz bumps in speed every 6 months or so if we're lucky. Sun is becoming irrelevent and they are their own worst enemy.

    • Re:Two companies (Score:3, Informative)

      The reason Sun pays up is that Solaris actually does contain SCO code.
    • Re:Two companies (Score:5, Interesting)

      by Greyfox ( 87712 ) on Tuesday September 16, 2003 @09:30PM (#6981689) Homepage Journal
      Sun's been making noises about being able to distribute the Linux kernel irrespective of the outcome of the IBM/SCO battle, if I read the news right. I assume it's to their advantage to imply that they're the only legal Linux distributor for as long as they can, so it'd be to their detriment for SCO to go bankrupt too soon. Once SCO goes under, they'll be back to having to compete head-to-head with IBM.

      They're taking a big risk of alienating the community that way. Personally I wouldn't play my cards that way given that a hefty hunk of the product offering (Mad hatter et al) coming up is open source based.

      • Re:Two companies (Score:5, Informative)

        by ultrabot ( 200914 ) on Wednesday September 17, 2003 @01:06AM (#6983144)
        Sun's been making noises about being able to distribute the Linux kernel irrespective of the outcome of the IBM/SCO battle, if I read the news right.

        You didn't read the news right. Sun has repeated several times that they indemnify Solaris customers, not Linux customers. Linux customers are on their own.
    • Re:Two companies (Score:5, Informative)

      by Monkelectric ( 546685 ) <slashdot@@@monkelectric...com> on Tuesday September 16, 2003 @10:05PM (#6981942)
      I've told this story a million times, but I'll tell it once more ... Sun is *VERY* scared of linux. I used to buy Sun equiptment fairly regularaly for the university I worked for, and out Sun rep flat out told us Sun was "very concerned" about Linux. Sun is very competitive with discounts as well, just use the word "Dell" in a sentence and Sun will offer you steep discounts (on overvalued hardware). Because at the end of the day, sun has to answer the question, "A 4 way sun box costs 40k, and a 4 way Dell costs 12k. What can sun do that Dell can't?" At one point Sun even offered us *free* (low end) servers to replace some Linux boxes we had. We politely declined.
      • Re:Two companies (Score:3, Informative)

        by sys$manager ( 25156 )
        What can sun do that Dell can't?

        High volume I/O
      • Re:Two companies (Score:5, Interesting)

        by zerocool^ ( 112121 ) on Wednesday September 17, 2003 @12:23AM (#6982936) Homepage Journal
        I just looked at it.

        Though I have no love for solaris, and I like budget options, I always defend sun hardware. Probably because I work on it on a daily basis (we use everything from IPC's to our quad proc ultra II at Netmar).

        The hardware is rock solid. I mean, you have to beat them with hammers to break them. The PROMS die before anything else goes bad, and that's just cause of the battery. And when the prom dies? Just boot it and make it set it's own mac address in the OS. The fact that we still use IPC's (as monitoring servers, rstat graph displayers, etc) is a testiment to how long they last.

        I just looked at the sun website. The machine you offer does indeed cost $40k, or close to it ($35k). However, make sure you see what's included in that. It's 4x Ultra SPARC III Cu 1.05 Ghz processors, EACH with 8MB of cache. On top of that, there's 32 256MB sticks of registered memory, 2 10k RPM 73GB discs, 2 Gigabit ethernet ports, and dual 1440 Watt power supplies. That's a beast of a machine.

        Oh, and wait, what's this?

        I configure a machine almost matching the specs. The difference here is the processors, which are 2.8 Ghz Xeons, but ONLY 2MB OF CACHE, and they're also only 32bit. Otherwise, the same. 8GB of ram, 2 10k rpm 73GB SCSI drives. Guess what? It cost $28,000.

        Between $28,000 for 32 bit procs with 2MB of cache, and $35,000 for 64 bit procs with 8MB of cache, I might go ahead and bump it up.

        I wish people would realize that sun is rock solid hardware and not that much more expensive.

        ~Will
        • Re:Two companies (Score:4, Interesting)

          by Monkelectric ( 546685 ) <slashdot@@@monkelectric...com> on Wednesday September 17, 2003 @01:43AM (#6983299)
          I wish people would realize that sun is rock solid hardware and not that much more expensive.

