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McBride on the Legal Cap, Groklaw Honored, and "Geeks in Love"
Friday, November 05 2004 @ 11:52 PM EST

Groklaw member DH heard a brief interview in early October with SCO CEO Darl McBride on CNBC Europe. He did a transcript of the interview for us, and here is a bit of it, McBride's take on the new legal fee arrangement. The interviewer calculated SCO's cash and its current burn rate and asked McBride if SCO would be around in 7 quarters:

Darl McBride: As of six weeks ago now, we have a new agreement with our lead litigator David Boies, he is one of the best trial lawyers in America. He is leading our case. We did a deal with him - where we're going to sign over thirty-one of our forty-three million in cash, up to that amount.

Interviewer: So it is capped at that level.

Darl McBride: It is capped at that amount. If we run out after thirty-one million, David is going to put it on his shoulders and take it all the way to the finish line, not only a jury trial verdict but also any appeals that might happen after that. So we're thrilled that we have him aboard with us. It is like an insurance, stop-loss feature. We're not going away at this point. . . . As you have said, we have seven quarters, but with Boies feature kicking in, it appears we will be there [at trial] soon, and then, you know, we'll go with what the jury verdict is.

The interview, I'm told was done on October 7, and the letter of engagement was dated October 31.

If Boies really intends to carry the water bucket up the hill for SCO on unreimbursed shoulders, I will be slackjawed thunderstruck. Maybe this at least means we won't have to wade through 88-page memoranda any more?

The interview also covers how McBride views his business and its prospects for the future. He says the core business is now cash positive, by which he seems to be referring to their software business, and now the legal fees are capped, and so he sees prospects in their future in mobile phones, saying something about "how you take internet-based applications for businesses and launch them." You'd have to listen to the interview to catch what he means about that. He is asked if, considering how strongly people feel about Linux, the company may have done itself long-term damage with potential customers. He says most of their core customers are fine with SCO's activities. He acknowledges that the FOSS community has strong beliefs, but so does he. He continues to view it as a fight for his property rights. As ever, we inhabit separate and distinct universes. The difference is, his is getting smaller and smaller.

Groklaw Honored

Groklaw made the Linux New Media Award 2004 Hall of Fame, I've just been informed. We tied in third place with the City of Munich in the category of Special Award for outstanding promotion of Linux and Open Source -- Institution/Organization, placing ahead of OSDL, Creative Commons, Junta de Extremadura (Spain) and the Government of Brazil. I know. I can't believe it either. Here is the long list, and here's the Hall of Fame list. It's in German, but Groklaw is Groklaw in every language, and if you scroll down, you'll find it. I'll probably get erudite emails about languages in which Groklaw is not Groklaw. You know what I mean, though. If Mr. McBride can speak loosely, I believe I may relax a bit here as I enjoy this recognition for a while.

The jury this year was made up of such luminaries as Elisabeth Bauer, Zack Brown, Eva Brucherseifer, Alan Cox, Simon Budig, Lars Eilebrecht, Hong Feng, Jutta Horstmann, Miguel de Icaza, Klaus Knopper, Marc Lehmann, Yuwei Lin, Jorg Luther, Martin Michlmayer, Arturo Fernandez Motoro, Christian Ney, Frauke Oster, Rafael Peregrino da Silva, Christian Perle, Chris Schlager, Franz Schmid, Richard Seibt, Marcelo Tosatti, Andrew Tridgell, and Oliver Zendel.

I didn't know most of these people even knew Groklaw existed, and I am deeply honored. I love Knoppix, as you know, and to find out that Klaus Knopper knows I am on the same planet he is on is a truly satisfying feeling.

I heard from James Boyle too, whose article about the sustainability of Open Source you enjoyed so much. Professor Boyle says he loves Groklaw and frequently directs his students to it. He says Groklaw gets the law right, and the dialogue is mostly civil. We're striving for 100% civil, actually, and if the trollsters wear out before we do, I believe we'll make it. Anyhow, I knew you'd like to know that he will be doing a monthly column for Financial Times, which I will be looking forward to reading with tremendous anticipation.

