Beta

Slashdot: News for Nerds

×

Welcome to the Slashdot Beta site -- learn more here. Use the link in the footer or click here to return to the Classic version of Slashdot.

Thank you!

Before you choose to head back to the Classic look of the site, we'd appreciate it if you share your thoughts on the Beta; your feedback is what drives our ongoing development.

Beta is different and we value you taking the time to try it out. Please take a look at the changes we've made in Beta and  learn more about it. Thanks for reading, and for making the site better!

Investment Firm Bids to Buy SCOs UNIX Operations

samzenpus posted more than 6 years ago | from the one-mans-junk dept.

Unix 177

WebCowboy writes "It appears that there are still enough people out there deluded enough to see value in SCOs UNIX operations. York Capital Management has put in a $36 million bid for SCOs UNIX operations. The offer includes coverage of up to $10 million for payment of legal fees and York Capital would assume ownership of the disputed UNIX IP as well as what is left of the lawsuits. Interestingly, SCO has offered this up for competitive bid (who would want to though?). Upon completion of the transaction, should bankruptcy court approve, SCOX would become solely a mobile applications provider (which is the only part of SCOs offerings that have undergone any meaningful development for quite some time)."

cancel ×

177 comments

Does this not screw Novell? (4, Interesting)

WindBourne (631190) | more than 6 years ago | (#21110729)

As it is, SCO owes Novell loads of money. Can Novell stop this sale and/or get the money?

Re:Does this not screw Novell? (1)

Hathor's Dad (983147) | more than 6 years ago | (#21110819)

The issue is that there appears to be some 'value' on the entity. It might be the brand UNIX or it might be the IP (and a way of moving the IP w/o moving existing 'easements'. Once some ties are cut then perhaps they have some enforceable IP...

enforceable IP? (1)

Joseph_Daniel_Zukige (807773) | more than 6 years ago | (#21111535)

impossible, but microsoft will try to make it look that way.

Re:Does this not screw Novell? (1)

morgan_greywolf (835522) | more than 6 years ago | (#21111755)

It might be the brand UNIX
SCO doesn't own the brand 'UNIX'. That honor goes to The Open Group [google.com] .

Re:Does this not screw Novell? (1)

Rogerborg (306625) | more than 6 years ago | (#21111261)

Tune in next week to find out!

Seriously, if this were fiction, it would be a breakout show. I was thinking maybe Heather Graham as PJ, and (bear with me) Casper Van Dien as Darl. I think he's got serious slimy bad guy potential.

Re:Does this not screw Novell? (2, Funny)

lenski (96498) | more than 6 years ago | (#21112653)

Seriously, if this were fiction, it would be a breakout show.
If someone submitted this story to an editor, it would be summarily rejected as implausible. Much like many other stories in our society... The truth is stranger than fiction. Casper van Dien? Very creative casting choice! :-)

Re:Does this not screw Novell? (5, Insightful)

mce (509) | more than 6 years ago | (#21111337)

Actually, at least based on the limited info I have seen, from a purely financial point of view Novell should be happy. SCO does not have the money that it owes Novell, but YCM does. So, actually, I wouldn't be surprised to find out later that Novell helped to set it all up.

Please note that the deal will cost YCM more than $36m, so their valuation of the thing they'd be acquiring must be considerably higher as well.

  • If they behave sensibly, they will stop the lawsuits and pay Novell (that is: on top of the $36m). Next they will need to spend some money to clean up the mess and carve up the pieces. Only after that has been resolved, can they think of selling the viable bits and making a profit.

  • If they do not behave sensibly, they will continue the lawsuits and loose more money in the process (e.g. on legal fees). Even if they think they still have a chance of winning something along the way, they sure know very well that odds are against them and they will have taken that into account during their risk calculations while valueing SCO.

Companies such as YCM do not step into a very risky deal like this one without a clear view on a sizeable return on investment that would compensate for all the risk. I have a feeling that a few years from now the YCM-SCO example might become standard case study in business schools.

100% incorrect. (2, Informative)

poetmatt (793785) | more than 6 years ago | (#21112069)

Wrong. The liability for the lawsuit would not be transferred by the deal, so YCM would take everything BUT the lawsuit's liability, therefore making them "magically liable for nothing". Thats why YCM wants to do this deal, they get no risk out of it other than managing a company. Also look a little deeper, YCM has some ties to microsoft.

Re:100% incorrect. (1)

mce (509) | more than 6 years ago | (#21112663)

TFA claims that YCM would also get the litigation claims, and that's what I used as a basis. Yes, I tend to RTFA before posting.

But in any case, what I wrote cannot be "100% wrong", as you claim with assumed god-like superiority. Irrespective of their motives and who is behind it (I personally don't believe the "it has to be MS" FUD party line myself, but who knows maybe I'm actually wrong on that one...), fact remains that firms like YCM do not step into risks - be they major or only reasonable - without prior analysis and an outlook on a sizeable ROI.

Re:Does this not screw Novell? (1)

jez9999 (618189) | more than 6 years ago | (#21112079)

Next they will need to spend some money to clean up the mess and carve up the pieces.

The only question I have is, how do you carve up a dog turd? Wouldn't it at least be a waste of a knife?

Re:Does this not screw Novell? (2, Interesting)

oliverthered (187439) | more than 6 years ago | (#21111373)

If SCO owes Novell loads of money, more money than SCO is worth then why can't Novell just take over SCO?

Re:Does this not screw Novell? (2, Insightful)

sortius_nod (1080919) | more than 6 years ago | (#21111527)

I don't think Novell has any desire to take over a stagnant company.