          I don't actually disagree with you :) Alot of people don't need rock solid though, and don't need to pay for it. At the university I worked at, we didn't need rock solid, but we could afford it. I'm not saying we ever bought a DELL server, we just threatened to to get Sun to lower their rediculous prices :) Negotiating with them always reminded me of the south park where cartman is selling fetuses, "oh jesus larry you're breaking my balls here." Sun tries to club you over the head with their *rediculous* list prices.

          Once after I negotiated a pretty good deal (104k for A fire V440 with 4 procs, 4 gigs of ram, 2.6 TB of storage, and a tape library), I told one of my coworkers how proud I was of myself for getting us almost 50% off the list, and he said the funniest thing I've ever heard, "You should have asked them to raise their prices so we could have gotten an even better discount."

          So anyways, I love suns, was a solaris admin for 2.5 years, and I dont really diasgree with you. Just saying the average business might not need all that horespower. In my entire time I had *one* sparc 10 give out that was ancient, other then that nare a hardware problem in 2.5 years.

    • Re:Two companies (Score:5, Insightful)

      by jellomizer ( 103300 ) on Tuesday September 16, 2003 @10:10PM (#6981976)
      Well Sun just hates IBM. IBM and Sun make similar products for a similar business. If SCO Wins it is a great loss to IBM. So Sun Makes out. If SCO Looses oh well at least they didn't bother Sun during the interim. either way Sun comes out smelling like roses. At this point Sun doesn't want to be bothered with legal stuff on their Linux Strategy. Although they support the open source model they are not bound to it. So if they have to pay to "Legally" own Linux and use it, so they will. Sun has enough problems and they probably cant take on the legal battle. And if it allows a pot shot at IBM at the same time then all the better.
    • Re:Two companies (Score:3, Informative)

      by Snoopy77 ( 229731 )
      Could both posters and moderators pleae RTFA. Sun's payment was to cover licensing 'clean up' issues with it's version of UNIX. It had nothing to do with Linux.

      It is however interesting that they have stock options.
      • Re:Two companies (Score:4, Interesting)

        by mec ( 14700 ) <mec@shout.net> on Wednesday September 17, 2003 @12:46AM (#6983061) Journal
        As you said -- and, more importantly, as the 10-Q for the quarter plus the 10-Q for laster quarter said -- Sun gets options to purchase 2% of SCO. That's more than a cleanup license. That is a strategic investment.

        Sun is helping desktop Linux a lot, specifically through Open Office. Sun is also attacking server Linux via its partnership with SCO. Sun is a Linux ally in cases where Linux competes with Sun's competitors, and a Linux foe in situations where Linux competes with Sun.
    • Re:Two companies (Score:5, Interesting)

      by ckd ( 72611 ) on Tuesday September 16, 2003 @11:01PM (#6982361) Homepage
      why Sun?

      Anti-AIX propaganda? They were sending out FUD emails to (among other people) a friend of mine saying "hey, we'll help you switch from AIX to Solaris, since we don't have any licensing problems"....

  • hoo boy... (Score:3, Interesting)

    by focitrixilous P ( 690813 ) on Tuesday September 16, 2003 @09:14PM (#6981567) Journal
    While our SCOsource initiative has already resulted in revenue of $15,530,000 during the last two quarters and we continue negotiations with other industry participants that we believe may lead to additional SCOsource license agreements, we are currently unable to predict the level or timing of future revenue from this source, if any.
    Allow me a guess.

    Zero. Microsoft might keep you afloat for now, but you are doomed to failure.

    • Don't count on it. Darl needs revenue from SCOSource for each of the next two quarters if he wants to get the big bonus. He'll find someone to keep them afloat, might be MS, might be someone else with an axe to grind wrt Linux.

      But after Darl gets that bonus? Yeah, zero.

  • by Dancin_Santa ( 265275 ) <DancinSanta@gmail.com> on Tuesday September 16, 2003 @09:15PM (#6981578) Journal
    The 10Q is known as the Chicken Little of financial documents precisely because of the warnings it lists in the forward looking statements.

