The SCO Group (often referred to SCO and later called The TSG Group) was an American software company in existence from 2002 to 2012 that became known for owning
Unix operating system assets that had belonged to the
Santa Cruz Operation
The Santa Cruz Operation, Inc. (usually known as SCO, pronounced either as individual letters or as a word) was an American software company, based in Santa Cruz, California, that was best known for selling three Unix operating system variants ...
(the original SCO), including the
UnixWare and
OpenServer technologies, and then, under CEO
Darl McBride, pursuing a series of high-profile legal battles known as the
SCO-Linux controversies.
The SCO Group began in 2002 with a renaming of
Caldera International, accompanied by McBride becoming CEO and a major change in business strategy and direction. The SCO brand was re-emphasized and new releases of UnixWare and OpenServer came out. The company also attempted some initiatives in the e-commerce space with the SCOBiz and SCOx programs. In 2003, the SCO Group claimed that the increasingly popular free
Linux
Linux ( or ) is a family of open-source Unix-like operating systems based on the Linux kernel, an operating system kernel first released on September 17, 1991, by Linus Torvalds. Linux is typically packaged as a Linux distribution, which i ...
operating system contained substantial amounts of Unix code that
IBM had improperly put there. The
SCOsource division was created to monetize the company's intellectual property by selling Unix license rights to use Linux. The ''
SCO v. IBM
''SCO Group, Inc. v. International Business Machines Corp.'', commonly abbreviated as ''SCO v. IBM'', is a civil lawsuit in the United States District Court of Utah. The SCO Group asserted that there are legal uncertainties regarding the use o ...
'' lawsuit was filed, asking for billion-dollar damages and setting off one of the top technology battles in the history of the industry. By a year later, four additional lawsuits had been filed involving the company.
Reaction to SCO's actions from the
free and open source software community was intensely negative and the general IT industry was not enamored of the actions either. SCO soon became, as ''
Businessweek
''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York Cit ...
'' headlined, "The Most Hated Company In Tech". SCO Group stock rose rapidly during 2003, but then SCOsource revenue became erratic and the stock began a long fall. Despite the industry's attention to the lawsuits, SCO continued to maintain a product focus as well, putting out a major new release of OpenServer that incorporated the UnixWare kernel inside it. SCO also made a major push in the burgeoning
smartphone
A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, whic ...
s space, launching the Me Inc. platform for mobility services. But despite these actions, the company steadily lost money and shrank in size.
In 2007, SCO suffered a major adverse ruling in the ''
SCO v. Novell'' case that rejected SCO's claim of ownership of Unix-related copyrights and undermined much of the rest of its legal position. The company filed for
Chapter 11 bankruptcy protection
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, whe ...
soon after and attempted to continue operations. Its mobility and Unix software assets were sold off in 2011, to McBride and
UnXis respectively. Renamed to The TSG Group, the company converted to
Chapter 7 bankruptcy
Chapter 7 of Title 11 of the United States Code (Bankruptcy Code) governs the process of liquidation under the bankruptcy laws of the United States, in contrast to Chapters 11 and 13, which govern the process of ''reorganization'' of a debtor. ...
in 2012. A portion of the ''SCO v. IBM'' case continued on until 2021, when a settlement was reached for a tiny fraction of what The SCO Group had initially sued for.
Initial history
Background
The
Santa Cruz Operation
The Santa Cruz Operation, Inc. (usually known as SCO, pronounced either as individual letters or as a word) was an American software company, based in Santa Cruz, California, that was best known for selling three Unix operating system variants ...
had been an American software company, founded in 1979 in
Santa Cruz, California
Santa Cruz ( Spanish for "Holy Cross") is the county seat and largest city of Santa Cruz County, in Northern California. As of the 2020 census, the city population was 62,956. Situated on the northern edge of Monterey Bay, Santa Cruz is a pop ...
, that found success during the 1980s and 1990s selling
Unix
Unix (; trademarked as UNIX) is a family of multitasking, multiuser computer operating systems that derive from the original AT&T Unix, whose development started in 1969 at the Bell Labs research center by Ken Thompson, Dennis Ritchie, a ...
-based operating system products for
Intel x86-based server systems. SCO built a large community of
value-added resellers that eventually became 15,000 strong and many of its sales of its
SCO OpenServer product to small and medium-sized businesses went through those resellers. In 1995, SCO bought the
System V Release 4
Unix System V (pronounced: "System Five") is one of the first commercial versions of the Unix operating system. It was originally developed by AT&T and first released in 1983. Four major versions of System V were released, numbered 1, 2, 3, an ...
and
UnixWare business from
Novell
Novell, Inc. was an American software and services company headquartered in Provo, Utah, that existed from 1980 until 2014. Its most significant product was the multi- platform network operating system known as Novell NetWare.
Under the l ...
(which had two years earlier acquired the
AT&T
AT&T Inc. is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's largest telecommunications company by revenue and the third largest provider of mobile tel ...
-offshoot
Unix System Laboratories
Unix System Laboratories (USL), sometimes written UNIX System Laboratories to follow relevant trademark guidelines of the time, was an American software laboratory and product development company that existed from 1989 through 1993. At first wh ...
) to improve its technology base. But beginning in the late 1990s, SCO faced increasingly severe competitive pressure, on one side from Microsoft's
Windows NT
Windows NT is a proprietary graphical operating system produced by Microsoft, the first version of which was released on July 27, 1993. It is a processor-independent, multiprocessing and multi-user operating system.
The first version of Wi ...
and its successors and on the other side from the free and open source
Linux
Linux ( or ) is a family of open-source Unix-like operating systems based on the Linux kernel, an operating system kernel first released on September 17, 1991, by Linus Torvalds. Linux is typically packaged as a Linux distribution, which i ...
. In 2001, the Santa Cruz Operation sold its rights to Unix and its SCO OpenServer and UnixWare products to
Caldera International.
Caldera, based in
Lindon, Utah, had been in the business of selling its
OpenLinux product but had never been profitable. It attempted to make a combined business out of Linux and Unix but failed to make headway and had suffered continuing financial difficulties. By June 2002 its stock was facing a second delisting notice from NASDAQ and the company had less than four months' cash for operations.