Re:Does this not screw Novell? (1)

mrsmiggs (1013037) | more than 6 years ago | (#21111609)

Novell doesn't want anything SCO has it wants the money, if I understand this correctly. With this agreement Novell gets the money and SCO might get to live again so everyone is happy (from a business perspective anyway).

Re:Does this not screw Novell? (1)

joshv (13017) | more than 6 years ago | (#21111409)

Most likely any sales agreement will also include a settlement with Novell. The new owners will pony up enough money to make everybody happy, rather than run the risk of open ended litigation and damages.

Doesn't it lool very suspicious? (1)

pablochacin (1061488) | more than 6 years ago | (#21111561)

I mean, what is the REAL business case for buying a company which only "assets" are some IP rights that they apparently do not own after all. It looks to me that some one else is pulling the strings behin escenes to continue the litigation agaist Linux.

Re:Doesn't it lool very suspicious? (2, Insightful)

Wdomburg (141264) | more than 6 years ago | (#21112041)

They have OpenServer and Unixware which contain IP beyond the SVR4. They still have a significant installed base of vertical applications (particularly in point of sale and telephony applications). It's emphatically not a growing concern but there's plenty of money to be made in support contracts and migration services for the right company.

If memory serves (1)

HangingChad (677530) | more than 6 years ago | (#21112375)

The APA, the agreement managing SCO and Novell's working relationship as it pertains to Unix, stipulates that in the event of bankruptcy the ownership rights shift back to Novell. I don't think SCO can sell them if they wanted to.

And why would YCM want to take on the potential liability of the counter-claims against SCO? That makes no sense. Sounds like they want to try to take the meat and leave the potatoes. I doubt that will fly with the BK court.

Interestingly coincidental that the sales price is the exact same amount as the converted funds SCO took, isn't it? What are the odds?

I wonder how long it will take for the FOSS community to find the links between YCM and Microsoft?

Re:If memory serves (1)

jrumney (197329) | more than 6 years ago | (#21112693)

I wonder how long it will take for the FOSS community to find the links between YCM and Microsoft?

See groklaw (search the comments for Acacia to see the full set of links in this triangle). It took less than the time it took for the story to be posted to slashdot.

Well (5, Funny)

mastershake_phd (1050150) | more than 6 years ago | (#21110731)

Theres a sucker born every minute. Actually with 6 billion people in the world these days its probably 10 suckers every minute.

Re:Well (1)

WgT2 (591074) | more than 6 years ago | (#21110955)

Either ol' Daryl is a good salesman or those investors are idiots....

it might be both!

Re:Well (-1, Troll)

marafa (745042) | more than 6 years ago | (#21111041)

conspiracy theory #123456:
does microsoft have a hand in this too?

Re:Well (1)

amchugh (116330) | more than 6 years ago | (#21111695)

Overdeveloped brain region responsible for optimism discovered.

SCO used to be really good. (2, Interesting)

Gordonjcp (186804) | more than 6 years ago | (#21110743)

The name is pretty tarnished now, though. I wonder if there's any money in buying up the name and creating a "New SCO"?

Probably not, but I'm sure someone thinks it's worth a shot.

Tell you what, I'll give then 50 quid cash-in-hand for the rights to the name.

Re:SCO used to be really good. (5, Interesting)

BadAnalogyGuy (945258) | more than 6 years ago | (#21110769)

York Capital Management is a hedge fund management outfit. They are not going to be breathe any life into SCO. They are going to tear it apart and sell off what they can and try to make a profit over and beyond the 30+ million they are intending to invest.

If they didn't see any upside here, they wouldn't have made the offer. You can bet SCO's got something of value that York will be able to sell off at a tidy profit.

Re:SCO used to be really good. (3, Interesting)

Calinous (985536) | more than 6 years ago | (#21110845)

Support contract for already installed Point Of Sale devices. This is the only SCO operation I know of, that was workable.
      They could compete against Microsoft based on price in this sector.
      There might be other places with installed SCO base - and there is money to be had from there, either from continuing support or from help with migration to another platform

Re:SCO used to be really good. (2, Interesting)

BadAnalogyGuy (945258) | more than 6 years ago | (#21110875)

Are you listening? They are not going to run the company after the purchase. They are going to carve it up and sell off all the assets.

They are not in the business of running businesses. They buy distressed businesses at a steep discount and destroy them for a profit.

Re:SCO used to be really good. (4, Informative)

mce (509) | more than 6 years ago | (#21110959)

I can't know whether he's listening, but for York Capital Management to make a profit out of the operation, they need something viable they can sell. The parent post is in essence pointing at the support contracts for already installed POS devices as that viable thing.

Re:SCO used to be really good. (1)

pablochacin (1061488) | more than 6 years ago | (#21111583)

Well, you are supposing they want to make a profit. Maybe they just want to keep this show going on . . .

Re:SCO used to be really good. (1)

mce (509) | more than 6 years ago | (#21111763)

Capital management firms like YCM care about nothing else than making a decent/good profit. They don't even go after the peanut-sized profits.

Re:SCO used to be really good. (1)

morgan_greywolf (835522) | more than 6 years ago | (#21111793)

Exactly. They'll sell off the support contracts to some other business that specializes in IT services -- possibly even, in an irony of ironies, IBM. :)

Re:SCO used to be really good. (1)

bstone (145356) | more than 6 years ago | (#21112405)

Support revenue has been about $5M/year, dropping by about 20%/year, with costs of about half of that (before administration, marketing and overhead). Even at the current rate of decline, that's a $2M/yr revenue stream in five years, and it's going to drop faster than that now. If costs of providing it go up (it will be really unique knowledge), and overhead stays the same, it only loses $3-4M/year. They don't make money on it now. Would you pay $36M for a business that can expect gross revenues under $20M over the next five years, with costs probably double that amount?