    It wouldn't be too far fetched to see something like "In the event that a terrorist attack destroyed the databases containing proof of our IP claims, it is possible that we may not be able to meet our cash flow expectations"
    • by DDX_2002 ( 592881 ) on Tuesday September 16, 2003 @11:08PM (#6982405) Journal
      Well yeah, but the idea is, if terrorists did blow up SCO's servers, SCO would be like 'hey, don't say we never warned you' should the investors try to sue. Forget about tighter security on the server farm, SCO could legitimately say 'look people, we warned you, presumably the risk of terrorist attack was factored into the share price by the market. So @#$! off whining about it.'

      That's why form 10s have so many caveats and warnings.

      • by Galvatron ( 115029 ) * on Wednesday September 17, 2003 @02:36AM (#6983517)
        The entire point of this document is to get Darl & Co. out of hot water when the lawsuits start flying. When it becomes clear to the general public that the SCO claims were full of shit, and that the insiders cashed out during that period, shareholders will start suing, and the SEC may even launch an investigation. McBride will point to this 10Q and say "we warned you that our claims might not hold up in court, and we furthermore went on to warn you that if our claims did not hold up, SCOsource would stop making money, and we would have no more revenue."
  • by mrAgreeable ( 47829 ) * on Tuesday September 16, 2003 @09:16PM (#6981582)
    They claim $15,530,000 in revenue from SCOSource.

    They refer to having Sun and MS, and say "The two licensing agreements signed by us to date resulted in revenue of $8,250,000 during the April 30, 2003 quarter and $7,280,000 during the July 31, 2003 quarter."

    Meaning that SCOSource received no revenue whatsoever outside of those two. Hopefully it'll stay that way after they start sending invoices out.
    • by Black Parrot ( 19622 ) on Tuesday September 16, 2003 @09:26PM (#6981666)


      > Meaning that SCOSource received no revenue whatsoever outside of those two. Hopefully it'll stay that way after they start sending invoices out.

      Invoice? I thought they had sent me some commemorative toilet paper!

    • Maybe you didn't read the whole thing. it stated that $15,530,000 was generated in the last two quarters. So that means...

      $8,250,000 + $7,280,000 = $15,530,00
  • by SkArcher ( 676201 ) on Tuesday September 16, 2003 @09:16PM (#6981583) Journal
    We performed a valuation of our intangible assets as of October 31, 2002 in accordance with SFAS No. 142, "Goodwill and Other Intangible Assets" and determined that the intangible assets reported in the accompanying consolidated balance sheets are not impaired. Write-downs of intangible assets may be necessary if the future fair value of these assets is less than carrying value.


    So..... SCO goodwill anyone? C'mon, who's hiding all the SCO goodwill? Bill, what's that you are hiding behind your back there? Why do you have lots of goodwill towards SCO, Bill?
    • I dare say that SCO's goodwill has moved from the "asset" column to the "liability" column for the foreseeable future (i.e. until heatdeath of the universe).
  • "Many, particularly those in the open source community, dispute the allegations of infringement that we have made"

    One of the lovely aspects of government-mandated reports is that they're required to acknowledge the negative side of things, forcing the company to state the obvious truth - rather than the company line - from time to time.

  • by gmack ( 197796 ) <gmack.innerfire@net> on Tuesday September 16, 2003 @09:17PM (#6981590) Homepage Journal
    "caused by the worldwide economic slowdown, increased competition from other alternate operating platforms, and uncertainty from our recent Linux announcement. This impact was largely felt in our distribution channel in the Americas and Europe."

    That's interesting.. it indicates at least some customers have given that lawsuit as the reason for not using their products.
  • by mr_majestyk ( 671595 ) on Tuesday September 16, 2003 @09:18PM (#6981595)
    You just need the right business model, I guess!
  • by epiphani ( 254981 ) <epiphani@@@dal...net> on Tuesday September 16, 2003 @09:18PM (#6981601)
    ...with revenue of $15,530,000 from our SCOsource licensing initiative, have resulted in the first two profitable quarters in our history.

    They're profitable. First time ever. Its interesting that this licencing scheme brought them over the top. Does anyone have any numbers of how far they'd be in the red if it wasnt for this initiative? It doesnt seem to say in the article.

    But it does say this: ..."a decline in product revenue of $1,835,000 and a decline in services revenue of $774,000."

