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The Victor Raisys Back Story
Friday, August 01 2008 @ 06:47 AM EDT

Do you, by any chance, remember the name Victor Raisys? He was a technology analyst at Soundview Technology Group, who predicted difficulties for Linux when the SCO litigation began in 2003. Here's an example:
SCO's suit has "introduced a lot of confusion and uncertainty into the Linux market, which could ... dampen some of the future growth," Victor Raisys, a Soundview Technology Group analyst, told the Raleigh News & Observer. "The SCO lawsuit raises thorny intellectual property issues, and, analysts say, poses the potential for more court battles as other companies assert rights to some of the communal code," the newspaper reported.

Guess where he worked *before* the stint at Soundview? At Microsoft, and not only that, his job was to keep an eye on Linux for Microsoft, according to Dave Winer's 1999 account:

Last week, talking with Victor Raisys, Microsoft's guy watching Linux, a heated conversation -- they were playing the "There have always been a lot of Unixes" tape for me, and I said emphatically, Linux is not Unix....

At the end of the Microsoft conversation they asked what I would do about Linux if I called the shots at Microsoft.

He's listed that same year as one of Microsoft's "Linux 10", "a team at Redmond tasked with the assignment of studying the Linux phenomena and trying to decipher a way to stop it." Is that not a little odd to you?

Here's another example of the types of things Raisys was quoted as saying when SCO first sued IBM in 2003:

A lawsuit filed in Utah last week claims that IBM integrated computer code belonging to another company into the Linux operating system, touching off speculation that the lawsuit could hurt other Linux companies, including Red Hat, the country's largest distributor of the software.

Analysts say the lawsuit, in which Utah-based SCO Group seeks $1 billion in damages from IBM, shows that Linux, a type of open-source software, has a potential Achilles' heel: intellectual property claims....

Red Hat isn't involved in the dispute, but some analysts say that the Raleigh-based company won't be able to escape the fallout.

"It's kind of irrelevant who wins the lawsuit," said Victor Raisys, analyst with Soundview Technology Group in San Francisco. "You can't take back the fact that someone has tried to claim intellectual property on Linux. The genie is out of the bottle."

On Monday, Raisys released a report aimed at investors that said the lawsuit shouldn't be dismissed as another licensing squabble. "Linux customers and vendors will be forced to consider their legal liability due to intellectual property issues," he wrote.

In short, good news for companies that sell proprietary software such as Microsoft, bad news for Red Hat, the report concludes.

Red Hat shares have fallen 6 percent since Friday, when the lawsuit was first reported. On Tuesday, shares closed at $5.51, down 4 cents.

Here's another quotation, in an article titled "Litigation Casts A Shadow Over Linux: Will Uncertainty Slow Adoption?":

Victor Raisys, an analyst at investment firm Soundview Technology Group, a market maker for Linux firm Red Hat, says, "The lawsuit represents more than just a licensing squabble between two companies or the efforts of a small UNIX/Linux company to dig into the deep pockets of IBM."

He says Linux customers will "be forced to consider their legal liability due to intellectual property issues around Linux and open-source software." Raisys says Linux clients are "struck with a lot of uncertainty" and he expects "some firms will put them (Linux deployments) on hold until they get better clarity."

While some commentators argue the simplest solution would be for IBM to buy SCO, Raisys says that's easier said than done. Given that the lawsuit claims more than $1 billion in damages, it's unlikely the shareholders would cough up their shares at the current market cap. "You won't see this thing settled for quite a while."

In 2000, incidentally, when Caldera announced it was going to IPO, Soundview Technology Group was one of the firms underwriting it, as you can see from Steven J. Vaughan-Nichols' account for ZDNet on March 2, 2000:

Like the Linux companies before it, Caldera is offering stock options at IPO prices for "friends and family", or, in Caldera lingo, "friends and business associates". The offer letters, most of which were sent out on 29 February, also went out to Linux developers. It's Caldera plan that, unlike other similar IPOs, stock options will be made available to non-US citizens who are Linux developers. Unfortunately, the offer letters -- from Wit Capital, by way of Caldera -- to US developers, specifically state that the offer is only open to American citizens. This gives the impression that non-US Linux developers cannot get onboard with this IPO. In truth, however, selected Caldera international developers are receiving separate IPO offer notices from Bank of America.

Underwriting Caldera's IPO are Bear, First Security Van Kasper, FleetBoston Robertson Stephens, Soundview Technology Group and Stearns & Co.