Re:SCO used to be really good. (1)

morgan_greywolf (835522) | more than 6 years ago | (#21112567)

Yes, but there are other aspects of their UNIX business as well. There's SCO OpenServer, UnixWare, and OpenLinux all of which are worth at least something. Plus SCO has a bunch of proprietary UNIX apps. York will be selling off the pieces one-by-one. Together they don't amount to much, but the individual pieces (like the support contracts and the IP rights mentioned above) will probably fetch something. Whether they'll all fetch more than $36 megabucks is York's problem.

Re:SCO used to be really good. (1)

bstone (145356) | more than 6 years ago | (#21112051)

There is nothing left worth selling. SCO has bludgeoned UnixWare and Open Server to death. They have lost a total of $250 million running the company for the last seven years (of course $100M or so was thrown away on fantasies of lawsuits), and the product hasn't been maintained for years. The only customers are those stuck with legacy systems with proprietary hardware/software that can't be replaced easily. The only way to ever get any new customers would be for a trusted company to put massive amounts of development effort into building a new product out of it. Even then, the product is horribly overpriced, and even at those prices it hasn't shown any profits. Now it's competing against Linux and Microsoft solutions in their core business areas. Nobody is going to resurrect the SCO Unix line.

There is nothing there to break up into profitable pieces. The SCO Unix line is dead, and they have been pushing their "mobile" business as the hope for the future for years. Unfortunately, they have never shown a dime of income (let alone profits) on their balance sheets for any of it. They've never shown a dime of R&D expenses for it either. Nevertheless, Darl has fantasized about "if we only took 20% of the mobile market", we could make billions. If I only had 20% of the gold in Fort Knox, I'd be rich too, but my plan is missing the same piece that Darl's is missing.

Someone wants to pay $36M to take over the books and records of what's left of SCO, and perhaps to fund the legal FUD campaign for a while longer. I predict that any records of illegal activity will be "lost" soon after the transfer, perhaps in an unfortunate warehouse fire or miscommunication with a document destruction company, and the "software business" will never receive funding of any sort. Current customers are out of luck as the support line will be staffed by a kid who asks if you want fries with that.

Re:SCO used to be really good. (1)

ThirdPrize (938147) | more than 6 years ago | (#21110975)

Office equiptment? Must be a hell of a lot.

Re:SCO used to be really good. (1)

rucs_hack (784150) | more than 6 years ago | (#21111471)

well for one thing theres that huge rack that IBM sent them full of their version control system, that's got to be worth something.

Re:SCO used to be really good. (1)

dan the person (93490) | more than 6 years ago | (#21111189)

They are not going to be breathe any life into SCO. They are going to tear it apart and sell off what they can

In other words, the are going try and breathe life back into those parts that look like they might have a chance of survival.

Better than everything going down with the ship.

Re:SCO used to be really good. (1)

Opportunist (166417) | more than 6 years ago | (#21111423)

Yup. And everyone will hate it, so they will claim they switch back to the old kind, call it "classic SCO" but actually they just replaced Darl with someone even slimier.

It's a joke? (3, Funny)

sm62704 (957197) | more than 6 years ago | (#21111831)

I googled "York Capital Management", the 2nd hit was their "about us" [yorkcapital.com] page. At the very top of the page it says "YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK"

Isn't that Curly Howard [wikipedia.org] of the Three Stooges [wikipedia.org] fame's laugh?

It's getting a laugh out of me! YORK YORK YORK YORK YORK YORK YORK YORK YORK YORK!

-mcgrew

Golden parachute (1, Interesting)

greg_barton (5551) | more than 6 years ago | (#21110763)

It's a golden parachute. Follow the money.

Re:Golden parachute (5, Funny)

Cheesey (70139) | more than 6 years ago | (#21111167)

They're going to throw Darl out of a plane, strapped to a large chunk of heavy metal?

Well, that's got to be worth $30 million.

Can we also make him wear a T-shirt saying something like "I tried to fix my obsolete business model using litigation", then drop him near the RIAA headquarters?

Re:Golden parachute (1)

Opportunist (166417) | more than 6 years ago | (#21111429)

Can we also make him wear a T-shirt saying something like "I tried to fix my obsolete business model using litigation", then drop him near the RIAA headquarters?

Near? For 30 mio I kinda expect that they can afford hiring experts that know how to hit their target!

Re:Golden parachute (1)

Simon Brooke (45012) | more than 6 years ago | (#21111475)

Near? For 30 mio I kinda expect that they can afford hiring experts that know how to hit their target!

Where you going to hire that kind of talent [bbc.co.uk] ?

There's probably something there (4, Interesting)

simong (32944) | more than 6 years ago | (#21110775)

I just hope that the bidder doesn't think that it's the IP. There is probably enough SCO support work out there to make a viable business though, if there are people who are still paying for their support.

Re:There's probably something there (1)

jnelson4765 (845296) | more than 6 years ago | (#21111225)

Heh - I'd port the stuff to Xen, or make sure it plays nice with VMWare. SCO's stuff is legacy, and definitely not being used for much new software. On the other hand, there are a lot of small to medium sized businesses that can't afford to port their data to new software, so there will be a need for at least some presence of SCO (or a successor) for a long time.

Wonder if it'll run in qemu :)

Re:There's probably something there (0)

Anonymous Coward | more than 6 years ago | (#21111251)

What I want to know is why does SCO's website say the following blatant lie?