    So, if they werent profitable before, then a decline in product and service revenue should put them *far* into the red without the SCOSource thing.
    • Does anyone have any numbers of how far they'd be in the red if it wasn't for this initiative?

      Yes. Start here:

      The SCO Group Reports Third-Quarter Results [yahoo.com]

      For the quarter ended July 31, the whole company reported $20.1 million in revenue and $3.1 million in net income. The SCO Source division generated $7.3 million revenue and $5.6 million in gross margin. That means the products&services portion of SCO generated $12.8 million revenue and ($2.5 million) in net loss.

      I dug out numbers for the past

  • Everyone should NOT pay SCO. If nobody pays them, they go out of business. They have no money left.
  • And in the end... (Score:4, Insightful)

    by Stalus ( 646102 ) on Tuesday September 16, 2003 @09:20PM (#6981613)
    So assuming that SCO loses this court battle.. do they all get arrested for fraud if they don't return the money raised for license fees. I mean, they are essentially telling people to pay for something they don't own. I can claim that you have to pay me money to drink liquid, and I'm sure there are enough morons out there that would do it to give me a nice little income, but I thought that would put you behind bars.
  • by Zocalo ( 252965 ) on Tuesday September 16, 2003 @09:21PM (#6981618) Homepage
    It mentions the IBM court case and it mentions the Red Hat case. What happened to the German case that they lost pertaining to their defamation of Linux? The one that undermines their position in the IBM/Red Hat cases to the potential investors that will be reading this?

    Can someone familiar with the 10-Q requirements explain whether this omission is permissable (because it was brought in Germany?) or has SCO done something else naughty?

    • by cdrudge ( 68377 ) on Tuesday September 16, 2003 @09:41PM (#6981786) Homepage
      The SCO Group (SCOX) is the American company. The SCO Group GmbH is the German company. They share the same name, but a case brought up against one company is legally shielded from the other. That is the whole point of incorporating seperate companies.
      • by HarlanC ( 472074 )
        You are both wrong. The full 10-Q does discuss the German case. See below. A registrant must discuss all material litigation. It does not matter whether the litigation involves a subsidiary or the parent, so long as it is material to the entire enterprise.

        From the 10Q: "Several entities in Germany have obtained temporary restraining orders in Germany precluding SCO GmbH, the Company's German subsidiary, in substance, from making statements in Germany that disparage Linux, or entities involved in the L
  • by StandardCell ( 589682 ) on Tuesday September 16, 2003 @09:21PM (#6981623)
    "Many, particularly those in the open source community, dispute the allegations of infringement that we have made."

    Isn't this a bit like calling a nuclear war a "mild nuclear war"?
  • Sun is involved! (Score:4, Interesting)

    by raahul_da_man ( 469058 ) on Tuesday September 16, 2003 @09:23PM (#6981632)
    Sun has paid Sco a quarter million. Why on Earth is it helping bankroll an attempt to destroy Free Software?

    It's time to boycott Sun. It's about time it learned you can't bite the hand that feeeds you.

    Microsoft, of course, is no surprise. I'm slightly amazed they didn't give Sco more money.
    • by geekoid ( 135745 )
      what is MS liscensing from them?
      Perhaps Win2k containcs SCO code? that would explain a lot. ;)

      about 8 million dollars of what?
      thats well over 11000 liscenses at 699 a pop.
    • Re:Sun is involved! (Score:4, Interesting)

      by cyril3 ( 522783 ) on Tuesday September 16, 2003 @09:32PM (#6981711)
      Perhaps they paid for IP that SCO does in fact own. It may not relate to disputed Linux related IP. SCO does have other UNIX software that it has IP rights in and that it can licence, doesn't it? (That is a question ,by the way, not a statement)

    • They got 210,000 stock warrants, now worth about $3 mil, but only carried on the SCO books as $500,000. Is it really income if its equity?
    • Re:Sun is involved! (Score:4, Interesting)

      by LiquidCoooled ( 634315 ) on Tuesday September 16, 2003 @10:23PM (#6982073) Homepage Journal
      Sun paid a little more, AND microsoft ARE giving them more money:

      The license agreement with Sun provides for an additional $2,500,000 to be paid to us by November 2003. On July 31, 2003, Microsoft exercised an option to acquire expanded licensing rights. Upon delivery, we expect to recognize additional revenue related to this option.
    • Microsoft, of course, is no surprise. I'm slightly amazed they didn't give Sco more money.