The plot thickens. As a side point, I can't help but remember that Bank of America was supposedly the first chosen victim when SCO was looking for an end user defendant, as revealed in the metadata of the complaint against DaimlerChrysler, which showed Bank of America as the defendant, replaced by DC at the last minute. Remember all that? My, there have been so many funny twists and turns in the SCO saga.

Stephen Shankland reported in July of 2001 that while the IPO raised $70 million, thereafter Caldera stock tanked. The story is about a Caldera SEC filing, making it possible for MTI and Tarantella to sell their restricted Caldera stock. But in passing, let's notice something about OpenServer:

Caldera laid off 32 of its employees in April. With the Unix software acquisition, the company now has 619 employees, the company said in the filing.

In its first quarter with the Unix and Linux software products, Caldera hopes to garner $18m to $20m, Bench said. Overall, though, the company expects an operating loss of about $15m to $16m.

One issue the company faces is encouraging customers of its OpenServer product, which the company is no longer developing, to migrate to OpenUnix or OpenLinux products. To encourage this transition and to make the two other products work more similarly, the company will release programming tools in the autumn, Bench said.

"As the two products are integrated, we have two or three fairly major products...that will be released this fall. We believe that solution set will give us a tremendous bridge for our current customer base to move forward on the new platforms," Bench said.

If anyone is the target of some future SCO or Spinoff-of-SCO litigation someday about OpenServer, this detail is for you.

Getting back to Raisys at Soundview in 2003, Raisys was quoted regarding Red Hat's stock:

Red Hat sells services and higher-priced versions of Linux specifically designed for corporate customers. But how far that will take them has been an area of concern for Victor Raisys, analyst with SoundView Technology Group in San Francisco, which has an "underperform" rating on Red Hat's stock.

"Educating people is fairly high on the list of marketing activities they should be engaged in," Raisys said. "But when someone makes a decision that they're going to use Linux, the question we keep asking is: Is Red Hat going to get paid?"

Here's another example, from BusinessWeek on March 3, 2003, in an article titled, "Red Flags for Red Hat":

Soundview Technology analyst Victor Raisys wrote in a Dec. 18 report: "We continue to believe that the current stock price reflects an overly optimistic view of Red Hat's ability to capitalize on the Linux opportunity." Based on estimates that it will earn 6 cents a share in its 2004 fiscal year, its forward price-earnings ratio is a lofty 92. Both Berquist and Raisys rate Red Hat underperform.

Well, the laugh's on Soundview on that. Red Hat has proven to have little difficulty capitalizing on the Linux opportunity, I'd say, despite what seems to me to be endless dissing from analysts.

Here we find Raisys asking a question at a Microsoft presentation by conference call in 2004 on Microsoft's longterm strategy planning regarding servers, and he was by then at Hambrecht:

VICTOR RAISYS (WR Hambrecht & Co.): Hi, Martin.

A quick question for you. Do you have any updated data or studies on the mean time to fix security issues that compare Windows Server 2003 versus Red Hat's enterprise offerings?

MARTIN TAYLOR: I don't have hard-core data. I'd recommend if you go up onto cert.org, they have a fair amount of that data all available. Their community seems to get upset when I say things and so you should go look on the cert.org site and you can do the math. But I don't have that data on top of my head.

VICTOR RAISYS: Great. All right, thanks.

I doubt Microsoft minded that question. To be fair, I also find instances where he spoke less than enthusiastically about Microsoft and less than totally negatively about Red Hat, and he honestly revealed that he personally owned Microsoft stock while he was at Soundview.

I'm a simple soul, and while I realize that odd coincidences do happen in life, I still can't help but notice a man, whose job at Microsoft was to figure out how to stop Linux, showing up at Soundview just when the SCO litigation began, where he mirrored the Microsoft position regarding the threat to Linux SCO represented and dissing Red Hat. In the end, what it all means I'll have to leave to others. My role is research, which I present with links so you can verify and reach your own conclusions.

Update: Raisys later (2005) returned to Microsoft, then went to Dell in 2010.


  


The Victor Raisys Back Story | 204 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections here
Authored by: Erwan on Friday, August 01 2008 @ 06:50 AM EDT
If any

---
Erwan

[ Reply to This | # ]

News Picks Discussions here.
Authored by: Erwan on Friday, August 01 2008 @ 06:50 AM EDT
Please, quote the article's title.

---
Erwan

[ Reply to This | # ]

OT, the Off topic thread
Authored by: Erwan on Friday, August 01 2008 @ 06:51 AM EDT
As usual.

