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SCO Files Notice of Cure Amounts Re Leases and Executory Contracts - Ex. A - Updated 2Xs
Thursday, July 09 2009 @ 06:15 AM EDT

There is a monster SCO filing in the bankruptcy, 531 pages, I'm told, a Notice of Cure Amounts in Connection with the Assumption and Assignment of Unexpired Leases and Executory Contracts [PDF] and then a 7-part exhibit. SCO proposes to transfer everything on this list to unXis "free and clear of all liens, claims, encumbrances and interests upon satisfaction of the cure amounts... except for Assumed Liabilities and Permitted Encumbrances".

It is to me one of the most fascinating documents SCO has ever filed. It presents a picture of SCO's business that is very different from what they have presented to the courts. One fascinating thing is that it seems it was possible to get UNIX System V after 1995, despite SCO testimony at trial in SCO v. Novell that after that time period you could only get UNIX by licensing UnixWare.

Forget that you don't think this sales plan will ever happen. It's an opportunity to look at the innards of SCO's business. I went through every page, looking for what new customers, or any updating customers, licensed after 1995. I was curious to see whether UnixWare took off and UNIX drifted down or suddenly stopped after 1995. I had a theory that perhaps SCO didn't want to sell UNIX after that, so as to avoid paying Novell royalties. But what I found instead surprised me greatly.

What I see from these exhibits is that SCO's business slowed noticeably after 1994. I don't know why, but for sure it wasn't Linux. And I think this filing strongly indicates that IBM in no way killed SCO's business beginning in 2000 as SCO alleged in its complaint. It was already declining, judging from this list. Why would anyone want to buy this business, I asked myself? People seem to have lost interest in UNIX and UnixWare around that time period. There are some new customers after that, but it's nothing like the 80s and 90s up until 1995. Of course, by that I mean they lost interest in SCO's UNIX versions. We know UNIX continues to sell well, but I guess new customers mostly chose other vendors. (Update: Readers point out what I didn't think about: 1995 was the year Windows 95 really took off.)

Here are the filings:

07/08/2009 - 832 - Notice of Service /Notice of Cure Amounts in Connection with the Assumption and Assignment of Unexpired Leases and Executory Contracts (related document(s) 815 ) Filed by The SCO Group, Inc.. (Attachments: # 1 Exhibit A Part 1 # 2 Exhibit A Part 2 # 3 Exhibit A Part 3 # 4 Exhibit A Part 4 # 5 Exhibit A Part 5 # 6 Exhibit A Part 6 # 7 Exhibit A Part 7 # 8 Certificate of Service and Service List) (Makowski, Kathleen) (Entered: 07/08/2009)

Executory usually means still live in some way, some part not yet performed, but I don't think that's altogether the case with this list. For example, SCO lists both AutoZone's license on page 5 of Exhibit A Part 1 and Chrysler's 1997 license, presumably not this one, since the dates don't match, in a later page of that exhibit. That's so odd. Neither of them use SCO products any more. Nor are they ever likely to. So, does executory mean litigation to SCO? If so, is unXis interested in litigation? What effect is there if those licenses go to unXis?

Remember Darl McBride testified that the only way to get Unix was to get UnixWare after the mid 1990s? Well, look at this:

  • Computer Associates got UNIX System V Release 4.1 ES Reference Source in July of 1999.

  • Data General got UNIX System V Release 3.X Reference Source in 1999.

  • Cisco on October 2, 2002 licensed UNIX System V Release 3.X Reference Source. The license is CISC2002RS. You'll find it on page 50 of Part 3. That's on Darl's watch. He started at SCO in the summer of 2002.

  • Comnic Corporation got UNIX System V Release 2.0 in 1998. That's in Part 3.

  • Morgan Stanley got UNIX System V Release 4.1ES Reference Source in 1999. That's in Part 5.

  • Entegrity Solutions in 2001 licensed UNIX SYstem V Release 3.X Reference Source. That's in Part 5 also.

  • Grau Data Storagae in 2004 got UNIX System V Release 3.X Reference Source. That's on Darl's watch too, by the way.

