decoration decoration
Stories

GROKLAW
When you want to know more...
decoration
For layout only
Home
Archives
Site Map
Search
About Groklaw
Awards
Legal Research
Timelines
ApplevSamsung
ApplevSamsung p.2
ArchiveExplorer
Autozone
Bilski
Cases
Cast: Lawyers
Comes v. MS
Contracts/Documents
Courts
DRM
Gordon v MS
GPL
Grokdoc
HTML How To
IPI v RH
IV v. Google
Legal Docs
Lodsys
MS Litigations
MSvB&N
News Picks
Novell v. MS
Novell-MS Deal
ODF/OOXML
OOXML Appeals
OraclevGoogle
Patents
ProjectMonterey
Psystar
Quote Database
Red Hat v SCO
Salus Book
SCEA v Hotz
SCO Appeals
SCO Bankruptcy
SCO Financials
SCO Overview
SCO v IBM
SCO v Novell
SCO:Soup2Nuts
SCOsource
Sean Daly
Software Patents
Switch to Linux
Transcripts
Unix Books

Gear

Groklaw Gear

Click here to send an email to the editor of this weblog.


You won't find me on Facebook


Donate

Donate Paypal


No Legal Advice

The information on Groklaw is not intended to constitute legal advice. While Mark is a lawyer and he has asked other lawyers and law students to contribute articles, all of these articles are offered to help educate, not to provide specific legal advice. They are not your lawyers.

Here's Groklaw's comments policy.


What's New

STORIES
No new stories

COMMENTS last 48 hrs
No new comments


Sponsors

Hosting:
hosted by ibiblio

On servers donated to ibiblio by AMD.

Webmaster
"No One Respects a Bully"
Tuesday, December 16 2003 @ 11:40 PM EST

Rob Preston has an article on InternetWeek, called "SCO's House of Suits" in which he questions SCO's business strategy of suing customers, users, and maybe Novell. "Nobody respects a bully," he writes. Of McBride's three growth strategies, two of them depend on litigation and only one of them "has anything to do with creating value." At the same time, Preston writes, SCO has abandoned its only growth opportunity, its Linux market:

"Such tactics are a throwback to the Internet bubble economy, when it mattered little what a company made or sold as long as its clever business model kept Wall Street happy. . . . .

"SCO isn't focusing nearly as much on Unix as it is on harassing Linux partisans. . . . Every company has the right to protect its intellectual property (though SCO hasn't provided much evidence to support its legal claims). Regardless, it seems a tad shallow to base two-thirds of your company's growth strategy on suing people--customers, potential customers, other vendors. . . .you can't help but wonder when the house that McBride built will come tumbling down."


Preston compares SCO's strategy to Walker Digital, "the legal machine" that patented hundreds of "business processes" it claimed to have invented, insisting it would strike it rich by collecting royalties on those patents and infringements thereof. SCO, he writes, is chasing a similar dream. Walker Digital did not strike it rich off of patents.

If you've never heard about Walker Digital, here is an article in Salon, from 1999, "Jay Walker's Patent Mania --Is the Priceline.com founder a genuine inventor -- or an intellectual-property parasite?" The company ended up being sued itself, as you can see here. Red Herring reported in 2000, in an article entitled "Walker Digital loses Its Glow", that the company laid off most of its employees when it was unable to raise capital to keep the operation going. As Forbes described it at the time, "Walker's goal of parleying his patents into viable companies seems to be dimming with every day that passes." It's a cautionary tale. (The Red Herring server was having temporary difficulties when I tried to access the article, but here is the link, when it becomes available. Here is a story in Consulting Times on Novell's plans for their Linux market, including probably dual licensing, commercial and GPL.

While Preston says SCO has "abandoned its only growth market--its Linux customer base," I think it would be more accurate to say that the decision to divorce is now mutual. As Preston points out, no one respects a bully. Let's just say it's a divorce due to irreconcilable differences, with no realistic hope of a reconciliation until the sun falls out of the sky, the moon is no more, and pigs start to fly. All on the same day.