---
Erwan

[ Reply to This | # ]

"In the end, what it all means I'll have to leave to others. " -- Monopoly Jihad
Authored by: webster on Friday, August 01 2008 @ 07:27 AM EDT
.

[ Reply to This | # ]

Why this story?
Authored by: Winter on Friday, August 01 2008 @ 07:34 AM EDT
PJ,

I seem to miss something. Why is this story posted now?

Has there been news related to him?

Or is this just tying up loose ends?

Rob

---
Some say the sun rises in the east, some say it rises in the west; the truth
lies probably somewhere in between.

[ Reply to This | # ]

So did Victor work with Vinod?
Authored by: Aladdin Sane on Friday, August 01 2008 @ 07:45 AM EDT

For the newbies who may have missed it, Halloween I is a fascinating document, probably one of the best Linux advocacy documents ever, considering the source.

I wonder if Halloween I was a production of the "Linux 10" group?

What I want to know is, do we know the names of all the "Linux 10" now?

---
"Experience is what you get when you didn't get what you wanted." --R. Pausch

[ Reply to This | # ]

The many propagandists
Authored by: bbaston on Friday, August 01 2008 @ 09:50 AM EDT
The many propagandists for Microsoft usually appear together - kind of like "the usual suspects". An example includes DiDio and Raisys in this article - which is referenced by PJ as an example of Raisys not always negative and at least disclosing that he owns Microsoft stock.

But I note that he's instead quieting fears on a "sag" in stock prices - and revealing that he owns some Microsoft stock as a "so don't worry" ploy. My emphasis [note SA==Microsoft's corporate customer subscription agreement, rejection of which was suspected of causing the stock dip]:

Victor Raisys, software analyst at investment bank SoundView Technology Group Corp., in San Francisco, agreed that Microsoft faces the challenge of justifying the value of SA to customers.

"With a number of new versions of products coming out this year, customers may choose to take the new versions of products and drop their maintenance agreements since these products most likely won't be updated for a number of years," Raisys wrote in a report released Friday. Raisys owns Microsoft stock.
... ... ...

Still, it is too early to say if buyers are really moving away from Microsoft's software subscription and maintenance schemes. Laura DiDio, a senior analyst with Yankee Group in Boston, said customers are sitting on their wallets and delaying upgrades for as long as possible. However, many users on older versions of Microsoft's software will likely upgrade in the next six to nine months, she said.

Wolves run in packs, don't they? It seems so, both in competitor attacks and in Mothership damage control.

---
IMBW, IANAL2, IMHO, IAVO
imaybewrong, iamnotalawyertoo, inmyhumbleopinion, iamveryold

[ Reply to This | # ]

The Victor Raisys is back at Microsoft
Authored by: Anonymous on Friday, August 01 2008 @ 09:52 AM EDT
Returned to Microsoft Jan 2005, Now Chief of Staff Operating Systems and
Security

[ Reply to This | # ]

I can't believe you found the BofA link
Authored by: Anonymous on Friday, August 01 2008 @ 11:03 AM EDT
Good job,

That is cool. Fantastic research!

[ Reply to This | # ]

The Victor Raisys Back Story
Authored by: Anonymous on Friday, August 01 2008 @ 02:04 PM EDT
Victor may have said a lot of strange and false things however when he is quoted
saying things like:

"We continue to believe that the current stock price reflects an overly
optimistic view of Red Hat's ability to capitalize on the Linux
opportunity."

Based on:

Estimates that Red Hat will earn 6 cents a share in its 2004 fiscal year, and
its forward price-earnings ratio is a lofty 92.

Then I have to agree with Victor. Looking back we can also conclude that Red Hat
has even been close to this predictions.

Dont get me wrong. Red Hat will make a healthy profit from its Linux business
but it will never make a silly profits (like the predictions suggested). There
is simply too much competition amongst the Linux vendors to allow for the kind
of market abuse that is a necessity in order to generate the such profits.

[ Reply to This | # ]

Back the weakest...
Authored by: Anonymous on Friday, August 01 2008 @ 03:44 PM EDT
This reminds me of Watergate. The plumbers, Nixon's dirty tricks team, sabotaged
the strongest Democratic candidates in 1972. Part of their strategy was to cause
infighting between Muskie and Humphrey, the two strongest contenders for the
Democratic nomination. This strategy most likely worked exactly according to
plan for Nixon because he wanted to face McGovern in the general election. After
all of the dirty tricks, McGovern was the last man standing. Nixon won in one of
the biggest landslide of all time.