The company is obviously disappointed with the ruling issued last Friday. However, the court clearly determined that SCO owns the copyrights to the technology developed or derived by SCO after Novell transferred the assets to SCO in 1995.

The court clearly said that Novell owns Unix, they never transferred the Unix IP to SCO.

Source: http://sco.com/company/news/statement.html [sco.com]

Re:There's probably something there (1)

mattpalmer1086 (707360) | more than 6 years ago | (#21111323)

That's just misdirection and spin. The court agrees that all the things SCO actually wrote themselves, they own the copyright to. Err... wow... On the other hand, the court also said they don't own the copyrights to Unix, the actual subject of the court case.

A bit like a criminal convicted of theft saying "but the court agrees that anything I made myself, is really mine!".

(Sorry to make a theft/copyright *analogy* here - they aren't the same crime, before anyone leaps in).

Re:There's probably something there (2, Interesting)

sm62704 (957197) | more than 6 years ago | (#21111933)

I just hope that the bidder doesn't think that it's the IP

I hope they do. They're vulture capitalists; they buy out companies, carve them up, and sell off the assets. When I worked at Disney in the early 80s, Reagan pushed through a huge capital gains tax cut, which was followed by an orgy of buyouts. See, the capitao gains tax is a tax on businesses that are sold. This tax is an incentive to NOT sell a company.

Vultures like this got filthy rich, while working people suffered. One of these sleazeball outfits tried to buy Disney to sell its real estate and IP, etc. All of us poor working schmucks got our hours cut back from 40 a week to 30 a week so the company (whose upper management never lost a dime) fought the buyout.

These companies are pure evil. Anything bad that happens to them causes me to heartily cheer.

-mcgrew

Re:There's probably something there (0)

Anonymous Coward | more than 6 years ago | (#21112615)

Alot of SCO support is shops outside of SCO that pay a fee to SCO to be 'SCO authorized'.

And the number of shops that have the SCO Authorized badge are shrinking.

ties to MS/Baystar? (4, Interesting)

nietsch (112711) | more than 6 years ago | (#21110805)

I wonder how many degrees of separation there are between this new firm and Microsoft? MS has employed some wonderfull machinations in the past to further fuel tSCOg legal battle, and now when the battle is finally lost, up comes another firm offering some golden parachutes to the management?
Somehow I remain unconvinced that those responsible will be punished. The nuclear option seems pretty good to me, but I don't think the US would appreciate a 30 mile crater where Redmond used to be.

Re:ties to MS/Baystar? (2, Insightful)

WindBourne (631190) | more than 6 years ago | (#21110855)

Considering that Boeing, MS and Hollywood are America's biggest exports, probably not. And boeing is about to be a lot less (they have shifted a number of jobs offshore to help sales; basically they were forced to copy Airbus's model, since airbus did this to get sales). And there is more resistance these days to Hollywood's copyright extensions. So, no, the feds are not going to allow it (though plenty of Americans would go along with it).

For once (4, Funny)

clickclickdrone (964164) | more than 6 years ago | (#21110843)

The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.

Re:For once (2, Funny)

NoodleSlayer (603762) | more than 6 years ago | (#21110923)

You just need more question marks in this case.

Re:For once (2, Insightful)

MLease (652529) | more than 6 years ago | (#21110979)

You mean instead of the "Profit!" line?

-Mike

Re:For once (4, Informative)

muffen (321442) | more than 6 years ago | (#21111051)

The old /. joke expressed as 4 lines that end with 'Profit' is not really applicable.

It's actually a three-line joke from Southpark.

The kids follow the underpants gnomes, and when ask why the underpant-gnomes are stealing people's underpants, they show a big board where it says:

1) Collect Underpants. 2) ??? 3) Profit

Everytime the kids ask what step two is, they get the answer that step three is profit.

It's imho the best episode of southpark, you should definitely watch it!

Re:For once (2, Informative)

kripkenstein (913150) | more than 6 years ago | (#21111155)

Indeed, excellent episode. Now, if only there was some place online - a website of sorts - where you could view the relevant part of the episode [youtube.com] ;)

Re:For once (1)

leuk_he (194174) | more than 6 years ago | (#21111285)

Are you sure that Southpark is the source and did not use slahsdot as a source? Can you dig deep in the bowels of slahsdot and fin the first 1.2.3. and confirm it is after the first broadcast of southpark?

that episode is from http://en.wikipedia.org/wiki/Underpants_Gnomes [wikipedia.org] december 1998.

Re:For once (1)

LaminatorX (410794) | more than 6 years ago | (#21112057)

That's an old South Park joke, you insensitive clod!

Capital Management (4, Interesting)

WibbleOnMars (1129233) | more than 6 years ago | (#21110867)

