SCO sues IBM over Linux

Jeff Kinz jkinz at kinz.org
Mon Mar 10 10:31:51 EST 2003


On Mon, Mar 10, 2003 at 10:07:00AM -0500, Andrew W. Gaunt wrote:
> My guess is that IBM is first on the hit list? Perhaps the deepest pockets.
> Would this case (as they see it) also apply to SUN who supports Unix/Linux
> as well. Anyone else on deck?
> 
> >I see this as a half-hearted attempt to blackmail IBM to settle out of court,
> >and I think that SCO underestimates IBM in this case, since an out-of-court
> >settlement would do nothing for the total over-all Linux and Open Source
> >community, and IBM knows that this would not be a "good thing".

I don't think the reason for hitting IBM was IBM's deep pockets.  Deep pockets
mean that IBM can afford to pay lawyers to drag this lawsuit out for as long
as Microsoft has dragged out the SUN-Java suit against Microsoft. (going on
eight years? now)

IBM's lawyers are probably nearly as good as Microsoft's.  I suspect that SCO
has another motive as other have suggested.  like getting bought out.

In fiscal 2002 SCO/Caldera lost 25 million dollars after taking in 64 Million.
(they spent 89 Million, but only took in 64 million) 
With a burn rate like that they will go broke quickly unless they huge cash
reserves or vaulable assets they can liquidate easily.

In their most recent quarter they lost only 3 million on 15.5 million of
revenue so they are slowing down the loss rate.   The company's assets
are reported to be worth 37 million so they can go for 12 quarters
(3 years) losing 3 million/quarter. (assumes they can sell their assets at
a reasonable price)

This is not a strategy any business leader would willingly follow and funding
a huge lawsuit against IBM could cost them tens of millions per year.

Unless they have a slam dunk of UNIX code being used directly in the Linux
system they can't win the lawsuit quickly.


-- 
Jeff Kinz, Open-PC, Emergent Research,  Hudson, MA.  jkinz at kinz.org
copyright 2003.  Use is restricted. Any use is an 
acceptance of the offer at http://www.kinz.org/policy.html.



More information about the gnhlug-discuss mailing list