  


"No One Respects a Bully" | 119 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Lawsuits as business
Authored by: Anonymous on Wednesday, December 17 2003 @ 12:58 AM EST
belzecue's comment here points us to Scott McKellar's story here. In Scott's story, he asks the SCO rep what percentage of the 330 employees they have are developers. "About 20%". What a business plan... =)

[ Reply to This | # ]

Best approach...
Authored by: rand on Wednesday, December 17 2003 @ 01:15 AM EST
to growing our business. Let's see, IBM sells Intel servers and is probably one of the top, if not #1, software resellers in the world. They are one of our partners, and one of our best sales outlets (notice who has two OSs in the list?).

Hey, let's sue them! And maybe a distributor or two! Then we can sue our customers! Then our potential customrs! And then sue the rest of our partners!

I feel like I'm flogging away at a dead horse, here. SCOG has pretty much killed their business, as has been pointed out too many times already.

It's a real shame. I always preferred any brand of Unix to any brand of DOS (which includes every release of MSWindows). But the inheritors of the best OS ever designed have decided to bite the barrel and take the whole thing down.

---
IANAL, etc.

[ Reply to This | # ]

DiDio email
Authored by: radicimo on Wednesday, December 17 2003 @ 01:22 AM EST
I just posted this over on the Yahoo! board, but thought I'd share it here. First is a quote from the Lyons hatchet-job in Forbes earlier today.

"Says DiDio of her tormentors, who swamp her with hateful email and "report" her to her supervisors at Boston-based Yankee Group: `Welcome to the wonderful world of Linux. These people are living in an alternative reality.'"

Apparently we're not the only ones living in an alternate reality. Following is the text of an email I sent to Laura Didio on 27 Oct. when she was on record in a story with the following about Boies, "That such an attorney would agree to handle SCO's case with no guarantee of a fee unless SCO wins suggests the Utah-based company has a good chance of success, DiDio said." She did not deign me worthy of an answer. My tone may have been a bit snide, but hardly hateful. The history and facts speak for themselves here.

Date: Mon, 27 Oct 2003 09:03:40
-0800
From: "xxxx" 
To: xxxx@yankeegroup.com
Subject: Boies not on
contingency
User-Agent: Mutt/1.2.5i

Hello,

I just read an article where you
claim David Boies is still handling SCO's case on a contingency basis.  I
believe you might want to get up to date on your analysis and read some  of the
recent SEC filings for SCOX.  Boies' firm now has something like a $1M
guaranteed payout, plus stock, plus a percentage of any financing, revenues,
etc.

I don't know what your motivations are; whether you're just being lazy or
purposefully duplicitous.  But, given these recent developments you can hardly
claim that Boies' actions still suggest SCO has a good chance of success.  I
would argue just the
opposite.


http://www.newsfactor.com/perl/story/22561.html

Cheers,

xxx

[ Reply to This | # ]

Bully, Like a Dinosaur
Authored by: hbo on Wednesday, December 17 2003 @ 01:49 AM EST
In one of his inspiring communications with the press, Darl McBride relates how people told him that he couldn't pursue his litigation strategy because it would anger the Linux community. His reply was something like "do I report to the Linux community?" I tend to believe that the substance of this anecdote is true, whether Darl actually said it or not. An executive, or certainly a developer at a Linux company would probably say something like that, given that the FOSS process is cooperative, and the anger of the community you are basing your business on is a force to be reckoned with. But Darl had a bolder plan than merely trying to leverage that cooperative effort into a growing business. Caldera had already failed trying that, had it not? No, Darl was going to make money the old-fashioned way, by parisitically sucking it out of competitors and customers, without providing a shred of value in return.

I've been around the tech industry for a few years. I've watched Microsoft start to pay for its short-sighted pursuit of market dominance to the exclusion of all else, including stuff that might have helped them stay dominant, such as secure architectures and efficient code. I've watched an industry quail in fear at Microsoft's actions, and I've seen the resentment that caused contribute to the rise of Linux in the enterprise. I sense some of the same arrogance, ignorance and greed in the new SCO, particularly in the pronouncements of its president and CEO.

