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SCO's PR Spin
Monday, November 03 2003 @ 08:15 PM EST

Public relations is not a crime, not in the legal sense of the word. And there is no doubt that the PR firm SCO uses has gotten the company's message out in an effective manner. But what is the message? How truthful is SCO being with the world, including the stock-buying segment of it? Let's take an example from today.

There was a SCO press release that went out over PRNewswire, "SCO Moves up in Rankings, and is Ranked Fourth Overall in the Enterprise Operating System category", which went to various business-oriented media, including Yahoo! Biz, where I found it, saying that SCO had moved up in the VARBusiness 2003 Enterprise Operating System annual report card.

Are you impressed? Thinking maybe you should buy some of their stock? Hold the phone, my friends. It's best not to read only the lead paragraph of a SCO press release. I would like to show you the fine print. First, note that they didn't include a link to the actual report card. Wonder why? Take a look for yourself. Just scan down the list, and you will see they flunked almost every category. Here's a paragraph further down the page in the press release:

"VARBusiness chooses only five companies in the Enterprise Operating System category to survey. This year's fourth place ranking is up from fifth place last year."

So, VARBusiness only tests five companies, Microsoft, Novell, HP, Sun Microsystems, and SCO. Of the five, SCO came in fourth. Last year, they were dead last, so it's true they have "moved up in the rankings" as the headline proclaims, from dead last to one step above dead last. Not quite the impression you formed from the headline, is it?

Yes, but at least all the information is included in the press release, except the link that tells the rest of the story, not that most people read more than the lead paragraph. The press release also has this sentence:

"SCO's reseller and developer channel is one of the most loyal in the industry because of SCO's reseller programs and emphasis on channel sales."

This isn't just a matter of spin. Take a look at this detail they didn't mention. They made another VARBusiness 2003 annual list -- the 2003 ARC Hall of Shame, and here is why:

"SCO should apply some of the money it's shelling out in legal fees in its suit against IBM and Linux users to its channel efforts. The company's ARC scores were a train wreck in the enterprise operating systems category. Who cares what line of code is buried inside some obscure Linux program that can trace its roots to IBM's Unix license dating back to the Partridge Family? SCO partners clearly don't appreciate the company's products. And if the folks at Sun who make and market Solaris are laughing, they had better stop--their scores were even worse."

A train wreck. Something isn't matching up here, is it, with the press release?

Meanwhile, Linux just keeps chugging along, picking up speed. VARBusiness has a nice article about it, as a matter of fact, called "Lining Up For Linux", and the article mentions some new companies who have just made the switch, following in the footsteps of trailblazers Google, Amazon, and Burlington Coat Factory, and it tells some of the reasons why companies are now going Linux:

"Customer spending on Linux is projected to increase from $80 million in 2001 to $280 million by 2006, according to researcher IDC. . . . Examples of this are increasing as Linux vendors report customer wins with businesses of all shapes and sizes for applications such as messaging, file transfers, testing and some productivity and infrastructure support. Case in point: Online video-rental company Netflix recently migrated from Sun's Solaris platform to IBM's hardware running Red Hat Linux software to increase Web performance, search and queuing capabilities for its more than 16,000 DVD titles.

"Other new IBM Linux customers include Marinalife, a small to midsize (SMB) partner that uses Big Blue's KeyLink systems to help boaters reserve dock space in marinas in the United States . . . and NYFix, which operates electronic-trading systems. . . .

"For example, NYFix switched to Linux from a mainframe-based structure because of the problems it had automating its operations on the floor of the New York Stock Exchange. Today, the company runs some 1,500 booths that handle up to 1 billion shares per day.

"'We've been a Unix shop for years, but have been moving to Linux because we need advanced features to guarantee the availability of our connections,' says Jim Strasenburgh, NYFix vice president of systems. 'You'd think you couldn't bet your business on an entry-level Linux operating system, but the opposite has been true.' One of Linux's prime sweet spots is its ability to improve Web-site performance."