Is Victor Raisys the G. Gordon Liddy of the SCO debacle? Looks like an apt
comparison. Red Hat was the undisputed Linux leader in 2003, both in volume and
support contracts. Suse was second, with some IBM backing, and a strong European
presence. Caldera was a distant "nth" tier player, maybe not top 5.
Somehow, Raisys picks SCO as the "horse" his financial group is
backing. And all along the way, he has only negative things to say about RedHat,
and collects his SCO stock to boot. I hope he's still got those lottery tickets.
If he cashed out, then can you say, "SEC Investigation."

[ Reply to This | # ]

The Victor Raisys Back Story - Redhat stock down.
Authored by: Anonymous on Friday, August 01 2008 @ 04:14 PM EDT
<sarcasm>
Yep, and the story is still doing damage. Redhat stock today is down nine
cents, even more than the 4 cents in the earlier story, down to 21.29.

I would compare it to SCO stock, but they aren't on Nasdaq anymore. Something
about being delisted during bankruptcy or some such, not clear exactly. Didn't
they have to suspend most of SCO's court cases because of that?

But not to worry. It is so easy to get patents on software now, that there will
be plenty of patents to wipe out Linux with. If it hasn't been patented yet,
someone will figure out a way. Didn't someone patent the not operator or some
such?

</sarcasm>

[ Reply to This | # ]

Its interesting to see the advice of technology analysts - and see if there is a pattern.
Authored by: SilverWave on Friday, August 01 2008 @ 06:26 PM EDT
And of course its fair to point out if their predictions are:

Correct.
Incorrect.
Wrong.
DiDio Level Wrong. (eg a "the world is flat" scale of wrong).

It is also fair to note any coincidences.

Very interesting research PJ.


---
RMS: The 4 Freedoms
0 run the program for any purpose
1 study the source code and change it
2 make copies and distribute them
3 publish modified versions

[ Reply to This | # ]

December 1999 was when Ralph Yarro met Bill Gates in a hotel room in Seattle....
Authored by: Brian S. on Friday, August 01 2008 @ 07:51 PM EDT
and sold out the ailing Ray Noorda by settling Caldera's dispute with Microsoft.

The trial was scheduled to begin on February 1, 2000, in Salt Lake City (Caldera is based in Utah, near Brigham Young University; Microsoft had unsuccessfully sought a change of venue)....To the extent that the Caldera v. Microsoft confidential settlement was noticed, it tended to be viewed as at best a washout, and at worst a betrayal by Caldera. While Caldera explained that it had decided that the DOJ was "in a better position to pursue a public remedy" (Sm@rt Reseller, Jan. 10), the fact remains that there were high hopes for another nice, long trial in which Caldera would air Microsoft's dirty laundry in public.

For example, Dan Gillmor complained in the San Jose Mercury News (Jan. 16) that "Part of the settlement is an agreement to keep the terms and evidence secret. So the public will never get the chance to see just how badly Microsoft did -- or didn't -- behave a decade ago when it was in the middle of its rise to power."

In general, confidential settlements do have just this sort of result....

O'Reilly

[ Reply to This | # ]

A Tale of Three Search Engines
Authored by: Anonymous on Friday, August 01 2008 @ 08:44 PM EDT
The Groklaw story was published at 06:47 AM. At 20:30, searching Google for "Raisys" shows the Groklaw story as the first hit. Searching Yahoo for "Raisys" also shows the Groklaw story as the first hit. Searching Microsoft "Live" for "Raisys" turns up no sign of the Groklaw story at all (at least in the first 20 pages), although Victor Raisys's name shows up in numerous other stories.

Google and Yahoo seem to rank Groklaw highly, while to Microsoft, Groklaw doesn't seem to exist at all. Dear PJ. I think you must have hurt their feelings and they have gone into the corner to sulk. Or perhaps the problem is that they really do need that Yahoo search technology if they hope to ever find search items relevant to their users.

[ Reply to This | # ]

Raisys, an annotated timeline
Authored by: Anonymous on Friday, August 01 2008 @ 09:36 PM EDT
This is a 2005 comment on GL with excellent sources.

[ Reply to This | # ]

Incestuous relationship?
Authored by: Anonymous on Saturday, August 02 2008 @ 03:35 PM EDT
The Register reported eight years ago about "the complex and somewhat incestuous relationship between Caldera, SCO, Microsoft, Citrix, and Novell".