[ As '']Wired
''Wired'' (stylized as ''WIRED'') is a monthly American magazine, published in print and online editions, that focuses on how emerging technologies affect culture, the economy, and politics. Owned by Condé Nast, it is headquartered in San Fran ...
'' magazine later wrote, the company "faced a nearly hopeless situation."
On June 27, 2002, Caldera International had a change in management, with Darl McBride, formerly an executive with Novell
Novell, Inc. was an American software and services company headquartered in Provo, Utah, that existed from 1980 until 2014. Its most significant product was the multi- platform network operating system known as Novell NetWare.
Under the l ...
, FranklinCovey
Franklin Covey Co., trading as FranklinCovey and based in Salt Lake City, Utah, is a coaching company which provides training and assessment services in the areas of leadership, individual effectiveness, and business execution for organizations a ...
, and several start-ups, taking over as CEO from Caldera co-founder Ransom Love.
Back to a SCO name; SCOBiz and SCOx
Change under McBride happened quickly. On August 26, 2002, he announced at the company's annual Forum conference in Las Vegas that Caldera International was changing its name to The SCO Group. He did this via a multimedia display in which an image of Caldera was shattered and replaced by The SCO Group's logo, which was a slightly more stylized version of the old Santa Cruz Operation logo. The attendees at the conference, most of whom were veteran SCO partners and resellers, responded to the announcement with enthusiastic applause.[ McBride announced, "SCO is back from the dead," and a story in '']The Register
''The Register'' is a British technology news website co-founded in 1994 by Mike Magee, John Lettice and Ross Alderson. The online newspaper's masthead sublogo is "''Biting the hand that feeds IT''." Their primary focus is information tech ...
'' began, "SCO lives again."[ As part of this, the company adopted SCOX as its trading symbol. (The final legal aspects of the name change did not become complete until May 2003.])
The change back to a SCO-based name reflected recognition of the reality that almost all of the company's revenue was coming from Unix, not Linux, products.[ For instance, ]McDonald's
McDonald's Corporation is an American multinational fast food
Fast food is a type of mass-produced food designed for commercial resale, with a strong priority placed on speed of service. It is a commercial term, limited to food sold ...
had recently expanded its usage of OpenServer from 4,000 to 10,000 stores; indeed, both OpenServer and UnixWare were strong in the replicated sites business.[ Furthermore the SCO brand was better known than the Caldera one, especially in Europe, and SCO's large, existing reseller and partner channel was resistant to switching to Caldera's product priorities.]
McBride emphasized that the OpenServer product was still selling: "What is it with the OpenServer phenomenon? We can't kill it. One customer last month bought $4 million in OpenServer licenses. The customers want to give us money for it. Why don't we just sell it?"[ As a historical comparison for his strategy of building back up the brand and being more responsive to customers, McBride used a model of the revival of the Harley-Davidson brand in the 1980s.][ Besides McBride, other company executives, including new senior vice president of technology Opinder Bawa, were heavily involved in the change of direction.][
The product name Caldera OpenLinux became "SCO Linux powered by UnitedLinux" and all other Caldera branded names were changed as well.
In particular, the longstanding UnixWare name – which Caldera had changed to Open UNIX – was restored,][ such that what had been called Open UNIX 8 was now named in proper sequence as UnixWare 7.1.2. Announcements were made that a new OpenServer release, 5.0.7, and a new UnixWare release, 7.1.3, would appear at the end of the year or beginning of the next.][ Moreover, through a new program called SCO Update, more frequent updates of capabilities were promised beyond that.][ Caldera's Volution Messaging Server product was retained and renamed SCOoffice Server, but the other Caldera Volution products were split off under the names Volution Technologies, Center 7, and finally Vintela.]
Software releases and e-commerce initiatives
In addition to reviving SCO's longtime operating system products, the SCO Group also announced a new venture, SCOBiz.[ SCOBiz was a collaboration with the ]Bellingham, Washington
Bellingham ( ) is the most populous city in, and county seat of Whatcom County in the U.S. state of Washington. It lies south of the U.S.–Canada border in between two major cities of the Pacific Northwest: Vancouver, British Columbia (lo ...
-based firm Vista.com, founded in 1999 by John Wall, in which SCO partners could sell Vista.com's online, web-based e-commerce development and hosting service targeted at small and medium-sized businesses.[ More importantly, as part of SCOBiz, the two companies would develop a ]SOAP
Soap is a salt of a fatty acid used in a variety of cleansing and lubricating products. In a domestic setting, soaps are surfactants usually used for washing, bathing, and other types of housekeeping. In industrial settings, soaps are used ...
- and XML
Extensible Markup Language (XML) is a markup language and file format for storing, transmitting, and reconstructing arbitrary data. It defines a set of rules for encoding documents in a format that is both human-readable and machine-readable. ...
-based web services interface to enable Vista.com e-commerce front-ends to communicate with existing back-end SCO-based applications.[ Industry analysts were somewhat skeptical of the chances for SCOBiz succeeding, as the market was already crowded with ]application service provider
An application service provider (ASP) is a business providing application software generally through the Web.
The ASP model
The application software resides on the vendor's system and is accessed by users through a communication protocol. Altern ...
offerings and the dot-com bubble
The dot-com bubble (dot-com boom, tech bubble, or the Internet bubble) was a stock market bubble in the late 1990s, a period of massive growth in the use and adoption of the Internet.
Between 1995 and its peak in March 2000, the Nasdaq Comp ...
had already burst by that point.[
Lastly, SCO announced a new program for partners, called SCOx.][ A key feature of SCOx was a buyout option that allowed SCOx solution providers to sell their businesses back to SCO.] McBride stated that the program would give partners a chance at "living the American dream."[
The company's financial hole was emphasized when it released its results for the fiscal year ending October 31, 2002 – it had lost $25 million on revenues of $64 million.][
The previously announced operating system releases began appearing, beginning with a Linux release. Caldera International had been one of the founders of the United Linux initiative, along with ]SuSE
SUSE ( , ) is a German-based multinational open-source software company that develops and sells Linux products to business customers. Founded in 1992, it was the first company to market Linux for enterprise. It is the developer of SUSE Linux En ...