This is basically a private equity buyout. Private Equity is the big buzzword in the world of big money at the moment. What generally happens is that the buyer sees a company which it feels is underperforming and has a depressed share price, and offers a good enough price for it that the shareholders can't refuse. The money all comes from bank loans, which are secured on the company being bought -- a bit like a mortgage is secured on the house you're buying -- so as long as the bank agrees to the loan, it doesn't actually cost the buying company anything up-front. Once the purchase has gone through, they buying company needs to get the money to pay off the loan. This money comes from making savings at the company they've bought. Typically this would mean asset stripping, re-organising, selling off product lines and divisions, or whatever else it takes to make the money back. Wholesale redundancies are also almost certain. When a reasonably solid, viable company is bought out by private equity, they usually end up getting transformed into a much leaner and smaller company, and getting sold on again in the space of a couple of years. When it happens to a company that isn't solid and viable, the private equity firm will generally just sell off all the assets of the company, aiming to make a profit on the purchase price, and then quietly close down the husk that remains. This is what I predict will happen in this case. The buyer is looking at the assets -- the Unix operating system, the patents, licenses, and all the rest, and they've decided that it's worth more than $36 million. Of course, the strategy only works if there are people out there willing to buy the assets for more than $36 million. I suspect there probably are. Even with the lawsuit results, there is enough left to cherry pick. You can be pretty certain they'll get rid of the lawsuits as quickly as they can; they're paying a block of lawyer fees up front to secure the purchase, but they won't want to pay any more, as it'll eat into the profitability of their bid. The law suits would require a long-term strategy, but a buyout like this will be geared solely toward making a short-term profit. The asset management company certainly won't be buying any of their debts, so the $36 million goes to the remaining SCO company (SCO Mobile? I guess they'll rename themselves to try to get rid of the burden of the name SCO). Pays off their lawyer bills, pays off their debts to Novell and other creditors, maybe even leaves them with a few pennies to rub together at the end if they're lucky, leaving SCO Mobile as a theoretically viable (albeit not particularly valuable) company.

Re:Capital Management (1)

neillewis (137544) | more than 6 years ago | (#21110953)

Unfortunately despite all their bluster they didn't have any patents and Novell now claims copyright on Unix. Caveat emptor.

Re:Capital Management (2, Interesting)

junklight (183583) | more than 6 years ago | (#21110971)

The thing is SCOX has a market cap of around $5m at present. So a hostile takeover would cost considerably less than $36m. So how is this good value fo r the equity company and its investors?

Re:Capital Management (2, Informative)

WibbleOnMars (1129233) | more than 6 years ago | (#21111035)

The thing is SCOX has a market cap of around $5m at present. So a hostile takeover would cost considerably less than $36m. So how is this good value fo r the equity company and its investors? Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)

Re:Capital Management (2, Informative)

mce (509) | more than 6 years ago | (#21111121)

Because they're just buying the assets and not the debts, bad name, lawsuits, etc. SCO gets to keep all that junk. ;-)

Which as such would seem like good news for Novell, because then there would be $36m more to grab from the SCO corpse.

However, TFA clearly states that YCM would be taking over the litigation claims as well. The whole idea is that said SCO corpse actually remains viable by focusing on something other than UNIX and litigation. Novell will then need to collect the money it is due from YCM (which is a good thing for them as well, since YCM actually has that money).

The thing that I don't like about this scheme, is that YCM will (wisely) withdraw all the lawsuits before focusing on making a profit out of the deal. This means that at the end of the whole 4 year mess, there will be no clear verdict stating how badly SCO has behaved.

Re:Capital Management (1)

stevey (64018) | more than 6 years ago | (#21111349)

The thing that I don't like about this scheme, is that YCM will (wisely) withdraw all the lawsuits before focusing on making a profit out of the deal. This means that at the end of the whole 4 year mess, there will be no clear verdict stating how badly SCO has behaved.

The thing is I'm not sure they can.

Whilst they could certainly drop the lawsuit against IBM they are still going to be liable for the counter-claims IBM and Novell (and redhat?) filed against them - and they can't force those to be dropped. Especially if Novell are keen on getting the money they are owed.

Re:Capital Management (1)

mce (509) | more than 6 years ago | (#21111411)

They could try to settle the counterclaims. Sure, they have no full control over that, but than again they may not need to have that. See also an other post of mine [slashdot.org] .

Re:Capital Management (1)

n3tcat (664243) | more than 6 years ago | (#21111305)

less hostility = better karma?

They just bought all of SCO's bad karma. Why would they add more?

A tad biased (3, Interesting)

Anonymous Coward | more than 6 years ago | (#21110993)

You know, it's articles like these which demonstrate why Slashdot's become less than necessary reading these days.

Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright. They weren't fashionable, but, they have a working kernel and standard user-land utilities. Obviously, the SCO IP isn't quite as fresh as it once was, but, there'd still be gems to be mined. They also (still) have a (declining, but, still present) bucket of support contracts.

In a market where Facebook (without an obvious revenue stream) is valued in the billions, you'd have to be an unbalanced zealot to suggest they couldn't raise $34M for their entire UNIX related IP collection. Sure, it's not been selling well in the last couple of years, but, you should never judge the quality of a product by the skills of the salesmen.

Re:A tad biased (1)

Alioth (221270) | more than 6 years ago | (#21111057)

But what IP does SCO actually own? It's already been established that SCO are merely a toll collector for Unix, it's Novell who still actually owns it.

Re:A tad biased (1)

JasterBobaMereel (1102861) | more than 6 years ago | (#21111067)

The problem is they have a court case the shows the IP is not used elsewhere, and does not appear to give any special advantage. The case also showed they do not own Unix (not even the name) and so what do they have to sell? It seems they just have (a rather tainted) version of unix that does not have any special features and is not widely used....?

They do however have large debts and a very suspect reputation ... not the kind of company that is very saleable

Time moves fast in IT (3, Insightful)

SmallFurryCreature (593017) | more than 6 years ago | (#21111499)

Its unix was never a top contender. It sure as hell ain't a Solaris. SCO ain't no IBM, it ain't even a HP. If you want cheap, there is Red Hat or any of the other Linux distros. So what is the value of UnixWare/OpenServer?

You don't get the support of IBM, you don't get the sheer robustness of Solaris, you don't get the opensource from Linux, you just pay more then Linux, get less support then from IBM, and a WHOLE lot less robust not just then Solaris, but ALL the other unixes as well. SCO unix is a dump. NOBODY LIKES IT.