"Geeks in Love"

After a big month-long buildup, SCO didn't go live with their website Monday, as you know, but they are now saying that they probably will at some point, in some form. And of course, they are free to do whatever they wish about that.

What is so intriguing is the reaction from the media. I have deliberately said absolutely nothing about it, other than one sentence quoting them as saying that they would not be going live last Monday, because I didn't wish to influence anyone. I was just curious to know what others thought without any Groklaw input or influence.

I think it's fair to say that the dominant reaction is that SCO was wise not to put up an anti-Groklaw website and that they showed good sense in pulling that project. Here are just a few reactions:

  • LinuxInsider --

    Red Monk's Steve O'Grady told LinuxInsider that SCO's decision [to do the prosco website] shows a lack of understanding of what drives Groklaw, which is essentially a community.

    "The value of Groklaw is the community itself, with people attending hearings, scanning documentation, getting it posted online and discussing it," he said.

    SCO's site was also going to be closed to the public, which, O'Grady says, is no way to compete with Groklaw, which has fostered a massive community of Linux and open-source watchers.

    "To do it right, SCOinfo.com would have to be open to the public. . . . They have certainly individual defenders here and there but that's not enough to drive a community-fueled site."

    Barring some sudden change of heart, it looks like Groklaw will remain the primary site where Netizens visit to gather information and analysis of intellectual property issues, including those relating to SCO and its suits against IBM, Novell and Red Hat.

  • Comment, ZDNet.co.uk --

    SCO's habit of suing its customers has made it seem more attuned with other, darker forces. The company would have about as much chance of building an active community of Unix or Linux users ready to spring to its defence as would the RIAA with a community of music fans.

    So what would be left for scoinfo.com? A place to post legal filings? Despite Groklaw's openly declared partisanship, the site is also an unparalleled source of accurate legal reportage on SCO's court adventures. If it had shown bias or incompetence here, be sure that SCO would have already drawn our attention to it. It's inconceivable that SCO, or anyone else for that matter, would be able to produce a more timely and comprehensive set of documents. That job is taken.

    SCO clearly feels hurt by Groklaw and wants to hit back. Yet in recognising that it has no real case to make against it online, the company is sensibly husbanding its resources to concentrate on its two business plans: litigation and software development. We hope that the company will further realise that Groklaw's unassailable position reflects the strength of the arguments it espouses. Two business plans is one business plan too many: for the good of its customers and the market as a whole, the company should now take the next logical step.

  • EBCVG's Security IT - "SCO Finds a Drop of Common Sense?" --

    Obviously SCO's pride is hurt as they see it as their right to defend what they like to feel is their intellectual property. However, the way to win over the hearts and minds of large communities isn't by spreading what would be, at worst disinformation and could be, at best the same information they've been responding with all along. . . .

    One thing is certain though, Darl McBride, SCO's CEO, is unlikely to take anything lying down and the open source and legal communities are unlikely to accept SCO back into the fold until they drop all lawsuits and get back to making software.

I checked out Slashdot reactions too, and everyone there seemed to agree with the mainstream folks, and you know how rare that is. In short, I couldn't find anyone who thought SCO would benefit themselves by going forward with the site as announced. But I did find something wonderful.

In a comment left on Slashdot, someone using the handle Robotron2084 mentioned that he had been approached by SCO with a request to use one of his animations, one called "Steve, the Linux Super Villain." They wanted to link to it in a section of their website they were going to call Just for Fun, "just to show people that we have a sense of humor." I found that kind of touching, particularly after I saw the animation, because I understood why they wanted to use it, but I think they missed the point of it, particularly the significance of the airplane seat. But heaven knows my heart feels for the employees of that company. It must be so hard to wake up and go to work. Anyway, they were not given permission to link to it. The author says he replied, "Absolutely, without a doubt, no."

I truly think from this exchange that SCO seriously does not understand how deeply their attacks on Linux are harming them.