  • Network Systems & Technologies in 2001 licensed UNIX System V Release 3.X Reference Source.

  • Northrup Grumman in 2003 also got UNIX System V Release 3.X Reference Source. That would also be on Darl's watch.

  • OTG SOftware in January of 2002 got UNIX System V Release 3.X Reference Source.

  • Pacific Data (no date) got UNIX System V Release 4.2 Reference Source.

  • Quest Software got UNIX System V Release 3.X Reference Source in 1999.

  • SolutionsSoft Systems in 1999 got UNIX System V Release 3.X Reference Source.

  • Tandem Computer licensed UNIX System V Release 4.2MP on December 9, 1998. That is on page 42 of Part 3. Note it wasn't listed as "Reference Source".

  • Los Alamos in 1997 licensed UNIX System V, Release 4.1 Enhanced Security.

  • Trusted Systems on the Net in December of 2002, also on Darl's watch, got UNIX System V Release 3.X Reference Source.
You know what else surprised me? How few customers there were for UNIX System V 4.2MP. See what you think as you go through the exhibits. No doubt you'll notice things I missed.

What else is interesting about what SCO wants unXis to get? In Exhibit A Part 1, I noticed that in the list of "packaged products" I see in 2006 Sun Microsystems is listed as having a "Business Cooperation Agreement" with SCO. 2006? Its 2001 Distributor Agreement is on the list too, p. 13, and Tarantella's 2001 Distributor Agreement. Ditto Microsoft's 1995 Distributor Agreement, on page 12 and on page 17, IBM is listed as having an Engineering Services Agreements in 1990, 2001 and 2004. Ditto Sun in 1998 and its OEM Distributor agreement from 1997 is on the list too, on page 20. IBM also is listed for two OEM Distribution Agreements in 2002 on page 19. Why would unXis want any of that?

And this is weird. On page 18, on the list to be transferred is SCO Software (China) Company's Master Distributor Agreement dated 1999 (Dascom). I thought that SCO China was no more.

And also going to unXis is the 2008 Franklin Covey Product Sales Inc. Business Cooperation Agreement. I thought SCO was going to keep its iPhone app. That is found on page 28. And then at the bottom of the page, there is this:

Novell, Inc.
UNIX SVRX Royalty
collections due July 15, 2009 -- $13,129.51 -- Asset Purchase Agreement -- 1995
Why would that go to unXis? Speaking of cure amounts, Sun is listed on page 29 with a cure amount of $50,000 for Java support in OpenServer. On the next page, the cure amount for Microsoft for Xenix code in "old SVRX" in UnixWare and OpenServer is $44,395.00.

On page 65 of the Part 2 of Exhibit A, Novell is listed as a licensee, and we find the Dec. 6, 1995 Technology License Agreement listed. Why would that transfer and not the rest of the APA? It says the TLA granted Novell limited rights to UNIX and Unixware, which is what Novell has said. SCO has an idea it's about copyrights, but this list doesn't designate it that way.

And remember Bank of America? It turns out that its most recent license was 1992, for "Customer Evaluation (Sept. 4, 1992)" for UNIX System V Release 4.2.

This will all be part of the next hearing on the sales plan in bankruptcy court in Delaware on July 27. The deadline to object is July 22.

Update 2: It might be useful to compare SCO's list of contracts on Exhibit A (here and with Exhibit A continued) with claims made by Darl McBride in the December 22, 2003 4Q teleconference:

Before we move on to today's SCOsource announcements, I'd like to make a few comments on our core Unix operating business. In our OpenServer and UnixWare product lines, we continue to see good uptake from existing customers while attracting new customers in our key vertical markets, which encompass large as well as small to medium businesses. Let me just rattle off a few of the customer deals that we completed transactions with during the previous quarter.