The only thing that has going for it that it has a large install base for historical reasons, point-of-sale (cash register systems, fast food checkouts), who are often reluctant to switch. IT in this sector is always a mess, things never work, are always delayed and cost a fortune, so when a system finally operates, they don't want to change (nor need too, cash register technology really doesn't advance that much).

Don't forget that SCO hasn't been doing any development on their closed source unix versions, they were a linux shop too once.

Basically current IT strategy (HA) is for everyone who can to move away from SCO. Get that crap out of there at the next upgrade cycle. It never was a good product, has been neglected and the company has proved to be lead by the truly insane. They SUED their OWN PAYING customers. You don't do that.

Even you advice against using SCO "Whatever SCO (the company) has done to Linux, SCO's UNIX systems were alright." We disagree on that you think they were once alright, but even you admit that your are talking PAST tense.

As for selling it all of, WHAT IP? They have been proven in court not to own Unix, what IP have they got left?

So why are they doing it? Who is to say they do? MS been behind other finance deals related to SCO. For MS blowing 36 mill is nothing. Spare change. Could they be trying to buy SCO to continue the fight againt Linux? They done it before, and Ballmer is still on the warpath.

That is the most likely scenario to me.

Re:A tad biased (4, Informative)

l-ascorbic (200822) | more than 6 years ago | (#21111647)

In a market where Facebook (without an obvious revenue stream) is valued in the billions...

You realise Facebook is pulling in $150 million per year revenue, right?

Re:A tad biased (1)

pablochacin (1061488) | more than 6 years ago | (#21111767)

Some facts. If you look at the SCO's financial reports http://ir.sco.com/results.cfm [sco.com] , you will see a couple of interesting things. First, revenue sinked from 36 M in 2005, to 29 M in 2006 and made just 12 M in the first two quarters of 2007 (so a 24M by end of year is a good approximation). Second, the revenue from SCO licenses is just ridiculous, it is in the order of a few K, not even a million! Most of the revenue comes from services, which are not an asset you can sell easily (I might be wrong here).

With respect of Facebook, I agree it is insane, as most of the Internet era businesses. But the basic idea is that you buy the tens of millions of recurring users, which MAYBE represent a source of revenue. Hey, is the classic "built it and they will come" approach. Facebook is not in the business of making money out of the user, but to get them in the first place. Then others will come to make money (or not, that's a big risk, if not ask eBay about Skype!)

Re:A tad biased (1)

Wdomburg (141264) | more than 6 years ago | (#21112235)

Alright isn't exactly the word that springs to mind. Ugly. Overpriced. Ancient. Painful. Openserver 5 was a SVR3 derivative kept alive far too long with absolute minimal support (last I looked they still hadn't fixed bugs that I reported a decade ago). Unixware 2 was okay, but they didn't develop that, they purchased it. Unixware 7 was marred by the introduction of some stupid OSR5isms (ostensibly to ease migration) and incredibly poor quality control. I can't speak for OpenServer 6 since that was released after I ceased having anything to do with SCO.

(For the record - once upon a time I supported SCO Xenix, Unix, OpenDesktop, OpenServer, Unixware, VisionFS, Advanced File and Print Services, Merge, Non-Stop Clusters and Tarantella. Still have the certifications around here somewhere.)

From Groklaw comments: (5, Interesting)

Udo Schmitz (738216) | more than 6 years ago | (#21111007)

User Jaywalker over at Groklaw has an interesting comment [groklaw.net] :

"JGD Management Corporation has its principal executive offices at 1118 East Green Street Pasadena, California 91106 (http://www.secinfo.com/d12TC3.v51a.htm)

If you google the address the first match is a reference to a page on Edgar which provides the Form 4 (any of you US business types know what that is?) for a comany known as Arrowhead Research Corp which has one R Bruce Stewart as its CEO and Chairman of the Board.
(http://edgar.brand.edgar-online.com/EFX_dll/EDGARpro.dll?FetchFilingHTML1?Sessi onID=T-hII2bI2EHwHrP&ID=3669175)

R Bruce Stewart founded Acacia Research Corporation in March 1991. (http://www.forbes.com/finance/mktguideapps/personinfo/FromPersonIdPersonTearshe et.jhtml?passedPersonId=927443).

Has anyone heard of Acacia Research before?

Hmmmm.

It has to be a coincidence."

Yikes! (1)

Colin Smith (2679) | more than 6 years ago | (#21111053)

You just found one of the illuminati.... You'd better run.

 

Re:Yikes! (1)

Udo Schmitz (738216) | more than 6 years ago | (#21111169)

Just because I'm paranoid doesn't mean they aren't after me.

Re:Yikes! (1)

Opportunist (166417) | more than 6 years ago | (#21111443)

I AM NOT PARANOID!

(because if you are, THEY notice it immediately!)

Re:Yikes! (0)

Anonymous Coward | more than 6 years ago | (#21111275)

Oh that's nice. Someone finds the connection between Microsoft, who's been quite vocal in their views and has quite a few explicit connections to SCO, and this current thing and you call them a "conspiracy theorist".

Aporogies, but your counterargument is nothing short of an ad hominem, i.e. labeling the opponent a nutcase and their argument nutcase spew. Examined from the outside, your argument is clearly in the "3. profit! 2. ??? 1. get underpants" category, where you start from the conclusion, omit the bridge and furiously point your finger at the starting point. Come up with something better, prease?