      Because that would involve admitting to having a lot more linux installations than they could pass of as having to "study its weaknesses"... unless they were looking for a Beuwolf cluster of weaknesses

  • by whoever57 ( 658626 ) on Tuesday September 16, 2003 @09:23PM (#6981635) Journal
    Wow, so scosource.com [scosource.com] made $15M. That's not bad for a website that claims to be non-commercial!
  • Stock Prices (Score:4, Insightful)

    by brent_linux ( 460882 ) on Tuesday September 16, 2003 @09:26PM (#6981665) Homepage
    So this pretty much says they are leaking cash like a open wound leaks blood and that the only way they can make money is from two companies who are essentially bankrolling their court case.

    Flip a quarter, will the stock prices go up or go down?
  • by akpoff ( 683177 ) * on Tuesday September 16, 2003 @09:29PM (#6981684) Homepage
    Bill Gates reports wallet missing. Contents:

    Drivers license
    Picture of Melinda and children
    Weekly allowance in the amount of $15.3 million

  • Business Model? (Score:5, Interesting)

    by Professor_Quail ( 610443 ) on Tuesday September 16, 2003 @09:31PM (#6981695) Homepage
    Regardless of whether or not their claim regarding the Linux source code is true, what kind of a business are they planning to run in the future? At this point, their 'other' revenues are dropping, so I wonder if they just plan to sit around and threaten people so they can collect royalties.

    If they're earning revenue in any other meaningful way, it'd like to hear it.
    • Re:Business Model? (Score:5, Interesting)

      by MuParadigm ( 687680 ) <jgabriel66@yahoo.com> on Wednesday September 17, 2003 @12:03AM (#6982828) Homepage Journal
      I posted this in a previous SCO thread, but I'm reposting it here, because it's the best answer I can think of to explain SCO's "business model"

      What Does Darl Get Out Of It?

      Darl gets a big fat payoff if he can deliver four straight profitable quarters. Most of it is in stock, which means he'll have to keep up the fiasco for extra quarter or two to cash out.

      At that point, I think we can expect him to leave SCO -- if there is any SCO left to leave. Maybe the final legal showdown will be Darl v. Ralph, to be filed in late 2004 or early 2005. We all know how much Darl loves to sue his employers.

      Anyway, this means the SCO v. IBM case is not likely to ever make it to court because there's *no* motivation for Darl to go that far.

      In the meantime, he'll do whatever it takes to show profit on the next two or three 10-Q's. He'll slash personnel, support, anything, doesn't matter how it affects SCO's long term prospects, as long as he shows profits each quarter.

      He'll try to get people to pay for SCO IP in Linux licenses NOW, not after the case is resolved in court, because he doesn't care what happens that far down the line.

      He needs the money on the books and in the 10-Q next quarter and the following quarter. He's got two profitable quarters in a row now, though he probably wouldn't have made it this quarter without cutting personnel and associated costs. Two more to go, and he's golden.

      If he hasn't done it already, we can expect some *extremely* creative accounting over the next two quarters. Personally, I think that asset listed as "Goodwill" is just the start of SCO's attempts at creative accounting. Or maybe more money from MS. MS, according to the latest 10-Q (available at SEC), has apparently purchased those "expanded licensing options" that were mentioned in the April 30 10-Q.

      Darl's biggest fear is that something will shut down SCO and/or it's FUD machine within the next two-three quarters. If he sounds irrational and afraid, well, that's because he is. He can't pull any more profits out of Germany. Australia, Austria, and Poland are lining up to gag him in their countries. Red Hat's trying to do the same in the U.S. Of course, none of this matters much as long as no court decisions are reached within the next 3 quarters. Which means delay, delay, and delay will be SCO's legal strategy going forward.