In North America the list would include organizations such as: the Department of Justice, Lockheed Martin, US Air Force, Accent Oil, Goodyear, AT&T, Avaya, CSK Auto, Pinkertons, 84 Lumber, Cracker Barrel Restaurants. McDonald's, GE Aircraft Engines, Daimler-Chrysler, and NASDAQ. To move on to Europe, we are looking at organizations like Barcrest, Marconi, Dolond and Atchison, Fleet Air Army, and Argos; in Germany BMW; out of Italy, Ministry of Finance. Moving on to AsiaPac area: out of Japan, we have companies like Toshiba, Matsushita Electronics, and Image Partner. Out of Taiwan: LCC, Taiwan educational training group. In China: China Central Bank, Peoples Bank of China, Highway Administration, and Shandong Province. In India: India Overseas Bank, Bank of Pakistan, and Bank of India.

I can't help but notice he mentioned DaimlerChrysler. But it said after SCO sued DC that it had not used their software in many years. That seems to be a mismatch right there.

  


SCO Files Notice of Cure Amounts Re Leases and Executory Contracts - Ex. A - Updated 2Xs | 241 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
Corrections thread
Authored by: Aladdin Sane on Thursday, July 09 2009 @ 06:19 AM EDT
Place corrections here.

---
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled. --Richard Feynman

[ Reply to This | # ]

[NP] News Picks discussion
Authored by: Aladdin Sane on Thursday, July 09 2009 @ 06:21 AM EDT
Discuss Groklaw News Picks here. Please say which News Pick you are discussing.

---
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled. --Richard Feynman

[ Reply to This | # ]

[OT] Off Topic discussions
Authored by: Aladdin Sane on Thursday, July 09 2009 @ 06:23 AM EDT
Discuss everything non-article-related else here. Use HTML mode when posting clicky links.

---
For a successful technology, reality must take precedence over public relations, for nature cannot be fooled. --Richard Feynman

[ Reply to This | # ]

SCO - Not an easy company to actually buy stuff from
Authored by: complex_number on Thursday, July 09 2009 @ 07:07 AM EDT
PJ saidWhat I see from these exhibits is that SCO's business slowed noticeably after 1994.

At that time, I worked for Multi Billion Computer Manufacturer and we had a lot of SCO stuff in the pricebook. What stopped us from actually selling any was trying to understand the mess of bits(sorry vital parts) we had to put on the order only for SCO to throw it back at us saying it was incomplete AND not help us sort out the missing bits. It was a real sales nightmare and we soon gave up trying to sell this thing called Unix on X86 computers. We started giving customers this little upstart system called Linux which I personally been using since Slackware 1.1 was released on Floppy.

Talk about shooting themselves in the foot...

---

Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which is of course, "42"

[ Reply to This | # ]

What about the BSD versions of UNIX?
Authored by: complex_number on Thursday, July 09 2009 @ 07:13 AM EDT
The list that is in the article mentions ONLY those who licensed SVR5.
There were other ways to get UNIX.
For example DEC sold a BSD based version of Unix called Ultrix.
Other Companies did the same. Did Darl get challenged about his factually
incorrect statement? I guess not. IMHO, the same applied to a lot of things that
SCO have siad over the years. Sigh, more examples of SCO FUD.


---

Ubuntu & 'apt-get' are not the answer to Life, The Universe & Everything which
is of course, "42"

[ Reply to This | # ]

Employee Termination Costs - in unXis proposal
Authored by: Anonymous on Thursday, July 09 2009 @ 07:35 AM EDT
(Just re-posting a previous note, as was very late in the thread and doesn't
seem to have been covered elsewhere)



ARTICLE IX


EMPLOYMENT MATTERS

9.1. Termination of Employment. Sellers shall terminate the employment of all
Employees identified on Exhibit G hereto effective immediately prior to the
Closing. Effective as of the Closing, Purchaser shall offer employment to each
of the Employees identified on Exhibit G. Employees who accept Purchaser’s
offer
of employment and become employees of Purchaser as of the Closing shall be
referred to as the “Transferred Employees” effective on their initial dates of
employment with Purchaser. All Transferred Employees shall be subject to all
applicable policies and practices of Purchaser. Sellers shall remain liable for
all employee wages, salaries and benefits respecting each Employee arising out
of periods prior to the closing date, including, without limitation, all
benefits accrued as of the Closing.
*******************************

So, does this mean large redundancy/termination payments to all staff,
effectively using up what little funds are still held?