"People pay for what they do, and still more, for what they have allowed themselves to become. And they pay for it simply: by the lives they lead." - James Baldwin
SCO cannot harm Linux. The engine of its success is the idealism of its community. That idealism is not unalloyed, but it is real. If every business currently using Linux stopped tomorrow, Linux would survive the withdrawal of all those resources. Linux, and the larger communities of Free Software and Open Source Software would retain the twin advantages of unquenchable energy and enormous leverage. I and many others would have to find new jobs, but we'd manage.

No, the ideas that are at risk here are the ones Darl McBride and his fellow travellers hold so dear. That you can make money as a parasite. That central control and planning are the only way to go. That you can wring water from the stone of twenty year old code. These dinosaurs are the ones truly endangered here.

---
"Even if you are on the right track, you'll get run over if you just sit there" - Will Rogers

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: Rocketman56 on Wednesday, December 17 2003 @ 01:53 AM EST
Particularly your customers... An interesting article in the link..
Apparently part of McDonald's has begun to leave SCO..

http://www.suse.com/us/company/press/press_releases/archive03/mcdonalds_apollo.h
tml

(Sorry about the link, it's late!)

Steve

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: surak on Wednesday, December 17 2003 @ 01:54 AM EST
The way SCO is going, no one's going to want to do
business with them -- ever. No one likes a bully. Yeah.
More like no one wants to get sued. If SCO is willing to
sue everyone, including its own customers and potential
customers, then why would anyone want to do business them?
Get a reputation for being lawsuit happy and watch what
happens to your business -- you will have none.

My suggestion to Darl McBride would be to just give this
suit up. IBM's not going to buy you out, IBM will eat you
alive in court, and no one is ever going to want to do
business with you again. The name of "The SCO Group" has
been soiled forever, and Mr. McBride isn't likely to get a
job with anyone, except maybe Microsoft. ;)

Cut your losses and go home, SCO.

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: irieiam on Wednesday, December 17 2003 @ 02:09 AM EST
When this first began, I wrote my Congressman and a Senator and asked if they
did any business with SCOG and would they stop. I pointed them to the best
articles I had at the time and explained (as best as I could to non-techies) Too
bad I didn't have groklaw.net in my bookmarks then. =(

Anyways, the Congressman wrote me back and said he would pass that info along to
the appropiate people who deal with purchases, assets, etc.. and see what they
thought.

Whatever the outcome of that = At least I tried =)

---
-irieiam

The first requisite of Freedom is choice. The second would have to be
availability of information. Something bless the internet...please.

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: brian on Wednesday, December 17 2003 @ 02:46 AM EST
"McBride is unapologetic. "The last time I checked, the
CEO was in charge of shareholder value," he said in a
recent interview with CRN, "not standing around the
campfire singing 'Kumbaya' with the Linux world.""


If your only business growth comes from "standing around
the campfire singing 'Kumbaya'" and you toss napalm in the
fire, is that a plus or a minus to "shareholder value"? I
have always said that Darl & Co. don't get it and this
statement only further proves it.

B.


---
#ifndef IANAL
#define IANAL
#endif

[ Reply to This | # ]

Speaking of bullies: discussion on the Lyons article in Forbes
Authored by: Till Poser on Wednesday, December 17 2003 @ 05:34 AM EST
The discussion on the Lyons artices in Forbes has begun. There are also many references to Groklaw.

What I really liked was the following excerpt:

http://forums.prospero.com/n/mb/message.asp?webtag=fdctech&msg=61.12

"I guess that the Marabunta Army Ant style of information gathering, collation and digestion that has cropped up with this affair and is exemplified in Groklaw (http://www.groklaw.net) is a bit overwhelming. Things like that used to be aired by a few "knowledgable" people that expounded the "truth" to the masses. Legal informations and arcane corporate goings on are now widely available, suitably digested and written up. Crucial information is available and annotated quicker than most news services can manage. Groklaw has managed an opinion and information leadership in this particular case that Forbes will never have. Forbes may be read in the board rooms, Groklaw, however, is read in the field, where the action is. And after all is said and done, it is the field that influences purchasing decisions for their pointy-haired bosses."