  • by 3seas ( 184403 ) on Tuesday September 16, 2003 @09:31PM (#6981699) Homepage Journal
    are the number of reader posts to these slashdot SCO stories beginning to really decline?
  • by OpenSourcerer ( 515213 ) <hashim@haa f i z . org> on Tuesday September 16, 2003 @09:32PM (#6981707) Homepage
    This court case contains forward-looking statements that involve risks and uncertainties often indicated by such words as "owns," "all code," "100s and thousands," "main()," "greek letters," "extor^H^H^H^H" and similar expressions. The actual truths differ materially from those anticipated in these forward-looking statements as a result of various factors, including those set forth below under "The real truth" and "Prior-art" and omitted elsewhere in this quarterly filing.
  • by gazoombo ( 650701 ) on Tuesday September 16, 2003 @09:34PM (#6981724) Homepage
    What i find interesting is that Microsoft claims that it's OS is far better than the UNIX variants around today (Linux in particular) , yet they will still pay large sums of money for UNIX source to use in their Services For UNIX (SFU). Seems like they want all their bases covered.
  • by Mansing ( 42708 ) on Tuesday September 16, 2003 @09:38PM (#6981756)
    Non-License License revenue, all hype, no products, and many lawsuits. Ah, it takes me back to 1999 .....

    SCO will crash just as hard and fast. And in the current financial climate, the SEC will be knocking within minutes.
  • by jsse ( 254124 ) on Tuesday September 16, 2003 @09:41PM (#6981790) Homepage Journal
    I don't believe it unless I read it by myself, repeatedly!

    Time to fire up my favourite browser wget.

    while [ true ] ; do wget -r -nd --delete-after http://www.sco.com/ ; done
  • by dtfinch ( 661405 ) * on Tuesday September 16, 2003 @09:49PM (#6981838) Journal
    Perceived is the key word here.

    Notice that the licenses sold to Sun and Microsoft account for 100% of their SCOsource revenue, and neither appear to be Linux related, meaning that they've fooled noone into buying their $699 licenses, not even a single idiot.

    This means that absolutely linux users, out of the millions out there, believes they have a valid argument enough to buy a license. Not 1%, not 0.00001%. Not a single one. This should say something to investors, but looking back on history, it probably won't.

    Their quarterly report shows that their IP claims have no perceived strength at all, but rather it shows producers of operating systems threatened by Linux pumping money into FUD marketting business to make the campaign last as long as possible.
  • by Hamfist ( 311248 ) on Tuesday September 16, 2003 @09:57PM (#6981884)
    It also says that they have only about 12 months of cash left at the rate they're losing money. That means if they don't get more money from licensing, they will be broke before the IBM case comes to trial. If someone else sues them, they'll probably go under even sooner.

    I sure hope someone else sues them soon.
  • by Futurepower(R) ( 558542 ) <MJennings.USA@NOT_any_of_THISgmail.com> on Tuesday September 16, 2003 @10:03PM (#6981933) Homepage

    Microsoft says Linux is hot: Get the Tools You Need to Compete with Linux [microsoft.com]

    Microsoft is selling the CD: "Cost of CD is U.S. $3.50, plus shipping and handling."

    Does this mean there should be a Linux "How to compete with Windows" CD, that you can download for free? I can see it now:
    1. Don't pay Microsoft to be aggressive toward you.
    2. Use Linux and don't worry about changes in the license agreement as part of a bug fix, after you have paid for the product.
    3. No forced upgrades: Microsoft Bars Office 11 From Windows 9X [eweek.com]
    4. Using Linux and Open Office means never having a software funeral.
    The fact that there is no "How to compete with SCO" CD available from Microsoft speaks loudly and clearly.
  • by rice_burners_suck ( 243660 ) on Tuesday September 16, 2003 @10:22PM (#6982071)
    Don't forget something important: A large portion of these 15 million dollars in revenue is money that SCO never earned and will never get. That's because of the way accrual-based accounting works: Invoices written by SCO are considered Revenue in SCO's books and financial statements.

    Remember when SCO sent out zillions of invoices for $699 per copy of Linux? I believe that they don't actually expect to get paid for these invoices. They sent them out to increase their revenue, making their company look more successful, and when they won't get paid, they'll write it off on their federal taxes as "bad debts." It'll be years before this gets to court. In the meantime, showing revenue makes SCO LOOK successful, increasing their stock price.