[ Reply to This | # ]

List of licenses after 1995
Authored by: ChrisP on Thursday, July 09 2009 @ 07:37 AM EDT
If you look at these licenses they are all for reference source code, not
runnable binary code. If you look at the APA as amended you will see that SCO
was allowed to supply source code this way without reference or payment to
Novell. I don't see anything odd here.

---
SCO^WM$^WIBM^W, oh bother, no-one paid me to say this.

[ Reply to This | # ]

1995
Authored by: Anonymous on Thursday, July 09 2009 @ 07:40 AM EDT
Of course 1995 was the year that Windows took off. I would have reserved most of
my budget for Win95 too. And it worked pretty well with Novell networks. The
computing landscape was changing then, and once you had lots of graphical
desktop applications, there wasn't so much need to write software for Unix. And
in any case the Unix companies couldn't decide on a single consistent platform
either in terms of an API or a user interface. It's no wonder that SCO's
business nosedived too.

[ Reply to This | # ]

  • 1995 - Authored by: PolR on Thursday, July 09 2009 @ 10:26 AM EDT
  • 1995 - Authored by: grouch on Thursday, July 09 2009 @ 01:29 PM EDT
    • 1995 - Authored by: PolR on Thursday, July 09 2009 @ 03:28 PM EDT
  • 1995 - Authored by: Anonymous on Thursday, July 09 2009 @ 02:20 PM EDT
  • 1995 - Authored by: mnhou on Thursday, July 09 2009 @ 08:08 PM EDT
    • 1995 - Authored by: PolR on Thursday, July 09 2009 @ 09:28 PM EDT
      • 1995 - Authored by: Lazarus on Friday, July 10 2009 @ 12:53 PM EDT
What changed in about 1994
Authored by: Anonymous on Thursday, July 09 2009 @ 07:40 AM EDT

What I see from these exhibits is that SCO's business slowed noticeably after 1994.

Trying to remember what was happening back then, I think there were several trends, not just one, that were impacting SCO's business.

  • Windows NT had been launched: the first version of Windows that could plausibly compete with Unix. People who wanted to migrate from Windows 3.11 to a full 32-bit OS could stay with Microsoft.
  • Sun Microsystems was doing very well, and people who wanted Unix were buying Suns. They were still a lot more expensive than PC boxes, but the price differential was dropping.
  • Competitors in the Unix-on-a-PC market had appeared, for example Microport, that licensed AT&T System V, built it for Intel 80286 and 80386, and resold it. What they were selling was unquestionably System V Unix, and it was cheaper than SCO Unix.
  • SCO was losing momentum - SCO Unix was seen as innovative in the 1980s when it was launched, and it had a clear marketing message, but it didn't come up with anything really new in the early 1990s and no longer had an "innovative" image.

So I don't think it was any one factor - and it certainly had nothing to do with IBM. Doing business in a competitive free market is tough for a small/medium company: if you don't keep innovating technically and marketing aggressively, somebody will eat your lunch. I think that's what happened to SCO.

[ Reply to This | # ]

SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: JamesK on Thursday, July 09 2009 @ 07:56 AM EDT
"There are some new customers after that, but it's nothing like the 80s and
90s up until 1995."

That would be around the time that OS/2 and NT were available and Netware was
going strong. I suspect this simply reflects that there were alternatives to
Unix for many applications.

---
Self Assembling Möbius Strip - See other side for details.

[ Reply to This | # ]

SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: Anonymous on Thursday, July 09 2009 @ 07:57 AM EDT

PJ wrote:

Novell, Inc. UNIX SVRX Royalty collections due July 15, 2009 -- $13,129.51 -- Asset Purchase Agreement -- 1995
Why would that go to unXis?

Three reasons:

  1. Unixware is a derivative work of UNIX SysV under copyright law. UniXis needs the implied copyright license from the APA in order to sell Unixware.
  2. The intent is that in 10 years time, if this saga is still going, all SCO's rights get given to UniXis. I.e. UniXis are buying the right to the continuing tax on Linux users that SCO is trying to impose. See the proposed Unixis APA.
  3. It's an asset and SCO are trying to give all their assets away so IBM/Novell/Red Hat can't get them.

