SCO a Zombie, Not Microsoft's Latest Monster Deal

Rob Enderle

Last week I got a surprise call asking my opinion on whether the $100 million influx of funds was going to make a big difference in SCO's future. All I could think was: "Damn, someone brought SCO back from the dead!?" I've since seen speculation that Microsoft, or specifically Bill Gates, is funding this personally and other insanity so I figured I'd weigh in on this non-news event.


$100 Million Drop in the Bucket


The deal is actually a $5 million equity deal followed by a $95 million loan at aggressive terms (which given SCO's lack of material assets is interesting in and of itself). My guess is that the "investors" felt that IBM was likely to be willing to spend more than $100 million to make this mess all go away and that would support their investment. The risk is mitigated somewhat by the fact that the related attorney's fees, which seem to make up most of the collateral, were pre-paid.


While anything can happen, so much time has gone by since this thing got started that I'd be surprised if anyone on the IT side cared a great deal one way or the other. It would be an incredible stretch for anyone to suggest any effect whatsoever on Linux or Windows adoption based on SCO's being brought back from the dead as a kind of zombie SCO. (For some reason I want to play Michael Jackson's "Thriller" right now.)


Microsoft's Lack of Interest


With no likely benefit, there should be little interest in Microsoft investing in this renewed effort. And the kind of negative and counterproductive press it would pick up if this involvement was discovered would keep most Microsoft executives well away from this effort. I had to laugh at the suggestion that Bill Gates himself would be behind this, given that Bill has been removed from day-to-day Microsoft stuff for nearly eight years now and most recently began his final separation from the company.


His focus today is on his charitable trust, which appears to be working on getting clean water, medicine, food and jobs to underdeveloped countries. In short, outside of a few speaking engagements, Bill really hasn't had that much to do with technology of late. In fact, I don't recall an instance where he has ever written a big personal check for something like this, even when he was running Microsoft.


Microsoft's current strategy is to interoperate and compete on merit. Management honestly believes that will give the company the best competitive advantage, and that the shortcomings surrounding the Linux stuff are largely economic. I think they have also finally realized that every time they bad-mouth Linux, they simply contribute to the marketing of Linux and have decided, with possibly one exception, to stop.


Fueling SCO would seem to increase the controversy and probably help Linux more than hurt it. That is, if it had any effect at all, which is in and of itself questionable. Think about it; that is something you wouldn't want to do if it was your money.


Wrapping Up


SCO stopped really being relevant some time ago. It may be able to get IBM to pay what the investors seem to be expecting, but I don't think it will have much, if any, effect on the broader market unless it first regains control of the UNIX IP and then is acquired by a large company that is well funded. If it wins the Novell appeal, I would expect IBM to offer to pay it in exchange for eliminating this IP risk to Linux. All of this would happen with little or no effect on anyone else. If it loses the Novell appeal, it just ends more quickly.

Add Comment      Leave a comment on this blog post
Feb 19, 2008 8:55 AM none none  says:
I dont think it is that way. Why would someone invest 5 million and the mess it brings. There are many other ways you could put your investment to better use.IBM is never going to pay single penny. It is a cold war. IBM will never pay anything - it is that simple. If IBM pays they will be totally in shame and it will add to the FUD that they put the code in Linux.It is funded by MS. They want to keep the FUD alive so as long as possible. Thats their only way out. Reply
Feb 19, 2008 8:59 AM none none  says:
So why are you defending Microsoft ?Rob Enderle, founder of the Enderle Group, is a consultant, writer, and widely quoted technical and legal analyst in the information technology industry. Microsoft, Advanced Micro Devices, the SCO Group, IBM, Hewlett-Packard, and Dell are (or have been) among his clients.[1]Enderle has been critical of Apple Computer and Linux, as well as Unix and the open source/free software movements in general. In particular, he has described Linux as a free-software scam,[2] and he has compared some Linux advocates to terrorists, predicting that one of them or perhaps a group of them will go too far at some point and do significant damage to the open-source movement, the ongoing litigation with SCO or their employers. Reply
Feb 19, 2008 9:02 AM JacqueShellaque JacqueShellaque  says:
Rob, Rob, Rob, how can you write such drivel and still look yourself in the mirror? Reply
Feb 19, 2008 10:41 AM Trencher Trencher  says:
"effect on the broader market unless it first regains control of the UNIX IP"It needs to actually have had control first before it can regain it. Reply
Feb 19, 2008 12:55 PM Bob Robertson Bob Robertson  says:
"Microsofts current strategy is to interoperate and compete on merit."That is a lie.Every file format, protocol and API used in all of Linux and BSD, in all of F/OSS by definition, is open and fully documented.If Microsoft ever had any desire what so ever to be "interoperable", they would be 100% interoperable already. They could be 100% compatible with everyone else tomorrow. But they do not want to.If Microsoft had any desire to compete on "merit", they could utilize ODF and compete against OpenOffice, Koffice, Abiword and the rest of the "office" applications, head to head. But they do not want to.That's why Bill got a buddy to drop $100M in pocket change to keep SCOX alive, after pushing funding (and, I believe, advice) for the SCOX fraud through other backdoors since the very beginning, because if Bill did it himself it might just be enough of a slap in the face that the last few people who didn't notice already would wake up. Reply
Feb 20, 2008 6:39 AM cybervegan cybervegan  says:
Ha ha! Rob says, so it MUST be true!Neat how you managed to inject a bit of MS-Shill propaganda into the piece though. A bit of mis-direction here and there, a bit of denial. You never were that subtle. Given your track record of being consistently wrong where SCO is concerned, I don't know why you bother to continue to trot out such tripe.But I could never be an analyst; I'm too honest.-cybervegan Reply
Feb 21, 2008 2:41 AM Greg Lorriman Greg Lorriman  says:
Who are these mindless ogres leaving their fecal matter in your comments?Weirdos. Reply

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