I saw a link under the handle, and I was curious enough to go look at Steve, the Linux Super Villain and the other animated cartoon mentioned, Penguin Blood Ninja FiaSCO. I enjoyed them both, so I started clicking on animations, one by one, (note that there is a language issue if you are sensitive here and there and you'll then surely want to skip the one with the *** in the title), but then I discovered one, "Geeks in Love", that I think is truly a work of art. I am quite serious about that. Of course, Scott McCloud prepared me for the concept of cartoons being art.

It is an animated work the author, Chris Hill, created about his parents, about how they met and fell in love. Finally, his mom fell in love. It is so charming and unique and memorable, I wanted to share this find with you. There is one part at the end, where his mom interprets an event differently than I would, personally, but, hey, we're talking art here, and there is no quibbling about content in a man's work of art. I hope you enjoy it as much as I did.

He sat his mother down during a visit she paid him and without mentioning his purpose got her to talk about her life, his dad, and how they met, and for a couple of hours she talked into the microphone, and taking that raw material, he fashioned the most lovely story about the Princess and Wally the Frog and how he turns into her Prince. Yes. Hill used Linux.

You can watch the first half for free before deciding if you wish to pay a pittance to see the rest. Even just the first half is well worth watching, but if you want to cry, you need to watch the ending. I hope you pay way more than a pittance, as work like this deserves support, I believe. I know I'd like to see what he does next. And to provide him with the time to do it, we, the audience, need to support his artistry. There are no kings supporting the arts any more, that I know of, so it's up to us peasants to do it, if we want some more. Here, then is "Geeks in Love". Enjoy.


  


McBride on the Legal Cap, Groklaw Honored, and "Geeks in Love" | 154 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Groklaw Influence: What SCO never considered...
Authored by: Anonymous on Friday, November 05 2004 @ 11:56 PM EST
...and what they were unprepared to deal with. Congrats, PJ!

[ Reply to This | # ]

Corrections here
Authored by: josmith42 on Saturday, November 06 2004 @ 12:03 AM EST
Because we like em...

---
Forty-two: the answer to the question of life, the universe, and everything.

[ Reply to This | # ]

$31M cap: Not!
Authored by: whoever57 on Saturday, November 06 2004 @ 12:18 AM EST
There is no $31M cap. It is a fiction. There is a cap of fees to the lawyers at about $26.5M, with an estimated $5M of expenses. How can a CEO get away with making false statements like this?

Even using the $5M estimate, the figures add up to more than $31M -- it's $31.5M (from memory).

[ Reply to This | # ]

Cash flow positive?
Authored by: Anonymous on Saturday, November 06 2004 @ 12:38 AM EST
SCO's ability to generate cash from operations will last precisely as long as it
takes their key customers to abandon ship. There are rats streaming onto the
foredeck already, carrying little Thornton Burgess hobo poles across their
shoulders.

Speaking as a senior IT executive with 20+ years of experience, and as someone
who has used UNIX and UNIX variants on a variety of successful systems installed
in thousands of locations, I don't see why anyone would either choose SCO as a
platform, or choose to remain on SCO as a platform. There is simply no logical
argument that I can construct for using SCO software, at any price.

That is Mr. McBride's fundamental business problem, and it isn't going away,
lawsuit or no lawsuit.

[ Reply to This | # ]

The Airplane Seat: I Didn't Get It Either.
Authored by: Weeble on Saturday, November 06 2004 @ 12:48 AM EST
Would someone kindly enlighten me on the significance of the airplane seat in
"Steve, The Linux Super Villain"? Thanks.

---
IANBAHD--I Ain't Nothin' But A Hound Dawg.

[ Reply to This | # ]

Yay for ZDNet UK
Authored by: RealProgrammer on Saturday, November 06 2004 @ 01:46 AM EST
SCO clearly feels hurt by Groklaw and wants to hit back. Yet in recognising that it has no real case to make against it online, the company is sensibly husbanding its resources to concentrate on its two business plans: litigation and software development. We hope that the company will further realise that Groklaw's unassailable position reflects the strength of the arguments it espouses. Two business plans is one business plan too many: for the good of its customers and the market as a whole, the company should now take the next logical step.