, Conectiva, and Turbolinux, and the newly-named SCO Linux 4 came out in November 2002, in conjunction with each of the other vendors releasing their versions of the United Linux 1.0 base. The SCO product was targeted towards the small-to-medium business market, whereas the SuSE product was aimed at the enterprise segment and Conectiva and Turbolinux were intended mostly for the South American and Asian markets.[ The common United Linux base (which mostly came from a SuSE code origin), and the promise of common certification across all four products, attracted some support from hardware and software vendors such as IBM, HP, Computer Associates, and SAP.][ An assessment of SCO Linux 4 in '']eWeek
''eWeek'' (''Enterprise Newsweekly'', stylized as ''eWEEK''), formerly PCWeek, is a technology and business magazine. Previously owned by QuinStreet; Nashville, Tennessee marketing company TechnologyAdvice acquired eWeek in 2020.
The print e ...
'' found that it was a capable product, although the Webmin
Webmin is a powerful and flexible web-based server management control panel for Unix-like systems. Webmin allows the user to configure operating system internals, such as users, disk quotas, services or configuration files, as well as modify a ...
configuration tool was seen as limited when compared to YaST, SuSE's own operating system configuration tool. In terms of service and support, SCO pledged to field a set of escalation engineers that would only be handling SCO Linux issues.[
The new Unix operating system releases then came out. UnixWare 7.1.3 was released in December 2002, which featured improved Java support, the ]Apache Web Server
The Apache HTTP Server ( ) is a free and open-source cross-platform web server software, released under the terms of Apache License 2.0. Apache is developed and maintained by an open community of developers under the auspices of the Apache Soft ...
framework, and improvements to the previously developed Linux Kernel Personality (LKP) for running Linux applications. In particular, the SCO Group stated that due to superior multiprocessor performance and reliability, Linux applications could run better on UnixWare via LKP than they could on native Linux itself,[ a stance that dated back to Santa Cruz Operation/Caldera International days. One review, that found UnixWare 7.1.3 lacking in a number of other respects, called LKP "the most impressive of UnixWare's capabilities."][ SCO OpenServer 5.0.7 was released in February 2003; the release emphasized enhanced hardware support, including new graphic, network and HBA device drivers, support for USB 2.0, improved and updated UDI support, and support for several new Intel and Intel-compatible processors.
The SCOx software framework was announced in April 2003; its aim was to enable the SCO developer and reseller community to be able to connect web services and web-based presentation layers to the over 4,000 different applications that ran small and midsize businesses and branch offices.] The web services aspect of SCOx included bundled SOAP/XML support for the Java, C, C++, PHP, and Perl languages.[ A primary target of the SCOx framework was SCOBiz e-commerce integration, although other uses were possible as well.][ The planned SCOx architecture overall was composed of layers for e-business services, web services, SSL-based security, a mySCO reseller portal, hosting services, and a software development kit.]
But by then, these software releases and e-commerce initiatives had become overshadowed by legal actions.
In the courts
A focus on intellectual property
As soon as McBride became the head of Caldera International, he became interested in what intellectual property the company possessed.[ He had been a manager at Novell in 1993][ when Novell had bought Unix System Laboratories, and all of its Unix assets, including copyrights, trademarks, and licensing contracts, for $335 million.] Novell had subsequently sold its Unix business to the Santa Cruz Operation, which had then sold it to Caldera. So in 2002, McBride said he had thought: "In theory, there should be some value to that property – somewhere between a million and a billion ollars right? I just wanted to know what real, tangible intellectual property value the company held." Shortly before the name change to SCO, Caldera went through its existing license agreements, found some that were not being collected upon, and came to arrangements with those licensees representing some $600,000 in annual revenue.[
In particular, from the start of his time as CEO, McBride had considered the possibility of claiming ownership of some of the code within Linux.][ Outgoing Caldera CEO Ransom Love had told him, "Don't do it. You don't want to take on the entire Linux community."][ During the August 2002 name change announcement, Bawa stated, "We own the source to UNIX; it's that simple. If we own the source, we are entitled to collect the agreed license fees."][ But at the time, McBride said he had no intention of taking on Linux.][
By October 2002, McBride had created an internal organization "to formalize the licensing of our intellectual property"; this effort was provisionally called SCO Tech.] Senior vice president Chris Sontag was put in charge of it.[
By the end of 2002, McBride and SCO had sought out the services of ]David Boies
David Boies (; born March 11, 1941) is an American lawyer and chairman of the law firm Boies Schiller Flexner LLP. Boies rose to national prominence for three major cases: leading the U.S. federal government's successful prosecution of Microsof ...
of the law firm Boies, Schiller and Flexner as part of an effort to litigate against what it saw was unrightful use of its intellectual property.[ Boies had gained fame in the industry for leading the U.S. federal government's successful prosecution of Microsoft in '' United States v. Microsoft Corp.'';][ as McBride subsequently said, "We went for the biggest gun we could find."][ (Boies' record in other cases was mixed, however, including a high-visibility loss in the 2000 '' Bush v. Gore'' Florida election dispute.][)
News of the SCO Group's intent to take action regarding Linux first broke on January 10, 2003, in a column by technology reporter Maureen O'Gara of ''Linuxgram'' that appeared in ''Client Server News'' and ''Linux Business Week''.][ She wrote that a draft press release concerning SCO's plans had been in the works for several weeks and had been quietly circulated to other companies in the industry.] The O'Gara report, unconfirmed as it was, caused some amount of consternation in the Linux community.