Microsoft Stink (2, Interesting)

canuck57 (662392) | more than 6 years ago | (#21111487)

This has Microsoft stink all over it:

http://www.google.com/search?q=microsoft+Acacia+Research&btnG=Google+Search

Re:From Groklaw comments: (1, Insightful)

Otter (3800) | more than 6 years ago | (#21111563)

It has to be a coincidence.

Maybe I'm missing something. This company is in the same office building as a second company, the CEO of which founded a third company 16 years ago. The "coincidence" is what?

Given that the best the kookazoids at Groklaw can come up with is some sketchy conspiracy theory about "nanotubes", there doesn't seem to be a whole lot here.

the coincidence is what? (1)

Joseph_Daniel_Zukige (807773) | more than 6 years ago | (#21111747)

you just named it.

More ties: (4, Interesting)

walterbyrd (182728) | more than 6 years ago | (#21111779)

Acacia = "InterActive Group" = "Arrowhead Research" (= Msft?)

"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."

http://www.secinfo.com/d14D5a.u4d4r.htm [secinfo.com]

"Arrowhead Research" refers to Arrowhead Research Corporation, a Delaware corporation and formerly known as InterActive Group, Inc."

http://www.nasdaq.com/asp/symbols.asp?exchange=NGM&start=A&sort=cap&Type=0 [nasdaq.com]

"The consolidated financial statements include the accounts of Arrowhead Research Corporation (a Delaware Corporation), formally InterActive Group, Inc., and Arrowhead Research Corporation (a California Corporation), a wholly-owned subsidiary. All significant intercompany accounts and transactions have been eliminated in consolidation.
. . . .
In October 2003, in connection with an initial private placement of Common Stock, the Company [Arrowhead Research] accepted 80,255 shares of Acacia Research Corporation, valued at $500,000, and $500,000 cash in exchange for 1,000,000 units. The shares are carried on the financial statements as marketable securities. See Note 3."

http://sec.edgar-online.com/2004/05/17/0001015402-04-002107/Section7.asp [edgar-online.com]

"On May 29, 2007, we [Arrowhead Research] sold to certain institutional and accredited investors an aggregate of 2,849,446 shares of common stock (the "Private Placement Shares") at a per share purchase price of $5.78, and Warrants to purchase up to an additional 712,363 shares of common stock (the "Warrant Shares"), exercisable at $7.06 per share, in the Private Placement. Two investment vehicles of York Capital Management, a stockholder holding greater than 10% of the Company's Common Stock, participated in the offering."

http://www.secinfo.com/d14D5a.u4d4r.htm [secinfo.com]

Microsoft again.. (0)

Anonymous Coward | more than 6 years ago | (#21112129)

Googling Acacia Research brings up Microsoft connections all over the place... yep, its them again, keeping the zombie SCO undead..

The sale probably won't go through (1, Interesting)

Anonymous Coward | more than 6 years ago | (#21111021)

The asset purchase agreement between Santa Cruz and Novell gave Novell the right to yank back the business if Santa Cruz had a 'change of control'. That means Novell can veto the sale. In fact the clause was inserted because Novell was worried that Santa Cruz would go bankrupt.

Will the bankruptcy judge void the APA. AllParadox, a retired lawyer who has been following this closely, says that they don't do that.

Re:The sale probably won't go through (1)

FellowConspirator (882908) | more than 6 years ago | (#21111523)

Novell can't veto the sale. What they can do is take their ball (the UNIX business) and go home. Presumably a purchaser would take this into account (and, perhaps, offer repayment on the monies due to them). I bet that a buyer could make the sale contingent on Novell agreeing to accept 50-cents on the dollar for what they are owed by SCO if it was guaranteed and all legal activities stop. If Novell didn't agree, the company would otherwise not buy and SCO would litigate away all potential cash.

heyho. (0)

apodyopsis (1048476) | more than 6 years ago | (#21111047)

the vultures got tired of circling then? gliding into land....

no doubt it will be a buy, slice, dice and sell operation. its doubtful there is a long term viable business there anymore.

bit of a fall from grace though, SCO used to be well respected back in the day. heyho.

Better idea (2, Funny)

Spy der Mann (805235) | more than 6 years ago | (#21111089)

why don't they just sell themselves in ebay? After all, a paperclip can generate millions! :)

Re:Better idea (0)

Anonymous Coward | more than 6 years ago | (#21111525)

If you think a house in northern Saskatchewan is worth millions then brother, I have a log cabin situated in the midst of a reeking swamp that you can have for only 500K..

Re:Better idea (1)

Rolgar (556636) | more than 6 years ago | (#21112049)

Opening bid at $699? Do I have $699?

BS, There is no buyer (2, Insightful)

Herkum01 (592704) | more than 6 years ago | (#21111095)

There is no bid, SCO said in bankrupty court that there "MAY be a buyer".

They are going down the tubes and they are doing anything they can to stem the tide. If they means they go to bankruptcy court to spread this rumor, so be it. Only a fool would believe them.

So let's unwrap this (3, Interesting)

tietokone-olmi (26595) | more than 6 years ago | (#21111199)

The SCO thrust caught fire, blew up and is sinking at a respectable clip. Since it became obvious that this would happen (sometime in the summer), SCO's puppet masters had them "re-focus" their business into "mobile solutions". We should all know that "mobile solutions" is where shitty ideas and companies re-focus in order to perhaps get a little bit more investments in; therefore we can consider that SCO is basically a walking corpse at this moment.

This "Unix IP" sale is so that SCO can be permitted to sink and Novell & IBM may attempt to get their butter & 2K monies (as in JA I AM MADE OF) from a shell of a shitheap, if they can. Once the "Unix IP" package is moved elsewhere, SCO's puppet masters may attempt to re-do this whole operation in a few years in a more favourable legal environment and perhaps a judge that is more "reliable" (i.e. in their pocket).

