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SCOforum: A Bully Would Like to Change the Subject
Tuesday, August 09 2005 @ 07:10 AM EDT

Remember bullies in school? My memory from seventh grade is that they'd torment you with a gleam in their eye until something threatened them, upon which they'd suggest shaking hands and stopping. Maybe the teacher got wise, or a bigger kid took your side, and suddenly the bully wanted to let bygones be bygones. My super logical brain always found that suggestion insulting, because why would I want to stop just as *they* were about to get *theirs*?

I have always found bullies oddly funny, although decidely not fun, both in swagger mode and in their fear, but their behavior, when they are worried they might suffer a little teeny bit themselves, is the hilarious part. Bullies, I always found, have a low pain threshold themselves, despite nonchalantly dishing out pain to others. So when the pendulum swings, and it always does sooner or later, I find their worried backing away strangely comical.

Thus the news coverage from SCOforum of the current state of mind of The SCO Group made me smile. It seems SCO would like to muffle all that litigation talk. It's hurting business, don't you know. So now that the rape-and-pillage-litigation business model looks to be falling flat on its face, they'd like to drop the talk of litigation, and its consequences, and talk about business, actual tech business, instead. You know. Like having customers for actual products someone might want to actually buy and stuff.

What does that tell me? That maybe they have no confidence their litigation has a chance of succeeding, they see water flooding into their ship, and so they are scurrying about with Plan B, in hopes of staying afloat? That they think we are stupid?

How's this for a headline: "SCO CEO: Even if court bids fail, we will survive," by IDG's China Martens. Sounds like bully flop sweat to me. Has SCO ever before admitted losing could happen? If so, I must have been dozing off. What I remember McBride telling us was that it was win or go out of business and that they'd win. that I think of it, doesn't the latest quarterly mention going out of business as a real possibility if it loses against IBM? So... which is it? I can't keep up. Personally, I tend to believe they tell the truth more so to the SEC, because of the jail time and all if they don't.

Here's why they say they can survive, because "SCO's Unix business is profitable and the company is due to shed its heavy financial burden from legal fees come January 2006." The legal cap is going to keep them in business. And I'm so sure their legal help will be simply outstanding once the law firms are no longer being paid. (Look for Darl McBride's brother to shoulder a heavier load.) I suspect this new message isn't because they suddenly got nice. I think they are trying to reassure their existing customers that they will still be around:

"When we started this and people asked me that question ['What happens if you don't win in court?'] I said, 'As a company, we're screwed,'" Darl McBride, SCO CEO and president said in an interview Friday. "Today, I don't believe that to be the case. We've got a cap on our legal expenses and our Unix business is profitable. If you put that together, you've got long-term sustainability."
Long-term. Let's define our terms. Does "long" mean to the end of time? For a decade? Five years? Or just until IBM and/or Novell and/or Red Hat bleed them dry when they prevail in the litigation and collect damages? That's an appropriate legal term, don't you think? Damages? After all the damage SCO caused? If SCO loses and has to pay all their intended victims damages, will SCO still be in business? Just asking.

That article also gives me the impression that so few were expected to show up this year in Las Vegas, they decided to have many mini-forums, to camoflage the low numbers. They tell it the opposite way, of course. The article puts it this way:
SCO is trying something a little different with the Forum this year, according to McBride. "We're not trying to drive everyone to Vegas," he said. Instead, SCO will take the reseller event on the road as what it calls "geoforums," making stops in Europe, Asia-Pacific and South America after the U.S. event. McBride expects the Las Vegas Forum to likely attract 300-plus attendees, he said.
There was indeed a smaller attendance than last year or the year before, according to Robert Dutt's report:
The show is much smaller affair than the last two because the company says it is making this Forum primarily a North American event, although vice president Jeff Hunsaker did note that 20 countries are represented here, "although in smaller numbers."
Yeah. Right. I remember the newsletter offering free software and a free room if we'd just please go to Las Vegas. Well, maybe not me, personally, but the rest of you would have been welcome. McBride insists SCO isn't anti-Open Source, by the way. His Open Letter yesterday trash talking Linux must have been a mirage in the Nevada desert, then. He clarifies:
"The roots of SCO are tied into open source," McBride said. "My position is very clear, we're not anti open source, Were just against someone taking our products and putting them into open source [software] without our permission."