On January 22, 2003, creation of the SCOsource division of the company, to manage the licensing of the company's Unix-related intellectual property, was officially announced, as was the hiring of Boies to investigate and oversee legal protection of that property. As the ''Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
'' reported, Linux users had generally assumed that Linux was created independently of Unix proprietary code, and Linux advocates were immediately concerned that SCO was going to ask large companies using Linux to pay SCO licensing fees to avoid a lawsuit. The first announced license program within SCOsource was called SCO System V for Linux, which was a set of shared libraries
In computer science, a library is a collection of non-volatile resources used by computer programs, often for software development. These may include configuration data, documentation, help data, message templates, pre-written code and su ...
intended to allow SCO Unix programs to be run legally on Linux without a user needing to license all of SCO OpenServer or UnixWare as had theretofore been necessary.
The company continued to lose money, on revenues of $13.5 million in the first fiscal quarter of 2003, but McBride was enthusiastic about the prospects for the new SCOsource division, telling investors on a February 26 earnings call that he expected it to bring in $10 million alone in the second fiscal quarter.
Lawsuits begin
On March 6, 2003, SCO filed suit against IBM, claiming that the computer giant had misappropriated trade secrets by transferring portions of its Unix-based AIX operating system into Linux, and asked for at least $1 billion in damages. (The amount was subsequently raised to $3 billion,[ and later still to $5 billion.][ The suit initially coincided with SCO's existing relationship with IBM to sell UnixWare on IBM Netfinity systems.]) The complaint also alleged breach of contract
Breach of contract is a legal cause of action and a type of civil wrong, in which a binding agreement or bargained-for exchange is not honored by one or more of the parties to the contract by non-performance or interference with the other par ...
and tortious interference
Tortious interference, also known as intentional interference with contractual relations, in the common law of torts, occurs when one person intentionally damages someone else's contractual or business relationships with a third party, causing e ...
by IBM against the Santa Cruz Operation for its part in the failed Project Monterey of the late 1990s. Overall, SCO maintained that Linux could not have caught up to "Unix performance standards for complete enterprise functionality" so quickly without coordination by a large company, and that this coordination could have happened through the taking of "methods or concepts" even if not a single line of Unix code appeared within Linux.[ The '']SCO v. IBM
''SCO Group, Inc. v. International Business Machines Corp.'', commonly abbreviated as ''SCO v. IBM'', is a civil lawsuit in the United States District Court of Utah. The SCO Group asserted that there are legal uncertainties regarding the use o ...
'' case was underway; it would come to be considered one of the top technology battles of all time.
Many industry analysts were not impressed by the lawsuit, with one saying, "It's a fairly end-of-life move for the stockholders and managers of that company. ... This is a way of salvaging value out of the SCO franchise they can't get by winning in the marketplace."[ Other analysts pointed to the deep legal resources IBM had for any protracted fight in the courts, but McBride professed to be nonplussed: "If it takes a couple of years, we're geared to do that."][ For his part, Boies said he liked ]David versus Goliath
Goliath ( ) ''Goləyāṯ''; ar, جُليات ''Ǧulyāt'' (Christian term) or (Quranic term). is a character in the Book of Samuel, described as a Philistine giant defeated by the young David in single combat. The story signified King Saul ...
struggles, and his firm would see a substantial gain out of any victory.[
In mid-May 2003, SCO sent a letter to some 1,500 companies, cautioning them that using Linux could put them in legal jeopardy.][ As part of this, SCO proclaimed that Linux contained substantial amounts of Unix System V source code and that, as such, "We believe that Linux is, in material part, an unauthorized derivative of Unix."][ As CNET wrote, the move "dramatically broaden d the scope of the company's legal actions.]
At the same time, SCO announced it would stop selling its own SCO Linux product.[ A casualty of this stance was SCO's participation in the United Linux effort, and in turn United Linux itself.][ While the formal announcement that United Linux had ended did not come until January 2004, in reality the project stopped doing any tangible work soon after SCO filed its lawsuit against IBM.]
A few days later, Microsoft – which had long expressed disdain for Linux – said it was acquiring a Unix license from SCO, in order to ensure interoperability with its own products and to ward off any questions about rights.[ The action was a boon to SCO, which to this point had received little support in the industry for its licensing initiative.] Another major computer company, Sun Microsystems
Sun Microsystems, Inc. (Sun for short) was an American technology company that sold computers, computer components, software, and information technology services and created the Java programming language, the Solaris operating system, ZFS, ...
, bought an additional level of Unix licensing from SCO to add to what it had originally obtained a decade earlier.[
On May 28, 2003, Novell counterattacked, saying its sale of the Unix business to the Santa Cruz Operation back in 1995 did ''not'' include the Unix software copyrights, and thus that the SCO Group's legal position was empty.][ Jack Messman, the CEO of Novell, accused SCO of attempting an extortion plan against Linux users and distributors.][ Unix has a complex corporate history,][ with the SCO Group a number of steps removed from the ]Bell Labs
Nokia Bell Labs, originally named Bell Telephone Laboratories (1925–1984),
then AT&T Bell Laboratories (1984–1996)
and Bell Labs Innovations (1996–2007),
is an American industrial research and scientific development company owned by mult ...
origins of the operating system. Novell and the SCO Group quickly fell into a vocal dispute that revolved around the interpretation of the 1995 asset-transfer agreement between them.[ That agreement had been uncertain enough at the time that an amendment to it had to be signed in October 1996, and even that was insufficiently unambiguous to now preclude an extended battle between the two companies.][
In July 2003, SCO began offering UnixWare licenses for commercial Linux users, stating that "SCO will hold harmless commercial Linux customers that purchase a UnixWare license against any past copyright violations, and for any future use of Linux in a run-only, binary format."]
The server-based licenses were priced at $699 per machine, and if they were to become mandatory for Linux users, would represent a tremendous source of revenue for SCO.[ The potential for this happening was certainly beneficial to SCO's stock price, which during one three-week span in May 2003 tripled in value.][
Another counterattack came in August 2003, when '']Red Hat, Inc. v. SCO Group, Inc.
''Red Hat v. SCO'' is a lawsuit filed by Red Hat against The SCO Group on August 4, 2003. Red Hat was asking for a permanent injunction against SCO's Linux campaign and a number of declaratory judgments that Red Hat has not violated SCO's copy ...
'' was filed by the largest of the Linux distribution companies.