[ Reply to This | # ]

Chrysler Corp. 832-5 P49
Authored by: Anonymous on Thursday, July 09 2009 @ 07:59 AM EDT
Santa Cruz sold UW-2.1 (1997) under AT&T SOFT-01341 (1988)
Who were they trying to duck?

[ Reply to This | # ]

"Remember Darl McBride testified ...."
Authored by: tiger99 on Thursday, July 09 2009 @ 08:17 AM EDT
I am amazed that Novell did not bring that up in Judge Kimball's court. It would
have nicely destroyed Darl's credibility as a witness to just about anything.

[ Reply to This | # ]

At first glance
Authored by: JamesK on Thursday, July 09 2009 @ 08:31 AM EDT
"free and clear of all liens"

I read this as "free and clear of aliens" :-)

---
Self Assembling Möbius Strip - See other side for details.

[ Reply to This | # ]

Reference Source - what is it?
Authored by: sk43 on Thursday, July 09 2009 @ 08:33 AM EDT
Back in 2003 there was a story titled "Agreement No. SOFT-2538 --SCO
Exhibit D -- 'A License for Nothing'"

http://www.groklaw.net/article.php?story=20031108124035847&query=license+for
+nothing

"Santa Cruz Operation Inc. Reference Source Code Agreement No.
SOFT-2538"

That sounds like a lot like what these other licenses are.

[ Reply to This | # ]

SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: greybeard on Thursday, July 09 2009 @ 09:18 AM EDT
FWIW, that Tandem Computers license was a follow-on to several prior source
licenses, rather than something new. It was acquired for the purpose of
providing an MP (multi-processor)version of the OS for Tandem's Integrity
hardware fault tolerant systems that ran System V with Tandem's proprietary
extensions to take advantage of the FT architecture. Tandem originally licensed
UNIX source in 1987-88.

---
-greybeard-

[ Reply to This | # ]

And Novell's approval?
Authored by: hAckz0r on Thursday, July 09 2009 @ 10:27 AM EDT
If any technology related to UNIX is transferred doesn't Novell have to approve
of it? The way I see it, the APA only gave SCOg the right to collect licensing
fees for Novell, and even selling their own technology that contains the UNIX
source code would be illegal if not for Novell permitting it under the
pre-conditions spelled out in the APA. How can SCOg even think to transfer any
technology/source code for which they do not even hold the copyrights for?
Having the right to modify and sell their own version of UNIX does not give them
the right to sell it lock stock and barrel to a third party. By the APA, SCOg is
not even allowed to enter into new licensing agreements much less sell
everything.

---
DRM - As a "solution", it solves the wrong problem; As a "technology" its only
'logically' infeasible.

[ Reply to This | # ]

Would you buy a used software company for this man [darl]?
Authored by: Anonymous on Thursday, July 09 2009 @ 11:26 AM EDT
Cisco on October 2, 2002 licensed UNIX System V Release 3.X Reference Source.
The license is CISC2002RS. You'll find it on page 50 of Part 3. That's on Darl's
watch. He started at SCO in the summer of 2002.

[ Reply to This | # ]

Slow Business - SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: Anonymous on Thursday, July 09 2009 @ 11:29 AM EDT
SCO's business slowed noticeably after 1994

I joined a company in 1994 that sold a product that ran on various versions of
Unix, HP, General Dynamics, IBM, Data General, Dec and SCO Unix.

The general opinion at the time was that the SCO Unix was a problem to work
with.

A few years later when NT became a viable alternative, a number of customers
switched from SCO Unix to Windows NT. (Please don't ask me to justify, I am
just relating the experience.)

In this case, it wasn't Linux that was stealing SCO's customers, but Microsoft
Windows.