We couldn't have said it better ourselves.

---
(I'm not a lawyer, but I know right from wrong)

[ Reply to This | # ]

OT stuff here.
Authored by: Franki on Saturday, November 06 2004 @ 02:03 AM EST
Here is an interesting article at Eweek.

Is Microsoft ready to assert IP rights over the Internet.

This is about microsoft claiming it has IP rights over many of the internet's core protocols, including but not limited to TCP/IP v4 and v6.

This is defincately something that OSS supporters should be concerned about.

Regards

Franki



PS, I wish groklaw had a html helper toolbar, its a pain to have to type in the actual HTML, perhaps we should hack some of the compose code from wordpress or one of the other blogs into geeklog.

---
Is M$ behind Linux attacks?
http://htmlfixit.com/index.php?p=86

[ Reply to This | # ]

"Geeks in Love"
Authored by: Reven on Saturday, November 06 2004 @ 02:22 AM EST
The Geeks in Love clip indeed is very worth the $0.25. The comment:
There is one part at the end, where his mom interprets an event differently than I would, personally
...was, in my mind, quite unnecesary. I don't know why it is that those who eschew spiritualism seem to have to comment on it all the time. Is it a discomfort issue?

---
Ex Turbo Modestum

[ Reply to This | # ]

McBride on the Legal Cap, Groklaw Honored, and "Geeks in Love"
Authored by: John M. Horn on Saturday, November 06 2004 @ 03:37 AM EST
In the morning, when no one is asleep in the room, I'll watch these links with
interest. Until then, the suspense is killing me. *Sigh*

As for SCO's burn rate, I'm sure they'll survive until the jury trial if IBM is
able to nail their feet to the floor in the courtroom with the jury, because
that is about the only way SCO will ever be caught dead in a room with an
actual, real life, jury.

After that, who knows though. BS&F may be willing to handle the appeals but
the by then utterly destitute SCO will no longer have a business to run. Darl
will be presiding over the half dozen or so employees left trying to convince
them to work as volunteers until they win on appeal most likely.

And if SCO declares bankruptcy, will BS&F still pursue the appeals on behalf
of SCO? It seems unlikely to me. Why would they, surely BS&F knows
rearranging the seats on the Titanic will not save the ship. *Shrug*

[ Reply to This | # ]

Bugliosi disagrees with Darl :-)
Authored by: Anonymous on Saturday, November 06 2004 @ 03:39 AM EST
Bugliosi on Boies:
As far as Boies is concerned, if I'm going to be candid I have to say that although he seems to be a very nice, pleasant man and quite intelligent, with photographic memory, and although he may be a superb corporate or business lawyer, he bears no resemblance to what my conception of an effective trial lawyer is. At least based on what I saw of him in the case of Bush v. Gore, not only wasn't Boies a fighter (indeed, he was almsot meek), but he wasn't forceful or eloquent at all in making his points. And although he seemed to have a very good grasp of the facts, he seemed completely incapable of drawing powerful, irresistible inferences from those facts that painted his opposition into a corner.
["The Betrayal of America", pp. 72–73]

[ Reply to This | # ]

Accept SCO back? Not likely!
Authored by: Anonymous on Saturday, November 06 2004 @ 06:54 AM EST
One thing is certain though, Darl McBride, SCO's CEO, is unlikely to take anything lying down and the open source and legal communities are unlikely to accept SCO back into the fold until they drop all lawsuits and get back to making software.

I don't think SCOX had fire insurance on all those bridges they burned. There's no way back for them.

[ Reply to This | # ]

Congratulations PJ...
Authored by: eamacnaghten on Saturday, November 06 2004 @ 08:36 AM EST
Congratulations PJ on well deserved recognition. You are extremely well regarded amoungst all Open Source developers (all I am aware of anyway - including me for what that is worth).

Long may this site continue.