The SCO Group received a major boost in October 2003 when BayStar Capital
The LRG Capital Funds (formerly BayStar Capital Funds) are managed by LRG Capital Group, LLC. Through its BayStar Capital III Investment Fund, a multi-strategy investment fund, the firm makes direct investments in small-to mid capitalization, p ...
, a technology-focused venture capital firm, made a $50 million private placement
Private placement (or non-public offering) is a funding round of securities which are sold not through a public offering, but rather through a private offering, mostly to a small number of chosen investors. Generally, these investors include frie ...
investment in SCO, to be used towards the company's legal costs and general product development efforts. In December 2003, SCO sent letters to 1,000 Linux customers that in essence accused them of making illegal use of SCO's intellectual property.[
Novell continued to insist that it owned the copyrights to Unix. While Novell no longer had a commercial interest in Unix technology itself, it did want to clear the way for Linux, having recently purchased SuSE Linux, the second largest of commercial Linux distributions at the time. On January 20, 2004, the SCO Group filed a slander of title suit against Novell, alleging that Novell had exhibited bad faith in denying SCO's intellectual property rights to Unix and UnixWare and that Novell had made false statements in an effort to persuade companies and organizations not to do business with SCO.] The '' SCO v. Novell'' court case was underway.
Lawsuits against two Linux end users,[ '']SCO Group, Inc. v. DaimlerChrysler Corp.
''SCO Group v. DaimlerChrysler'' was a lawsuit filed in the United States, in the state of Michigan. In December 2003, SCO sent a number of letters to Unix licensees. In these letters, SCO demanded that the licensees certify certain things re ...
'' and '' SCO v. AutoZone'' were filed on March 3, 2004. The first alleged that Daimler Chrysler had violated the terms of the Unix software agreement it had with SCO, while the second claimed that AutoZone was running versions of Linux that contained unlicensed source code from SCO.[ As a strategy this move was met by criticism; as '']Computerworld
''Computerworld'' (abbreviated as CW) is an ongoing decades old professional publication which in 2014 "went digital." Its audience is information technology (IT) and business technology professionals, and is available via a publication website ...
'' later sarcastically wrote, "Faced with a skeptical customer base, SCO did what any good business would do to get new customers: sue them for money."[
In any case, the stage was set for the next several years' worth of court filings, depositions, hearings, interim rulings, and so on.
]
Vultus acquisition and a change in SCOx
The SCOsource division got off to a quick start, bringing in $8.8 million during the company's second fiscal quarter, which led to the SCO Group turning a profit for the first time in its Caldera-origined history.
In July 2003, the SCO Group announced it had acquired Vultus Inc. for an unspecified price.[ Vultus was a start-up company, also based in Lindon, Utah,][ and the Lindon-based ]Canopy Group
The Canopy Group is an American investment and property management firm founded by Ray Noorda in 1995 through the Noorda Family Trust. It is headquartered in Lindon, Utah. At various times it has consisted of, or been known as, Canopy Technolo ...
was a major investor in Vultus just as it was the SCO Group. Vultus made the WebFace Solution Suite, a web-based application development environment with a set of browser-based user interface elements that provided a richer UI functionality without the need for Java applets or other plug-ins. Indeed, in putting together WebFace, Vultus was a pioneer in AJAX techniques before that term was even coined.
The acquisition of Vultus resulted in a shift of emphasis in the company's web services initiative, with an announcement being made in August 2003 at SCO Forum that SCOx would now be a web services-based Application Substrate, featuring a combination of tools and APIs from Vultus's WebFace suite and from Ericom Software's Host Publisher development framework.
A year later, in September 2004, this idea materialized when the SCOx Web Services Substrate (WSS) was released for UnixWare 7.1.4.[ Its aim was to give existing SCO customers a way to "webify" their applications via Ericom's tool and then make the functionality of those applications available via web services.] However, as McBride later conceded, the SCOx WSS failed to gain an audience,[ and it was largely gone from company mention a year later.
]
Views on infringement claims
In the keynote address at its SCO Forum conference in August 2003, held at the MGM Grand Las Vegas
The MGM Grand Las Vegas is a hotel and casino located on the Las Vegas Strip in Paradise, Nevada. The MGM Grand is the largest single hotel in the world with 6,852 rooms. It is also the third-largest hotel complex in the world by number of room ...
, the SCO Group made an expansive defense of its legal actions. Framed by licensed-from-MGM James Bond music and film clips, McBride portrayed SCO as a valiant warrior for the continuance of proprietary software
Proprietary software is computer software, software that is deemed within the free and open-source software to be non-free because its creator, publisher, or other rightsholder or rightsholder partner exercises a legal monopoly afforded by modern ...
, saying they were in "a huge raging battle around the globe", that the GNU General Public License
The GNU General Public License (GNU GPL or simply GPL) is a series of widely used free software licenses that guarantee end user
In product development, an end user (sometimes end-user) is a person who ultimately uses or is intended to ulti ...
that Linux was based on was "about destroying value", and saying that like Bond, they would be thrown into many battles but come out the victor in the end.[
Linux advocates had repeatedly asked SCO to enumerate and show the specific areas of code in Linux that SCO thought were infringing on Unix.][ An analyst for IDC said that if SCO were more forthcoming on the details, "the whole discussion might take a different tone."][ However, SCO was reluctant to show any such code in public, preferring to keep it secret – a strategy that was commonly adopted in intellectual property litigation.]
However during Forum, SCO did publicly show several alleged examples of illegal copying of copyright code in Linux. Until that time, these examples had only been available to people who signed a non-disclosure agreement
A non-disclosure agreement (NDA) is a legal contract or part of a contract between at least two parties that outlines confidential material, knowledge, or information that the parties wish to share with one another for certain purposes, but wis ...
, which had prohibited them from revealing the information shown to them. SCO claimed the infringements were divided into four separate categories: literal copying, obfuscation, derivative works, and non-literal transfers. The example used by SCO to demonstrate literal copying became known as the '' atemalloc'' example. While the name of the original contributor was not revealed by SCO, quick analysis of the code in question pointed to SGI. At this time it was also revealed that the code had already been removed from the Linux kernel, because it duplicated already existing functions.