How do McBride and SCO deal with the odium the litigation has generated within the open-source community? "Ive become very hardened," he said. "At one level, you have to be tough enough to take a lot of verbal shots." He speculates that the goodwill OpenServer 6 is generating in the market might eventually rub off on SCO itself. "It would be nice," he said.

Ah. A wistful bully. Is there anything sweeter? Of course, it would be difficult to be anti-Open Source, when your company depends on it so heavily, something SCO's Erik Hughes tries to justify:
Despite the company's public objection to open source operating systems, Erik Hughes, the company's senior director of product management and strategic alliances addressed the company's controversial inclusion of many open source applications with its operating systems. Indeed, the company somewhat paradoxically includes "hundreds, if not thousands" of open source applications with its operating systems, including Web browsers, database software and graphical environments. But Hughes said there's a difference in the way SCO offers those applications, and the way most Linux vendors offer those applications.

"The important thing is that we support it, we stand behind and we will take a call and deliver fixes where they are needed," Hughes said. "We stand behind it as a complete offering, from the kernel, all the way up to the app server and database server. Our open source strategy shouldn't be a surprise to anybody."

And that is different from Red Hat or Novell how? IBM doesn't offer support? Who are these people talking to? Who is listening? McBride in his Open Letter made it sound like using Linux is like paddling your own canoe upstream, with no reliable support. Remember McBride comparing Linux to volunteer firemen -- sometimes they aren't there? Since when is Red Hat or Novell or IBM, for crying out loud, not there? Are the SCO guys stupid, or do they just think the rest of us are?

Remember that name, Erik Hughes, by the way. We have excerpts from his deposition. It's a job pulling it all together from the paper exhibits, but hopefully soon you'll get to read it.

Jeff Hunsaker shows up, and he is honest enough to admit that the lawsuits hurt them as a tech company:

General manager Jeff Hunsaker of SCO's Unix division acknowledged however that sales have been hurt by the lawsuits. "We can't mix innovation with litigation. The noise that has arisen because of us suing IBM over this issue has been damaging to our core business," Hunsaker told"

Mr. McBride would like some of Windows' business, as he says in this Vnunet interview, and he goes on to suggest a solution instead of litigation:

McBride: We've got a good part of the solution [with SCO's OpenServer 6.0]. But it appears that we are going through this big death match for another few years now. I believe that the people we are competing against even though they put out press releases to the contrary -- know that we have intellectual property problems. They are trying to mask those problems with massive PR campaigns. We are ready to go fight it out, but there probably are other ways to go at this.

Question: What do you mean?

McBride: In terms of the problems we have vis--vis Linux, if the other side would sit down and recognise what these problems are instead of just gloss over them, we would come to a resolution much quicker.

Question: What would such a resolution look like?

McBride: We think we have been damaged pretty severely with respect to our intellectual property. One opportunity is for the people who are out there pushing Linux to sit down and work with us, see how we can get a resolution.

Short of that, we are set to go to the full conclusion. The case is not winding down, it is gearing up. In the mean time we are focused on enhancing and developing the next generation of Unix.

That's clearly a message to IBM/Novell to do a deal, to pay SCO something to make it all stop. But why should they, when they are winning? I have a suggestion. If you would like Linux to recognize a problem, how about showing Linux folks the allegedly infringing code? No? Well, just show it to a judge then, any judge. 1

And as for massive PR campaigns, when was the last time you heard IBM quoted at all about the litigation? The only massive PR campaign I recall is the SCO PR machine. Remember Mr. McBride bringing his scrapbooks of news clippings proudly onstage at the first SCOforum after the IBM lawsuit was filed?

That article is titled "SCO softens its tone". Nah. I remember him talking exactly like that many times before, particularly in the early days. Just give him some money, honey, and he'll go away quietly. Otherwise, it's litigation up your kazoo. Nothing changed there. The usual bully routine.

