| Is SCO nearing bankruptcy? |
Jan. 09, 2007
Rumors are circulating that The SCO Group Inc. is headed toward bankruptcy. But, is the Unix company that took on IBM, Novell, Red Hat, and the entire Linux world really in danger of going broke?
The latest rash of rumors was triggered by a claim in a recent legal document, Novell Inc.'s Redacted Reply to SCO's Opposition to Novell's Motion for Partial Summary Judgment or Preliminary Injunction (PDF download), that Novell filed in its SCO lawsuit. In it, Novell's lawyers stated that, "For SCO, bankruptcy is inevitable; it characterizes its assets as merely those 'remaining' and does not rebut Novell’s arguments that its bankruptcy is imminent."
Strong words, but it's not really a prediction of imminent doom for SCO when taken in context. The Novell statement is really more in the line of a prophecy if Novell wins its point that SCO owes Novell the revenue from its Microsoft and Sun deals.
Novell is going after the money that SCO has made from its last two major Unix deals. Specifically, Novell wants its share of the payments SCO received from the SVRX [Unix System V Release any] license agreements that it executed in 2003 with Sun and Microsoft. SCO has received at least $25,846,000 from these two companies through its SVRX Licenses. It was this multi-million dollar revenue that fueled SCO's IBM lawsuits.
If, as it does seem likely, Novell wins its contention that SCO owes it royalties, then SCO will be in a world of hurt. But, that's still several months of court action away.
On the other hand, SCO has other, more immediately pressing financial worries. SCO's last reported financial quarter, on Sept. 6, was, in a word, awful.
There's no reason to think that SCO's earnings have gotten any better. Since SCO launched its multi-billion dollar lawsuit against IBM, the company's income has declined quarter after quarter. While SCO reseller partners tell me that they still have plenty of SCO UnixWare and OpenServer support work, sales of SCO's latest Unix, SCO OpenServer 6, have been disappointing.
Financial news reporter Bob Mims recently reported in the Salt Lake City Tribune that "SCO officials have refused to discuss results for the quarter and fiscal year ending Oct. 31 or the scope of workforce reductions that purportedly came in the wake of declining sales."
I've also heard, but I've been unable to confirm, that SCO has laid off some employees.
SCO did not return Linux-Watch.com's requests for further information about these matters. The company promises, though, that it will address these issues and other matters in a conference call after it releases its financial results for the fourth fiscal quarter and year ended Oct. 31, 2006, after the close of the market on Jan. 17, 2007.
-- Steven J. Vaughan-Nichols
Do you have comments on this story?
Talkback here
NOTE: Please post your comments regarding our articles using the above link. Be sure to use this article's title as the "Subject" in your posts. Before you create a new thread, please check to see if a discussion thread is already running on the article you plan to comment on. Thanks!
(Click here for further information)
|
|
|
7 Advantages of D2D Backup
For decades, tape has been the backup medium of choice. But, now, disk-to-disk (D2D) backup is gaining in favor. Learn why you should make the move in this whitepaper.
4 Legal Reasons to Control Internet Access
The Internet is obviously a valuable resource for many organizations. However, many are exposed to legal liability concerns because they fail to control Internet access. Learn if you're safe in this white paper.
Rapidly Resolve J2EE Application Problems
Whether you are in the process of building J2EE applications or have J2EE applications already running in production, you must ensure that they deliver the expected ROI. Learn how in this white paper.
Load Testing 2.0 for Web 2.0
There are many unknowns in stress testing Web 2.0 applications. Find out how to test the performance of Web 2.0 in this white paper.
Build Better Games Online
For the game infrastructure providers, life is complex. Making money from games has become more complicated. Why? Find out in this white paper.
Building a Virtual Infrastructure from Servers to Storage
This white paper discusses the virtual storage solutions that reduce cost, increase storage utilization, and address the challenges of backing up and restoring Server environments.
Gaining Faster Wireless Connections with WiMAX
Welcome to what is quickly becoming the hyperconnected world where anything that would benefit from being connected to the network will be connected. Learn more in this white paper.
Is Your Desktop a Security Threat?
The new wave of sophisticated crimeware not only targets specific companies, but also targets desktops and laptops as backdoor entryways into those business’ operations and resources. Learn how to stay safe in this white paper.
Increasing SAN Reliability by 100 Percent
Storage area networks (SAN) are a strong part of storage plans. Learn how to increase your reliability and uptime by 100 percent in this case study.
|
|
|
|
|
news feed