By early 2004, the small amount of evidence that had been presented publicly was viewed as inconclusive by lawyers and software professionals who were not partisan to either side.[ As ''Businessweek'' wrote, "While there are similarities between some code that SCO claims it owns and material in Linux, it's not clear to software experts that there's a violation."][ The legal considerations involved were complex, and resolved around subtleties such as how the notion of ]derivative work
In copyright law, a derivative work is an expressive creation that includes major copyrightable elements of an original, previously created first work (the underlying work). The derivative work becomes a second, separate work independent in fo ...
s should be applied.[ Furthermore, Novell's argument that it had never transferred copyrights to the Santa Cruz Operation placed a cloud over the SCO Group's legal campaign.][ Most, but not all, industry observers felt that SCO was unlikely to win.][ ''InfoWorld'' drily noted that Las Vegas bookmakers were not giving odds on the battle, but the three analysts it polled gave odds of 6-to-4 against SCO, 200-to-1 against SCO, and 6-to-4 for SCO.]
In any case, while Linux customers may not have been happy about the concerns and threats that the SCO Group was raising, it was unclear whether that was slowing their adoption of Linux; some business media reports indicated that it was,[ or that it might,][ while others indicated that it was not.][
]
"The Most Hated Company In Tech"
The stakes were high in the battle the SCO Group had started, involving the future of Unix, Linux, and open source software in general. If SCO were to win its legal battles, the results could be extremely disruptive to the IT industry, especially if SCO's notion of derivative works were to be construed broadly by the courts. Furthermore a SCO victory would be devastating to the open source movement, especially if the legal validity of the GPL license were to be called into question.[ Conversely, a clear SCO loss would clarify any intellectual property concerns related to Linux, make corporate IT managers feel more relaxed about adopting Linux as a solution, and potentially bolster corporate enthusiasm for the open source movement as a whole.]
Linux advocates were incensed by SCO's actions,[ accusing the company of trying reap financial gain by sowing ]fear, uncertainty, and doubt
Fear, uncertainty and doubt (often shortened to FUD) is a propaganda tactic used in sales, marketing, public relations, politics, polling and cults. FUD is generally a strategy to influence perception by disseminating negative and dubious or fa ...
(FUD) about Linux within the industry.[ Linux creator ]Linus Torvalds
Linus Benedict Torvalds ( , ; born 28 December 1969) is a Finnish software engineer who is the creator and, historically, the lead developer of the Linux kernel, used by Linux distributions and other operating systems such as Android. He also ...
said, "I'd dearly love to hear exactly ''what'' they think is infringing, but they haven't told anybody. Oh, well. They seem to be more interested in FUD than anything else."[ Open source advocate ]Bruce Perens
Bruce Perens (born around 1958) is an American computer programmer and advocate in the free software movement. He created The Open Source Definition and published the first formal announcement and manifesto of open source. He co-founded the Op ...
said of SCO, "They don't care who or what they hurt."[ Industry analyst and open source advocate Gordon Haff said that SCO had thrown a ]dirty bomb
A dirty bomb or radiological dispersal device is a radiological weapon that combines radioactive material with conventional explosives. The purpose of the weapon is to contaminate the area around the dispersal agent/conventional explosion with ...
into the Linux user community.[
Many Linux enthusiasts approached the issue with a moralistic fervor.][
By August 2003, McBride said that pickets had been seen at SCO offices.][ McBride tended to compare Linux to ]Napster
Napster was a peer-to-peer file sharing application. It originally launched on June 1, 1999, with an emphasis on digital audio file distribution. Audio songs shared on the service were typically encoded in the MP3 format. It was founded by Sh ...
in the music world,[ a comparison that could be understood by people outside the technology industry. The assault on open source produced intense feelings in people; ]Ralph Yarro
Ralph J. Yarro is founder/CEO and chairman of ThinkAtomic, Inc. an early stage venture accelerator and incubator of technology firms. He was previously chairman of the board and the largest shareholder in The SCO Group, Inc. and CEO of The Canop ...
, chairman of SCO and head of the Canopy Group, and the person characterized by some as the mastermind behind ''SCO v. IBM'', reported that back in his home area in Utah, "I have had friends, good friends, tell me they can't believe what we're doing."[ Internet message boards such as ]Slashdot
''Slashdot'' (sometimes abbreviated as ''/.'') is a social news website that originally advertised itself as "News for Nerds. Stuff that Matters". It features news stories concerning science, technology, and politics that are submitted and evalu ...
saw many outraged postings.[ The ]Yahoo! Finance
Yahoo! Finance is a media property that is part of the Yahoo! network. It provides financial news, data and commentary including stock quotes, press releases, financial reports, and original content. It also offers some online tools for pers ...
discussion boards, a popular site at the time for investors, were full of messages urging others to sell SCO stock.[
SCO suffered a ]distributed denial-of-service attack
In computing, a denial-of-service attack (DoS attack) is a cyber-attack in which the perpetrator seeks to make a machine or network resource unavailable to its intended users by temporarily or indefinitely disrupting services of a host connect ...
against its website in early May 2003, the first of several times the website would be shut down by hackers.[ One that began in late January 2004] became the most prolonged, when a denial-of-service attack coming out of the Mydoom computer worm prevented access to the sco.com
domain for over a month.
The general IT industry was not pleased with what SCO was doing either. The September 22, 2003 issue of ''InfoWorld
''InfoWorld'' (abbreviated IW) is an information technology media business. Founded in 1978, it began as a monthly magazine. In 2007, it transitioned to a web-only publication. Its parent company today is International Data Group, and its sister ...
'' had a dual-orientation cover that, if read right side up, had thumbs-up picture with the text "If SCO Loses", and if read upside down, had a thumbs-down picture with the text "If SCO Wins".
By February of the following year, ''Businessweek
''Bloomberg Businessweek'', previously known as ''BusinessWeek'', is an American weekly business magazine published fifty times a year. Since 2009, the magazine is owned by New York City-based Bloomberg L.P. The magazine debuted in New York Cit ...