McBride claims something has changed, in this ComputerWorld article by Todd R. Weiss, "SCO Forum 2005: CEO pledges to focus on innovation":

Even as detractors continue to label SCO as dead in the IT waters because of its two-year-old legal attacks on alleged Unix code infringement inside Linux, CEO and President Darl McBride pumped up his company's core resellers with the message that SCO will prevail.

"There's a lot of folks out there trying to say that SCO's claims are not even alive," McBride told a crowd of several hundred here in the convention center at the MGM Grand Hotel. "Until we get into the courtroom, you're going to continue to see the spread of FUD [fear, uncertainty and doubt] about SCO's legal case and our viability as a company." . . .

But with those legal fees now capped in a deal with its attorneys, SCO's financial picture is brightening, McBride said. "This is a sustainable model at this point," he said. . . . "We do look forward to having our claims heard in that case."

There's a photograph of McBride, by the way, in the Todd Weiss article, and he looks like he's put on quite a bit of weight. I eat when I am stressed too. Another interesting tidbit from that Infoworld article is that SCO hasn't yet done the deposition of IBM Chairman and CEO Sam Palmisano. And there is some very funny McBride baseball bluster talk in response to the Novell counterclaims, with McBride saying Novell is "swinging wildly." More like aiming darts at SCO's eyeballs. Dan Kusnetsky is quoted in the article too, saying that customers rarely mention SCO any more. They are "slipping off the radar."

Eben Moglen was asked to comment, also, and he told Martens:

They ruined a company that had a business and customers that cared. It was a vulgar and selfish thing that has no basis in law and no basis in fact. It's clear to everyone that the whole thing's a sham and a failure."
The last point I noticed is that, according to Darl, their engineers are supportive of their litigation. On page two of the Vnunet interview, McBride says this:
When we pulled back from the war of words, it was hard and it still is hard some days. Even today some of our key engineers look at us and say: "That is ridiculous, false, why are we not fighting this?"
Next time I hear that a SCO engineer is having a hard time looking for a job, I'll feel less compassion, then. As for SCO pulling back from a war of words, I beg to differ. What they did, from my perspective, is outsource most of it to journalists and other SCO-friendly passersby.

Speaking of engineers, Sandy Gupta has been promoted again, according to a new 8K:

On August 8, 2005, the Company promoted Sandeep Gupta to the position of chief technology officer. Mr. Gupta will receive an annual salary of $140,000. Mr. Gupta will continue to be eligible to participate in the Company's 2005 employee incentive bonus program for a maximum target bonus of up to 40% of his base salary, and he may receive an additional bonus for specific product deliverables in addition to the bonus he receives pursuant to the employee incentive bonus program.

The Company also intends to enter into, with Mr. Negris and Mr. Gupta, the Company's standard form of indemnification agreement for executive officers and directors, the form of which has previously been filed with the Securities and Exchange Commission on May 18, 2005, as Exhibit 10.36 to the Company's Post-Effective Amendment No. 1 to Form S-3 on Form S-1.

Heaven knows what he may say at trial, remembering his discredited declaration, but whatever he says, he's indemnified now.

As a pitiful coda, McBride, asked about SCO's customers' reactions to the litigation, said this:

"Generally speaking, our customers are very loyal, some even wish us good luck . . ."
"Some" even wish them good luck. Only "some" of their own customers, folks. They need some luck. That is for sure, because now that the pendulum has swung, none of SCO's victims is likely to stop, now that it's SCO's turn to -- finally -- get theirs.

1Groklaw's ine left the following comment, and it's so funny, I wanted to add it here, so you don't miss it. He answers McBride's call to sit down, recognize the problem, and resolve it:

Dear Mr McBride.

We are sitting down.

We have recognised the problem.

It's you.

Signed: the other side.

PS: still awaiting evidence for your claims ... any evidence, with "specificity" (ask your lawyer to explain that word to you).

PPS: Oh, and bring along the proof of ownership of Unix copyrights, while you are at it.

PPPS: Novell sends their regards and asks if you could bring along any outstanding Unix licence fees, in "full" (your lawyer can probably explain that word to you as well).

Looking forward to the meeting so we can "come to a resolution much quicker".

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