Also, from the same article: "In January, Microsoft sold its entire 12.3 per cent holding in SCO, and the SCO share price began to collapse."; well, I have read about cause and effect, but here I think it was a global recession in the it industry which may have been the actual cause.

One last thing from that article "Caldera is acquiring SCO's Server Software and Professional Services divisions, leaving SCO with Tarantella and the revenue stream from SCO OpenServer."

Yes, I start to agree with Graham Lea, the author of the article, there is an incestuous complexity to this debacle - so OpenServer was never brought along to newSCO (i.e. Caldera, or, the current SCO)?! What was it Microsoft and SUN payed for in 2003? How could newSCO sell that if it was retained by oldSCO (later renamed Tarantella, and even later bought by SUN).



Anyone with a better head than mine?



_________
IMANAL

[ Reply to This | # ]

The Victor Raisys Back Story
Authored by: LaGrosse on Sunday, August 03 2008 @ 09:55 AM EDT
This is not only excellent fact finding, but I would hope the beginnings of an
amicus brief to the courts, the SEC and DoJ.

---
Registered Linux User #292956
windows free since 2003

[ Reply to This | # ]

A professional opinion on Vista
Authored by: dmarker on Sunday, August 03 2008 @ 06:43 PM EDT

Our company is an MS shop when it comes to the desktop. We currently use XP as
our installed OS and recently made the decision not to go to Vista for several
core reasons

1) Would involve a costly refresh of all our hardware for little productivity
gain
2) We concluded after some trials that Vist has too many admin problems to do
with domain admin
3) Vista appears to offer the biggest improvements in the area of HD viewing
& HD graphics support & multimedia experience. This is not a requirement
for our office environments

To be fair to the intent of Vista, it seems MS were forced to break backward
compatibility in order to enforce a more rigorous management of user space in
Windows. I am certain myself this was needed by MS so they can position Windows
for the emerging virtual desktop / virtual application opportunity that we
believe is the future. Our datacenter is running virtual severs as a standard
& we are waiting for virtual desktops & applications to mature.

We are also a Citrix shop & they have painted this future for us & we
believe it is accurate. Their acquisition of Xen Source and the speed with
which they integrated it into their product line has impressed us. Now we are
waiting for it to mature. But, we can see how Linux virtual apps will work but
not Windows virtual apps unless run from a Vista base with its new user space
management & this is why we believe MS has pushed Vista so hard but from our
corporate perspective we aren't buying.

We see Vista as a failure & I suspect MS are in a tough spot in trying to
roll out their desktop visualization strategy. We have seen Citrix demos of a PC
downloading two different versions of Office & running them at the same time
on the PC but without Vista's improved user space management we would not use it
but seeing we aren't buying Vista for the other reasons mentioned, think MS has
a big problem.

Doug Marker



[ Reply to This | # ]

A professional opinion on Vista
Authored by: dmarker on Sunday, August 03 2008 @ 07:01 PM EDT
Our company is an MS shop when it comes to the desktop. We currently use XP as
our installed OS and recently made the decision not to go to Vista for several
core reasons

1) Would involve a costly refresh of all our hardware for little productivity
gain
2) We concluded after some trials that Vista has too many admin problems to do
with domain admin
3) Vista broke too many important apps we use
4) Vista appears to offer the biggest improvements in the area of HD viewing
& HD graphics support & multimedia experience. This is not a requirement
for our office environments.

To be fair to the intent of Vista, it seems MS were forced to break backward
compatibility in order to enforce a more rigorous management of user space in
Windows. I am certain myself this was needed by MS so they can position Windows
for the emerging virtual desktop / virtual application opportunity that we
believe is the future. Our datacenter is running virtual severs as a standard
& we are waiting for virtual desktops & applications to mature.

We are also a Citrix shop & they have painted this future for us & we
believe it is accurate. Their acquisition of Xen Source and the speed with
which they integrated it into their product line has impressed us. Now we are
waiting for it to mature. But, we can see how Linux virtual apps will work but
not Windows virtual apps unless run from a Vista base with its new user space
management & this is why we believe MS has pushed Vista so hard but from our
corporate perspective we aren't buying. MS's Windows registry is proving a
millstone around their neck.

We see Vista as a failure & I suspect MS are in a tough spot in trying to
roll out their desktop visualization strategy. We have seen Citrix demos of a PC
downloading two different versions of Office & running them at the same time
on the PC but without Vista's improved user space management we would not use it
but seeing we aren't buying Vista for the other reasons mentioned, think MS has
a big problem.

Doug Marker



[ Reply to This | # ]

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