Web Sig: Eddy Currents

[ Reply to This | # ]

$43MM in cash & cach flow positive
Authored by: Anonymous on Saturday, November 06 2004 @ 09:14 AM EST
That is what McBride was saying on Oct 7, isn't it?

According to yahoo:

Scox has $43MM, but I think that figure was from July 31st. I believe that since
then, scox has made some substantial payments to baystar. Not to mention
payments to lawyers BSF and others, then there are the ordinary business loses.
The $43MM figure doesn't seem correct to me.

Also, according to yahoo:

Profit Margin (ttm): -32.45%
Operating Margin (ttm): -45.81%

Management Effectiveness
Return on Assets (ttm): -24.22%
Return on Equity (ttm): -62.02

Cash Flow Statement
From Operations (ttm)³: -6.06M
Free Cashflow (ttm)³: -6.33M

And scox is cash flow positive?

[ Reply to This | # ]

Senior Software Engineer position still open at SCO
Authored by: Anonymous on Saturday, November 06 2004 @ 10:17 AM EST
http://www.sco.com/company/jobs/ Hey guys. Maybe you thought you wouldn't have
a chance... but the position is still open. The position was posted in January
of this year. I am sure HR is having a hard time sifty through all the resume
submissions. But there still is a chance that your resume will stand out... so
apply today. SCO is in real need of someone who understands code!


Can someone tell them they have dead links on there site too?

http://www.sco.com/2004forum.html


[ Reply to This | # ]

so were the ordinary stockholders consulted
Authored by: Anonymous on Saturday, November 06 2004 @ 12:51 PM EST
was there a shareholders meeting held to vote on this fee
agreement. Cos from where I'm standing, it looks like
there's been a carve up agreed to suck the money out of
SCO leaving an empty husk. SCO appears to be primed to
survive long enough for the favoured few to complete their
planned sales of the stock they awarded themselves for
peanuts.

[ Reply to This | # ]

"Geeks in Love"
Authored by: rp$eeley on Saturday, November 06 2004 @ 01:16 PM EST
This took quite a while to create, and was, IMHO, awesome.
As for how I would have "interpreted" that part at the end, well
that's an individual thing, isn't it.
Love.

[ Reply to This | # ]

At last, a pic of PJ!
Authored by: Anonymous on Saturday, November 06 2004 @ 02:13 PM EST
Looks like Mr. Hill found a pic of PJ. Check out the "gorgious fembots
with a penchent for evil" for a look.
-bubba the barbarian

[ Reply to This | # ]

I know i'm stupid....
Authored by: The_Pirate on Saturday, November 06 2004 @ 02:30 PM EST
...and don't know a thing about math, but i simply cannot get into my tiny head,
how you can hire 10 people (lawyers or otherwise) burn US$ 31M - or more - and
think it's a fair deal.

If i was doin' buisness that way, i think i would live under a bridge now (never
mind the presence of trolls).

Can anyone give a half-way reasonable explanation to this, please? I'm
flummoxed.

[ Reply to This | # ]

Switch to Linux
Authored by: ewe2 on Sunday, November 07 2004 @ 03:04 AM EST

I'd like to point readers to Steve's little blog concerning this piece: I'm all about Open Source. One of the most reasonable pro-OSS articles I've ever read.

[ Reply to This | # ]

mobile phone business
Authored by: Paul Shirley on Sunday, November 07 2004 @ 09:46 AM EST
If Darl really believes SCOG has a future in the mobile phone business he's
finally left this planet.

If they hope to enter the onboard OS market not only does he have a product less
suited to shrinking onto phones than many existing Linux variants, he's also
joining a market where Microsoft are struggling hard to get established. Unless
their plan is to become a Windows shop their friends at Microsoft might become a
whole lot less friendly very quickly. Linux has been tried and got nowhere as it
is.

Its even harder to see what place they could take in the infrastructure side of
the business. If network operators decide to use Unix why would they choose an
obsolete version from SCOG, one with conspicuously declining 3rd party support.

Maybe what he really means is a move into the premium phone call business, ring
tones, sex lines and the like? Seems more appropriate in so many ways...

[ Reply to This | # ]

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