[ Reply to This | # ]

An entirely different view of why SCO crashed in 1995
Authored by: Anonymous on Thursday, July 09 2009 @ 01:00 PM EDT
From a certain science-fiction writer who was working there at the time:

http://www.antipope.org/charlie/blog-static/2009/06/how_i_got_h ere_in_the_end_part_3.html

Some key bits there are the fact that in 1995 the CEO retired and was replaced by the CFO -- and, as Charlie says, "Do I need to explain why putting an accountant in charge of a technology-driven company is not necessarily a wise, visionary, and forward-looking move?"

And then there's the punchline -- the book that he found on his line-manager's desk, that convinced him to immediately leave for a new job.

[ Reply to This | # ]

1994 - Hard to get application updates for SCO
Authored by: Anonymous on Thursday, July 09 2009 @ 01:52 PM EDT
I was working in the system sales industry at that time. It was hard to get
updated software for SCO unix at that time. Even if you could get a vendor
commitment, it was impossible to get a timeframe for it.

System support was eclectic, it was hard to find admins for SCO boxes. Other
unix variants paid better to support staff.

It was difficult to sell SCO unix. There were odd approval mechanics within
SCO, that were, at best, inconsistent.

Windows NT was finally stable about that time. Micro$oft was commanding all the
ISV attention, and dollars, for development.

Adding it all up, there were too many minuses, and no real pluses, to buying
SCO. The only compelling factor would be if you already had an existing
application running on SCO. There were some sweet languages on the SCO boxes,
that had proprietary extensions or implementations. Transferring an application
OFF of a SCO box to another platform was a painful experience. (We did it. We
had little choice, there were no forthcoming updates, and we needed some
updates.)

-- Alma

[ Reply to This | # ]

SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: vruz on Thursday, July 09 2009 @ 02:47 PM EDT
That makes sense. It was around the time Microsoft started pushing Windows NT
strongly on workstations as an alternative to Unix-based ones.
So much that the product name was "Windows NT Workstation".
Windows NT would run on 32-bits Intel (IA-32), MIPS R3000/R4000 and Alpha, with
PowerPC, Itanium and AMD64 supported in later releases.
Silicon Graphics was forced to start selling Windows too.
The file sharing capabilities that came built-in in Windows NT were
revolutionary in that you could only get similar ease of use, power and
flexibility from competing products that charged a premium for it, like Novell.
With Windows NT, it came right out of the box.

IBM was perceived as the big blue evil at the time, and Microsoft was the lean,
mean and younger contender.
Microsoft closed the deal when they added the innovative and slicker Windows 95
user interface, in the resulting product that became known as Windows NT 4.0
(immediate predecessor of Windows 2000 (5.0) and Windows XP (5.1).
X-Window workstations from Sun and others costed dearly, Windows NT worked okay
on cheap PCs.
Windows NT originally bundled a POSIX compatibility layer, mandated by US
Government to be considered for any software contracts, and there used to be
products from Microsoft and third parties to build bridges between the Unix and
Windows world. (most notably X-window, Httpd, NFS server software).

At that point it's interesting to note that Novell would charge as much as $1000
for an FTP client.
It's almost a greek tragedy tale that the mature Microsoft have aged to become
the monster they defied to death.


---
--- the vruz

[ Reply to This | # ]

SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: PolR on Thursday, July 09 2009 @ 04:12 PM EDT
May be I have my tin foil too tight. But I have a question to ask.

We know that according to the sales agreement SCOG keeps the litigations and the
assets go to unXis. But how about future litigation?

If all the contracts go to unXis, they can be used to sue. The litigation may
still be used for FUD and harassment. What stops unXis from interpreting any
ruling and settlement imposed on SCOG narrowly so new litigation on
"different" issues is still allowed? It is not like they are building
a viable business with a sound product line. If no sanctions fall on SCOG and
their executives, a path to riches for more shady characters is open. What if
someone decides it does not matter if unXis goes bankrupt if its CEO keeps his
bonuses? As long as the PIPE (as in fairy) doesn't dry out litigation may
continue.