'' was headlining that the SCO Group was "The Most Hated Company In Tech". A similar characterization was made by the Robert X. Cringely
Robert X. Cringely is the pen name of both technology journalist Mark Stephens and a string of writers for a column in ''InfoWorld'', the one-time weekly computer trade newspaper published by IDG.
InfoWorld
Mark Stephens was the third author t ...
-bylined column in ''InfoWorld
''InfoWorld'' (abbreviated IW) is an information technology media business. Founded in 1978, it began as a monthly magazine. In 2007, it transitioned to a web-only publication. Its parent company today is International Data Group, and its sister ...
'', which in March 2004 called SCO "the Most Despised Technology Company". The cover of a May 2004 issue of '' Fortune'' magazine had a photograph of McBride accompanied by the large text "Corporate Enemy No. 1".[ Also cover of issue.] SCO's actions in suing Linux end users was especially responsible for some forms of corporate distaste towards it.[
The company that had previously held that title, Microsoft,][ had by February 2004 spent a reported $12 million on Unix licenses from SCO.][ The industry giant said the licenses were taken out as part of normal intellectual property compliance for their Windows Services for UNIX product, which provided a Unix compatibility environment for higher-end Windows systems.] Linux advocates, however, saw the move as Microsoft looking for a way to fund SCO's lawsuits in an attempt to damage Linux,[ a view that was shared by some other large industry rivals such as ]Oracle Corporation
Oracle Corporation is an American multinational computer technology corporation headquartered in Austin, Texas. In 2020, Oracle was the third-largest software company in the world by revenue and market capitalization. The company sells da ...
's Larry Ellison
Lawrence Joseph Ellison (born August 17, 1944) is an American business magnate and investor who is the co-founder, executive chairman, chief technology officer (CTO) and former chief executive officer (CEO) of the American computer technology ...
.[ Indeed, Linux advocates had seen Microsoft's hand in the SCO Group's actions from almost the beginning; as Bruce Perens wrote in May 2003: "Who really benefits from this mess? Microsoft, whose involvement in getting a defeated Unix company to take on the missionary work of spreading FUD ... about Linux is finally coming to light." The open source community's antipathy towards Microsoft only increased when it became apparent that Microsoft had played at least some role in introducing the SCO Group to BayStar Capital as a potential investment vehicle (both BayStar and Microsoft said there was no stronger role by Microsoft than that).
The distaste for SCO's actions seeped into evaluations of SCO's product line and technical initiatives as well. '']Software Development Times
''Software Development Times'', better known as ''SD Times'', is a magazine published by D2 Emerge, in both a print version and an on-line electronic edition.
History and profile
It has been published since 2000. The first issue appeared in Febr ...
'' acknowledged at one point that "many writers in the tech media, which has a pro-open-source, pro-Linux bias, are subtly or overtly hostile to SCO."[
As an instance, in July 2003 a columnist for '']Computerworld
''Computerworld'' (abbreviated as CW) is an ongoing decades old professional publication which in 2014 "went digital." Its audience is information technology (IT) and business technology professionals, and is available via a publication website ...
'' examined the SCO Group acquisition of Vultus and concluded that the purpose was not to acquire its technology or staff but rather that Canopy was playing "a shell game ... to move its companies around" in order to exploit and cash in on the SCO Group's rising stock price.
As an analyst for RedMonk stated, "Regardless of the technology they have, there are a lot of enterprises that are going to be ticked off with them. Some of them are receiving these letters (demanding license fees for Linux). There's a perception among companies we've spoken to that SCO is really out to get acquired or to make their money off of licensing schemes rather than technologies. That's an obstacle to adoption of their products."[ This kind of attitude was exemplified by an apologetic review of UnixWare 7.1.3 in '' OSNews'' in December 2003 that acknowledged that SCO had "earned their now nefarious reputation of pure evil" but that "SCO does actually sell a product" and that the reviewer had to assess it objectively.]
Another group of people who found the actions of the SCO Group distasteful were some of those familiar with the Santa Cruz Operation, including those who had worked there and those who had written about it; they became protective of that earlier company's reputation, especially given the possible name confusion regarding the two.[ In an '']eWeek
''eWeek'' (''Enterprise Newsweekly'', stylized as ''eWEEK''), formerly PCWeek, is a technology and business magazine. Previously owned by QuinStreet; Nashville, Tennessee marketing company TechnologyAdvice acquired eWeek in 2020.
The print e ...
'' column entitled "SCO: When Bad Things Happen to Good Brands", technology journalist David Coursey wrote that "SCO was a good company with a good reputation. In some ways, SCO was Linux before Linux, popularizing Unix on low-cost Intel machines. ... It's a good brand name that deserves better, or at least a decent burial and a wake. But instead, its memory is being trashed by people who don't and maybe can't appreciate the fondness many of us still have for the old Santa Cruz Operation." Science fiction author Charles Stross
Charles David George "Charlie" Stross (born 18 October 1964) is a British writer of science fiction and fantasy. Stross specialises in hard science fiction and space opera. Between 1994 and 2004, he was also an active writer for the magazine ...
, who had worked as a tech writer in the original SCO's office in England in the early-mid-1990s, called the SCO Group "the brain-eating zombie of the UNIX world" that had done little more than "play merry hell with the Linux community and take a copious metaphorical shit all over my resumé." More simply, former original SCO employee turned journalist and publisher Sara Isenberg, in writing about the history of tech companies in the Santa Cruz area, wrote about The SCO Group, "I'll spare you the sordid legal details, but by then, it was no longer our SCO."
To be sure, not all former original-SCO employees necessarily felt that way. The company still had developers and other staff at the original Santa Cruz location, as well as at the Murray Hill, New Jersey
Murray Hill is an unincorporated community located within portions of both Berkeley Heights and New Providence, located in Union County in northern New Jersey, United States.