    • Actually this isn't quite true. Though IANAA (accountant), I seem to remember two rules:

      1. Revenue cannot be recognized unless it's earned
      2. Revenue cannot be recognized unless you're likelier than not to get paid

      Thus, unless SCO wants to get into really hot water really quickly, with the SEC, and with stockholders, they could not recognize the invoices as revenue. If a court says that they actually have rights on Linux, that's another story. But keep in mind that so far, they haven't asked a court to rul
  • by Anonymous Coward on Tuesday September 16, 2003 @10:24PM (#6982083)
    Every time you reboot Linux, SCO kills a kitten.

    Unless you've paid your $699 fee, that is. Please think of the kittens.
  • by richg74 ( 650636 ) on Tuesday September 16, 2003 @10:31PM (#6982130) Homepage
    The first, in case anyone is still in doubt about who is bankrolling the SCO FUD machine:

    During the three months ended July 31, 2003, Microsoft Corporation ("Microsoft") accounted for approximately 25 percent of total revenue and Sun Microsystems, Inc. ('Sun") accounted for approximately 12 percent of total revenue. During the nine months ended July 31, 2003, Microsoft accounted for approximately 16 percent of total revenue and Sun accounted for approximately 12 percent, of total revenue.

    The second is, on the basis of the evidence I've seen, highly questionable:

    As a result of our assertion of our intellectual property rights, we have been subjected to several denial of service attacks on our website which prevented web users from accessing our website and doing business with us for a period of time.

    I guess it's that good ol' DoS attack that only happens outside office hours and on weekends in Utah.

    Finally, there is this little gem, which I find intriguing:

    During the quarter ended July 31, 2003, the Company issued a warrant to a consultant, as part of an agreement to assist the Company with its SCOsource licensing initiative. The warrant allows the consultant to acquire 25,000 shares of the Company's common stock at an exercise price of $8.50 per share for a term of two years from the date of the agreement.

    Anyone care to venture a guess as to the identity of the unnamed "consultant"?

    Rich
    SCO delenda est.

  • Dear Linux User,

    Follow the instructions in this chain letter EXACTLY, or HORRIBLE things will happen to you! Mr. L. Penguin threw away this letter, and was sentenced to five years in a Federal Pound-Me-In-The-Ass Prison for UNIX(c) patent infringement. Meanwhile, B. Gates followed the instructions to the letter, and made a million dollar gain in the stock market the very next day!

    Step 1: Send $660 to the first name on this list.

    Step 2: Move the first name on the list to the third position on the list, and move the other names up one place.

    Step 3: Do NOT put your own name on the list, or you too will be sent to a Federal Pound-Me-In-The-Ass Prison.

    Step 4: Pass this letter on to all your friends who use Linux.



    Name #1

    Darl McBride

    The SCO Group

    355 South 520 West

    Suite 100

    Lindon, Utah 84042



    Name #2

    Darrell McBride

    The Santa Cruz Operation

    355 South 520 West

    Suite 100

    Lindon, Utah 84042



    Name #3

    The Darlmeister

    SCO SCO KaChoo

    355 South 520 West

    Suite 100

    Lindon, Utah 84042



    P.S. THIS IS 100% LEGAL UNLESS SOME STUPID JUDGE STOPS US, AND EVEN IF THEY DO WE'VE ALREADY DUMPED OUR STOCK!

  • english please (Score:3, Insightful)

    by dcstimm ( 556797 ) on Tuesday September 16, 2003 @11:00PM (#6982351) Homepage
    Man, i must be tired or something because I couldnt understand a single word from the thread.
  • $1,478,950 (Score:5, Informative)

    by gsfprez ( 27403 ) on Tuesday September 16, 2003 @11:44PM (#6982701)
    that is how much 1 man - Reginald Broughton - has made since June on SCOX stock sales. which would have previously, at their price of of one year ago would havbe been under $150k (115,000 shares sold since june)

    Now, if this is not a pump-and-dump, could someone point a case of it out to me, because i obviously dont fuscking get it.

    and since i'm a network guy, and not a financial analyst - how the heck does 1 person make 10% of the company's entire profit in stock sales in less than 6 months, and this not affect anything?

    http://biz.yahoo.com/t/80/4661.html
    • I don't think it is a pump and dump. However, I posted something similar to this, asking for correction or confirmation on a previous SCO item, and never got an answer. So I'm going to post again. Anyone have details? Am I right or wrong?
      -----------

      (1) Microsoft funded the initial lawsuit by licensing SCO's code to no known purpose.
      (2) Almost nobody except for one trading firm is buying SCO stock. That one trading firm has in its board of director's Melinda Gates.
      (3) That one firm is buying up stock as
      • So I'm reading your post and it hits me...