Remember when Goldfarb wanted SCOG to sell its UNIX business and focus all the
cash on the litigation? Had this advice been heeded none of the bankruptcy dance
we have seen would have been possible. But Darl decided to keep the Unix
business and here we are. Is this coincidence? Or is it foresight? Considering
how baseless this whole litigation has been, one may think that an exit strategy
may have been planned as soon as it was clear that IBM wouldn't buy SCOG to make
them go away.

I think these possibilities may explain why IBM decided to issue a subpoena.
They want to know what kind of hydra they are dealing with. The problem with
hydras is there is no use to chop only one head off. You need to cut all of
them.

[ Reply to This | # ]

  • Nope - Authored by: Anonymous on Thursday, July 09 2009 @ 04:52 PM EDT
SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: tanner andrews on Thursday, July 09 2009 @ 06:29 PM EDT
SCO's business slowed noticeably after 1994. I don't know why, but for sure it wasn't Linux

So you say. I was in that business back then. We were one of the important SCO resellers, and I had the (oldSCO) ``ACE'' certification.

I did a fair amount of software development at the time. Linux was admittedly not so far along as it is now; the SMP support was speculative, and device support was limited.

On the other hand, software development worked better under Linux even then. Linux was faster for the same hardware, and it provided a more standards-compliant API for network stuff. I had a lot of #ifdefs for SCO to work around various bugs and infelicities.

Through the later 1990s, I displaced SCO with Linux systems. Yes, you would find those systems primitive today, but keep in mind that I could, even then, do things like run legacy MS-DOS apps under Linux (displaced a bunch of dual-boot SCO boxes), run name servers, mail servers, DHCP servers, and pretty much any other network server you liked.

During that time, SCO worked to make life difficult. The license/activation dance was a nuisance when it worked, and it always took way too long. That made new systems more challenging.

Linux worked to make life easier. No activation hassles. License? GPL. Compiler? GCC, not SCO's crufty old MS compiler. Debugger? GDB, not the old unix debugger.

That's not to say that SCO did not have its good points. Like Linux, it was reliable. Neither system was prone to crash. There were some apps that ran on SCO and were not offered directly for Linux.

Still, my experience was that I could often install Linux instead of SCO, giving the customer a better system for a lower price. The sales critters hated that because their commission for a Linux license was a percentage of $0.

They should have been grateful, because they were (a) selling commissionable hardware (b) taking care of the customer so that he would be there next time (c) selling labor, which was really the value-add in the company. Sales types do not think long term, however, so there was no gratitude.

I cannot have been the only one during the 1990s who was replacing SCO sales with Linux sales. I was one computer guy in a country full of them. By the end of the 1990s, Linux was ubiquitous in server farms.

It was not rare in other production environments, either. A computer guy who needed a server could get a Linux system in under the radar: grab an old box from spares, load up Slackware, and did not have to ask the bean counters for a budget.

It follows that at least part of the decline in SCO sales was directly attributable to Linux. Better product, better price.

---
I am not your lawyer; please ignore above message.

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Random Comments
Authored by: sk43 on Thursday, July 09 2009 @ 09:50 PM EDT
1. Aside from the business contracts in the first half of Part 1, all of these
are source code contracts. Even though the vast majority are
"dormant" (such as the DaimlerChryler one), they have probably never
been formally terminated, which is why they are all listed. Actually, t is
quite remarkable how many organizations obtain licenses of one sort or another.
Tiny colleges obtained source code licenses.

2. In Part 7, there actually is a contract with Microsoft that is listed as
"terminated". Curiously, the contract with Silicon Graphics (Part 3)
is not listed as terminated. Didn't SCO send them a 60-day notice? Perhaps SCO
never followed through.

3. Part 3, p. 41 - Was Tandem's license to Unix System V 4.2 MP (Dec. 9, 1998) a
new SVRX license? Or was it an upgrade under an existing license? This
transaction is listed in Column 5, "Product Supplement". Let us
suppose that Darl is correct. In this case the SVRX license, as defined in the
APA, is Tandem's original Agreement SOFT-00712, dated April 17, 1986. However,
elsewhere SCO has argued that it is the Product Supplement (or later the Product
Schedule) that is the actual license, in which case Darl is wrong (and SCO is in
violation of the APA by issuing new SVRX licenses without Novell's approval).