There's a minor hole in this coreography though. If 6 million has been offered for the "Unix IP" parcel, then it should be obviously outside the group of stuff that SCO may hammer to get out of deep red again. The money from the sale would obviously go to pay executive salaries (some 80,000$ a month, is it?) and lawyer fees (well past 5 million US$, I reckon). I suppose we'll see whether the SCO chapter 11 trustee is in the puppeteer's pocket or not.

I must say that Microsoft planned this one out pretty well. Of course their plan relies on corruption to smooth the way so that their side can execute their moves quicker than the opposition, as always, but still.

Re:So let's unwrap this (1)

rucs_hack (784150) | more than 6 years ago | (#21112175)

SCO's puppet masters may attempt to re-do this whole operation in a few years in a more favorable legal environment and perhaps a judge that is more "reliable" (i.e. in their pocket)

Thats extremely unlikely. Every strategy SCO came up with over the course of litigation failed, every single one. Their initial plan seems to have been a pump and dump type affair, getting IBM to buy them out to remove the problem. It was Novells involvement that really shagged them. They were onto a losing slope from that point on.

That's not to say there won't be more attacks on Linux, but the SCO fiasco has actually hardened the IP status of Linux to the point where they may actually have helped Linux be robust to this form of attack in the future. Linux and Unix are related, but one is not made using pieces of the other, except for public domain code and required portions that are non protectable and exist in both.

Re:So let's unwrap this (1)

rkhalloran (136467) | more than 6 years ago | (#21112213)

As has been said many times elsewhere in this piece, the judge has ruled that Novell holds the UNIX copyrights, such as they are. All SCOX might have direct rights to is whatever code has been added to the old AT&T codebase since the deal.

The Utah judge also ruled that the Sun & Microsoft payments were to some extent SysV license fees; the trial that would have started the week SCOX filed BK was to determine how much. Those monies (conversion) aren't supposed to be part of the bankruptcy estate, because legally it wasn't SCOX' to start with (analogy of bank thief filing BK and claiming the stolen money as part of his assets).

Given all the suits facing SCOX from Novell, IBM, etc., I don't see how this offer makes any sense. They can't sell the "UNIX IP", it's Novell's. Novell gets back the "UNIX business" from SCaldera on a change of ownership, per the contract, which the BK judge can't/won't void. They can't wave off IBM's countercharges. They owe *something* back to Novell of whatever they have in the bank. What the fsck do they have to sell?

Looks like YA attempt to bleed out the money to Anyone-But-Novell before the courts drop the hammer on them. Traditional Canopy Group behavior.

SCOX DELENDA EST!!

We're not dead yet! (0)

SL Baur (19540) | more than 6 years ago | (#21111271)

It's getting better!

But sir knight, you have no arms and no legs, what are you going to do, bleed on me?

I would not buy SCO's assets-LOSING VAR BUSINESS (1)

scottsk (781208) | more than 6 years ago | (#21111339)

SCO's UnixWare and Xenix were a staple of the VAR world, but I would not touch SCO's assets if I was a paper-pushing business person. People are abandoning UnixWare for Linux. Example: IBM had a program to sell mainframe emulators that ran on UnixWare and Linux. The program was wildly successful, many orders of magnitude beyond what IBM thought it would be, and the revenue boost to SCO was huge (back when it started, Linux wasn't as robust and accepted as it is now). So it's ironic that one of SCO's big profit centers the past 5-7 years has been an IBM program! But (1) people use Red Hat, not SCO, for this; and (2) IBM and the emulator company had a bitter falling out and IBM suspended this program. This is the way the VAR world is going. You're not going to have VAR operating systems like UnixWare and Xenix anymore -- VARs are going to use Linux. The only way I would buy SCO's assets would be for pennies on the dollar to re-Caldera them and release them as open source, perhaps if I was a VAR who had UnixWare experience and wanted to offer support contracts. (My first job was supporting Medical Manager on Xenix, so it's sad to see what has happened to this once great platform. Medical Manager is still around, but I don't know what it runs on now. Probably Linux!)

$10 million for legal fees (0)

Anonymous Coward | more than 6 years ago | (#21111407)

It's a good day to be a lawyer.

I, for one.. (2, Funny)

theorem4 (1101729) | more than 6 years ago | (#21111457)

I, for one, welcome our cash-laden overlords.

why won't it die (2, Funny)

chrome (3506) | more than 6 years ago | (#21111937)

it's like a zombie ... and it wants to eat our brainz.

our delicious, unix based, brainz.

Jcock (-1, Offtopic)

Anonymous Coward | more than 6 years ago | (#21111975)

users. BSD/OS EFNET sERVERS. for it. I don't

Litigation Not Included (2, Informative)

NigelBeamenIII (986462) | more than 6 years ago | (#21112365)

It should be noted that the agreement specifically EXCLUDES the transfer of the Novell and IBM litigation to York. The actual motion can be read on Groklaw (as usual) with more info than the LinuxWorld article.
Load More Comments
Slashdot Account

Need an Account?

Forgot your password?

Don't worry, we never post anything without your permission.

Submission Text Formatting Tips

We support a small subset of HTML, namely these tags:

  • b
  • i
  • p
  • br
  • a
  • ol
  • ul
  • li
  • dl
  • dt
  • dd
  • em
  • strong
  • tt
  • blockquote
  • div
  • quote
  • ecode

"ecode" can be used for code snippets, for example:

<ecode>    while(1) { do_something(); } </ecode>
Create a Slashdot Account

Loading...