        Microsoft wants to absorb SCO.

        Think about it. The stock options are the payoff for SCO's directors for going along with this thing. They test the PR waters by starting the whole IP action ahead of time.

        Meanwhile, the "trading firm" picks up shares of SCO whenever a director wants to sell it.

        Microsoft avoids an outright buyout which would, today, cause quite the PR backlash. But when they turn up as the owner of UNIX in a couple years, nobody's shocked...

  • So wha's new? (Score:3, Insightful)

    by heironymouscoward ( 683461 ) <heironymouscoward AT yahoo DOT com> on Wednesday September 17, 2003 @03:05AM (#6983601) Journal
    It's a surprise that SCO's attack on Linux is funded my Microsoft? I've been boring myself saying this for at least 3 months. Damn, if I could find those old comments.

    The scene: Microsoft is at war with Linux specifically, OSS generally, IBM implicitly, and the entire forward-looking IT community fundamenally.

    The problem: no-one believes a word that Microsoft says, anymore. The phrase "convicted monopolist" just rings too true. OK, thinks Mr CIO, we'll buy their products, because we have no choice, but they are a bunch of liars, and the sooner we can switch to something cheaper and safer, the better for all of us.

    The solution: launch a jihad through a shadow company. What better than Caldera, a failing Linux broker, who just happened to buy some Unix IP and is run by lawyers...

    The plan: Caldera renames itself to SCO to give itself some more street cred, then launches a one-two attack, first on IBM to give it that "David vs. Goliath" street cred. Hey, maybe someone thinks the world still hates IBM. (Guys, that is so 1980's!) Next, bounce off that attack into a full-frontal assault on Linux, using the tried and proven OJ defense. "Yes, gentlemen and ladies, if Linus is from Sweden, then all your source must belong to us!!"

    The press: it's a slow summer, and all this news is welcome. Hey, so are the little presents from those generous guys at SCO. Darl, we liked the trip to Malibu, yes sir!

    Microsoft: discrete distance. If SCO explode, they don't want to be contaminated.

    Darl's game: the hike in share value was an unexpected bonus, but hey, it's welcome. The real payoff is the parachute that Microsoft have prepared, a buy-out of SCO once/if they can win enough control over Linux. Imagine the scoop: Redmond buys Linux, a full fist up the backside for all those open source hackers. Wet dreams for the Redmond Boys, who have perhaps strayed into one goatse.cs too many.

    The OSS Community: "they can't be that stupid, surely?" Answer: no, they can't. So go figure their evil plan.

    Remember: this is happening in the USA, the country which has little stickers on hifi equipment saying "warning: not for internal consumption", the land of absolute truths, where a 12 year-old can be a cybercriminal, where laws are treated not as approximations but as holy documents. If, when, SCO win legal control over Linux, however bizarre the means and flimsy the justification, it will be an absolute win for Microsoft.

    My surprise is that the Microsoft sponsorship actually came to light so soon. I'd have thought they would find some way to hide it more discretely. As for Sun, all I can say is someone got them right proper. Silly eejits, did you really have to bend to Darl's salestalk? You've truly gone and made a huge mistake there, it is the death of your business.
  • by Ikkyu ( 84373 ) on Wednesday September 17, 2003 @10:55AM (#6985699)
    Why don't we start as a community selling sco short (borrowing their stock from a brokerage house and selling it immediately, then you wait for the price to drop and buy it back, the broker gets his stock back and you get the difference in the price)

    1. it is a chance for some of us to make some money off of sco, for a change

    2. if the trend is noticed then people will start dumping the stock, thus hurting sco directly and getting our faithful paid back sooner

    3. we know for a fact that they are lying through their teeth, trying to bluff the stock price up, this is the best way I know to call that bluff and end their charade

Multics is security spelled sideways.

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