4. The 2003 Sun licensing agreement (of which part is on appeal in Denver) is an
amendment to the original SOFT-000296, Part 3.

5. Educational licenses to Universities basically ended in 1991-1992. This was
when AT&T spun off USL.

6. Part 2, page 11, it appears that HP, like IBM, never obtained a license for
System V R4. Instead, it stopped at R3.2. (Or am I missing something?)

7. It would seem that the UNIX landscape really changed starting in 1993 when
Novell acquired USL. Before that, AT&T and USL were in the source code
licensing business, with companies such as IBM, HP, Sequent, Santa Cruz, etc,
making money selling binary licenses. Novell, however, was in the binary
licensing business itself and thus a direct competitor to any company who would
purchase a source code license. This factor, perhaps among others, would
explain the decline in source code licenses around 1995. It is not a direct
reflection of the state of SCO's business itself (which had one of its best
years ever in FY99) but is a strong reflection of the state of the "UNIX
ecosystem" in which SCO operated.

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Where Is SOFT-000302?
Authored by: sk43 on Friday, July 10 2009 @ 07:52 AM EDT
This is the original license agreement between Santa Cruz and AT&T. You
might think that it is no longer relevant, but in fact it is referenced in the
Novell/Santa Cruz APA Amendment 1, which is still operative:

---------
1.2(e) Revenues to be Retained by Buyer.
...
4. royalties attributable to the distribution by Buyer and its distributors of
binary copes of SVRX products, to the extent such copies are made by or for
Buyer pursuant to Buyer's own licenses from Seller acquired before the Closing
Date through Software Agreement No. SOFT-000302 and Sublicensing Agreement No.
SUB-000302A.
---------

Surely the new buyer would surely want to have a copy of SOFT-000302, at least
to document which binary royalties it is not obligated to pay to Novell. For
old time's sake.

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SCO Files Notice of Cure Amounts Re Leases and Executory Contracts
Authored by: RPN on Friday, July 10 2009 @ 09:46 AM EDT
My, admittedly limited, direct experience and observation is that ISO 9000 is
badly applied 95%+ of the time and the consultants and auditors are if anything
worse than the implementer. If you get it right and apply it right a fair amount
is commonsense any good company is applying anyway but ISO 9000 gives you a
framework and excuse to document it properly then manage the procedures etc
soundly.

On the other hand if you get it wrong every criticism voiced in the posts above
is absolutely true and more. It is critical you get leadership from the top and
that leadership cuts through the BS that all to readily creeps into any set of
rules, regulations etc. If you don't get that as I've seen myself it doesn't
matter how well the people down the chain try to make it work.

In one company the person who wrote the standards originally did a decent job
and he trained the internal auditors, including me, pretty well but the two
managers above treated it as just another bit of paperwork they had to deal with
so audit issues were never dealt with, the documents were never updated fully,
when the writer retired no one took over managing it and the auditing died. I
pointed out time and again we had no email policy or IT security policy in place
which was crazy, ISO 9000 or not, but nothing happened. The company got taken
over by an even worse ISO9000 follower and died when the parent went bankrupt.
To no ones surprise.

I used to deliver, assess and audit vocational training and that suffers exactly
the same problems. You end up down at the lowest common denominator the awarding
body will tolerate which completely negates the value of the qualifications
because they end up a tick box exercise with a load of paperwork and not a
genuine training. When I first went in years ago it was worthwhile. I've no
interest in going back because of the way it works now and I gather from
business contacts they are increasingly disinterested in the qualifications
involved because they know they have little value. That's a very sad outcome for
everyone.

Richard.

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UNIX System V 4.2MP
Authored by: Anonymous on Friday, July 10 2009 @ 12:05 PM EDT
I don't think that it is that strange that there were few licensees for this,
which is the Multi Processor version.
At that time there were limited venues to run such software.
Tandem would have been one of the few hardware manufacturers that needed this.

It was not like today where most machines have multiple cores.

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