Also making the switch are online travel company Orbitz, which switched its 750 servers to Linux from Sun E4500 servers. They use it for their search engine and say they "can't find a server that rivals Apache's for these types of applications". They also mention cutting their cost by a factor of 10, while doubling their capacity, so it's really "a 20-times increase".

Systems integrator Ricis recently switched 900 email clients from Microsoft Exchange and Lotus Notes to SuSE Linux Open Mail Exchange for Ohio Caterpillar, which has 26 locations in the state, and they also use Linux for FTP and DNS applications, on 34 servers. It was "a little more work on the front end to get it up and running, but once you're done, it's rock-solid," they say. Ohio CAT systems administrator Eric Traub is quoted as saying that:

"Linux is much more stable than Windows, which, as we've found out in the past few months, is much more vulnerable. When it comes to firewalling, Linux just does it better."

The article ends by mentioning that Deloitte Consulting deploys Linux for VMWare productivity and testing applications on the East Coast, saving them $500 to $1,000 per box. Are you sitting down? They are "buying the SuSE Linux tools through HP and Lindon, Utah-based solution provider Altiris."

Well, knock me over with a feather. Not the Altiris that is under Canopy Group, by any chance? Why, yes. Yes it is. The very same. And here is a story from July about Altiris' decision to push Linux:

"In 2003, the Lindon, Utah-based IT management systems vendor has been aggressive in developing Linux-only solutions in the server deployment space, according to marketing and product strategy vice president Poul Nielsen. . . . 'We think that Linux will only help the market going forward, because its open-source nature will allow innovations to occur...'"

This is the same Altiris that just announced that they will be selling 5 million shares of common stock - of those 2 million shares on behalf of Canopy Group, by the by. They also recently announced their financial circumstances, including their dependence on HP and Microsoft, and listed this under their Risks section in their S3 last July:

"We expect that software product developers, such as ourselves, will increasingly be subject to infringement claims as the number of products and competitors in the software industry segment grows and the functionality of products in different industry segments overlaps. If third parties assert that our current or future products infringe their proprietary rights, there could be costs associated with defending these claims, whether the claims have merit or not, which could harm our business. Any future claims could harm our relationships with existing customers and may deter future customers from licensing our products."

Amen, brother. So, they know how the litigate-to-damage-your-competition-instead-of-competing-in-the-marketplace game is played in the proprietary world. Why would Canopy Group be interested in killing off Linux when it has so many Linux-oriented companies? It seems uncoordinated at best. But uncoordinated is what Canopy Group companies are not. They are positively inbred. Note this nugget from Canopy's Corporate Services page:

"Corporate Development -- Canopy Group provides a superior level of corporate support to its companies, allowing them to leverage Canopy's legal, financial and human resource services. Canopy legal is responsible for all in-house council, coordination of outside legal council, and assisting Canopy portfolio companies. An on site, team-based, approach allows us to maintain a high level of quality, speed, and integrity in developing and executing transactions."

Let's overlook the mispelling of counsel. Let's think pierce-the-corporate-veil instead, shall we? Who hired Boies, I wonder? And who later decided that SCO needed in-house counsel in addition? Perhaps when you visited Canopy's home page, you noticed that under the heading "Canopy News" the top story is "SCOŽ Announces Immediate Termination of IBM's Right to Use and Distribute AIX Software and Files for Permanent Injunction". That is Canopy news, eh? All in the Family.

Of course, IBM would say that whether SCO had the right to "terminate" their use and distribution of AIX depends on how you read the contract and is yet to be determined.

Speaking of litigating instead of competing, you might enjoy this story. The FTC has hopped on the cluetrain, and they say patents should be harder to get and easier to challenge. This is jaw-dropping wonderful. Let's implement their Eureka moment ASAP. I'm guessing SCO is not only on the same page, it is hoping this becomes the law of the land before 2005 and made retroactive. I, on the other hand, would like it to go into effect the day *after* IBM knocks SCO out with its four patents but before Microsoft decides to make like Attilla the Hun and sue Linus over some goofball patent they claim Linux is violating. We need to time this thing just right.


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