A really nice remark. Maybe a bit overenthusiastic regarding the information leadership, but still nice.

Till Poser

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: Anonymous on Wednesday, December 17 2003 @ 08:58 AM EST
The thing about this SCO debacle that continues to amaze me why Caldera/SCO
after they had acquired the rights to System V product and even before they
determined that there may be some cross pollination of enterprise level code
into mainstream Linux, that they did not take the revenue stream they had and
create an advertising campaign to capitalize on it:

System V Linux

Enterprise Unix in the Linux Environment

SCO the creators of Enterprise Linux

The Pointy Headed Managers and Purchasing Agents would have seen the
AT&T-UNIX-SCO pedigree and SCO would now be the number one distribution used
in the Fortune 1000. They would be making money hand over fist from sales and
support regardless of the fact that they were shipping the exact same Linux
software that everyone else was.

Now if that’s not a recipe for profit then what is? After all they would not
have to even develop anything, just re-package and brand whatever is released by
the other major distributions.

Instead they kill off their Linux distribution to go head to head with the
entire enterprise community forcing them to pay protection money and in the
process cripple their current revenue stream, make themselves a laughing stock
of the technical world and destroy all the “Good Will” they ever had in the
enterprise community.

I just don’t understand it but then again IANAL.

[ Reply to This | # ]

What does Yankee Group run?
Authored by: Anonymous on Wednesday, December 17 2003 @ 09:04 AM EST
Mathfox:

Presumably Yankee Group has a Web site. Does it run Linux?

[ Reply to This | # ]

Don't forget Canopy...
Authored by: kuwan on Wednesday, December 17 2003 @ 10:20 AM EST

One thing that we cannot and should not forget is that it is really the Canopy Group that is pulling the strings. Canopy should be viewed as the ultimate bully. Earlier this year they won a successful $40 million settlement from Computer Associates (CA) because of CA's "failure to honor a deal to help sell Center 7's software inventory." Proof that entering into a contract with a Canopy company only makes you a future legal target for them.

There are also some choice quotes from Ralph Yarro, CEO of the Canopy Group, in this story. This one in particular stands out to me:

We don't care how big you are. If you mess with us, we're going to take you on, even to our utter destruction, whatever occurs. We fear nobody, and we are respecters of no persons.

When I first read this I realized that they had already sacrificed SCO and are fully prepared for SCO to be destroyed. All they hope for now is the slight chance of a huge legal payoff. So what can we learn from this? What I've learned is that the way to hurt SCO is to hurt Canopy. While Yarro and Canopy may be fully prepared for SCO to be utterly destroyed, they may not be willing to let Canopy die with SCO.

Take a look at Canopy's front page and learn who the Canopy companies are. Research their actions, follow their press releases, and by all means boycott them. Let Canopy companies know that you don't approve of their relationship with Canopy. If Canopy starts to feel the pressure and begins to fear becoming as hated as SCO is, then they may force SCO to call off the dogs. We need to show people that Canopy's strategy includes suing customers, potential customers, partners, and other venders.

The question is, to what extent will Canopy go to support SCO? We already know that they are willing to sacrifice SCO, but are they willing to destroy themselves in the process? If they are, then so be it.

[ Reply to This | # ]

"No One Respects a Bully"
Authored by: jkondis on Thursday, December 18 2003 @ 03:25 AM EST
"Also, I don't recall seeing any mention of Monterey in any court
filings."

Monterey is spoken of at length in both of Caldera/SCO's legal complaints.
McBride also makes the allegations during the Dec. 5 oral arguments, that IBM
took Caldera/SCO's trade secrets during Monterey and planted them into Linux.

...J

[ Reply to This | # ]

    Groklaw © Copyright 2003-2013 Pamela Jones.
    All trademarks and copyrights on this page are owned by their respective owners.
    Comments are owned by the individual posters.

    PJ's articles are licensed under a Creative Commons License. ( Details )