It is the longtime central location of Bell Labs (part of Nokia ...
office[ that dated back not just to the original SCO but to Novell and Unix System Laboratories and AT&T before that.][ There was also a development office in ]Delhi, India
Delhi, officially the National Capital Territory (NCT) of Delhi, is a city and a union territory of India containing New Delhi, the capital of India. Straddling the Yamuna river, primarily its western or right bank, Delhi shares borders ...
,[ as well as regional offices that in many cases came from original SCO. And in 2006, Santa Cruz Operation co-founder Doug Michels made a return to the SCO Forum stage, with McBride presenting him an award for lifetime achievement.
A major factor in the SCO–Linux battle was the Groklaw website and its author, paralegal Pamela Jones.][ The site explained in depth the legal principles and procedures that would be involved in the different court cases – giving technology-oriented readers a level of understanding of legal matters they would otherwise not have – and pulled together in an easily browsed form a massive number of official court documents and filings.][ Additionally, some Groklaw readers attended the court hearings in person and posted their detailed observations afterward.][ Accompanying these valuable data points on Groklaw was an interpretative commentary, from both Jones and her readers, that was relentlessly pro-open source and anti-SCO, to the point where journalist ]Andrew Orlowski
Andrew Orlowski (born 1966) is a British columnist, investigative journalist and former executive editor of the IT news and opinion website ''The Register''. In 2021, Orlowski became a business columnist for ''The Daily Telegraph''.
Journalism ...
of ''The Register
''The Register'' is a British technology news website co-founded in 1994 by Mike Magee, John Lettice and Ross Alderson. The online newspaper's masthead sublogo is "''Biting the hand that feeds IT''." Their primary focus is information tech ...
'' pointed out that Groklaw sometimes suffered badly from an online echo chamber effect. In any case, such was Groklaw's influence that SCO made thinly veiled accusations that Jones was, in fact, working on behest of IBM, something that she categorically denied.[ and the follow-up ]
The personification of the SCO–Linux battle was no doubt McBride,[ who was viewed by many as a villain.][ Columnist Maureen O'Gara, generally seen as at least somewhat sympathetic to SCO's position, characterized McBride as "the most hated man in the computer industry".] McBride acknowledged, "I know people want us to go away, but we are not going to go away. We're going to see this through."[ The '']Sunday New York Times
''The New York Times'' (''the Times'', ''NYT'', or the Gray Lady) is a daily newspaper based in New York City with a worldwide readership reported in 2020 to comprise a declining 840,000 paid print subscribers, and a growing 6 million paid ...
'' business section's "Executive Life" feature ran a self-profile of McBride in February 2004, in which he reflected upon his no-nonsense father raising him on a ranch and the difficulties of being a Mormon missionary
Missionaries of the Church of Jesus Christ of Latter-day Saints (LDS Church)—widely known as Mormon missionaries—are volunteer representatives of the church who engage variously in proselytizing, church service, humanitarian aid, and commu ...
in Japan and later a Novell executive there, and concluded, "I am absolutely driven by people saying I can't do something."
McBride received death threats serious enough to warrant extra security during his public appearances.[ Asked in May 2004 to reflect upon what the preceding year had been like, McBride said "This is like ... nothing ... nothing compares to what's happened in the last year."][
]
Financial aspects
SCO's legal campaign coincided with the best financial results it would have, when in fiscal 2003 they had revenues of $79 million and a profit of $3.4 million. The campaign was also initially very beneficial to its stock price. The stock had been under $1.50 in December 2002 and reached a high of $22.29 during mid-October 2003. In some cases jumps in the price occurred when stock analyst
A financial analyst is a professional, undertaking financial analysis for external or internal clients as a core feature of the job.
The role may specifically be titled securities analyst, research analyst, equity analyst, investment analyst, ...
s initiated coverage of the stock and gave optimistic price targets for it.
But the stock began a downward slide soon after that, and by the end of 2003 about a quarter of all outstanding shares were controlled by short sellers.[ SCOsource revenue was erratic, with the first half of fiscal 2004 being especially poor.][
The SCO group had 340 employees worldwide when the lawsuits were first underway in 2003. By a year later, this count had fallen somewhat to 305 employees.][
During 2004, SCO and BayStar had a falling out,][ in part due to the investment firm being unhappy with SCO's constant presence in the headlines and the passionate arguments it was involved in with open source advocates, and in part due to the ongoing expenses of running a struggling software products business.] Both BayStar and Royal Bank of Canada
Royal Bank of Canada (RBC; french: Banque royale du Canada) is a Canadian multinational financial services company and the largest bank in Canada by market capitalization. The bank serves over 17 million clients and has more than 89,000& ...
, which had been part of the initial placement, bought out of the investment by mid-year.[ Nevertheless, by the calculation of the '']Deseret News
The ''Deseret News'' () is the oldest continuously operating publication in the American west. Its multi-platform products feature journalism and commentary across the fields of politics, culture, family life, faith, sports, and entertainment. Th ...
'', SCO had gained a net $37 million out of the arrangement.
Legal actions were a large expense, costing the SCO Group several million dollars each quarter and hurting financial results.[ For its third quarter of fiscal 2004, for instance, the company reported revenue of $11.2 million and a loss of $7.4 million, of which $7.2 million was legal expenses.] To that point, the company had spent a total of some $15 million on such costs. Accordingly, in August 2004, SCO renegotiated its deal with its lawyers to put into place a cap on legal expenses at $31 million, in return for which Boise, Schiller & Flexner would receive a larger share of any eventual settlement.[
McBride continued to come up with new ideas; at the 2004 Forum show he talked about the SCO Marketplace Initiative, which would set up an online exchange where developers could bid on work-for-hire jobs for SCO Unix enhancements that were otherwise not on the SCO product roadmap.][ Besides helping SCO out, this would set up an alternative to the open source model, one where programmers could "develop-for-fee" rather than "develop-for-free".] McBride ultimately envisioned it becoming "an online distribution engine for business applications from a wide variety companies and solution providers."[ The SCO Marketplace began operation a couple of months later, with jobs posted including the writing of device drivers.]
The stock slide continued, and by September 2004 had fallen below the $4 level.[ The company had some 230 employees worldwide at that point.][
During the latter portion of 2004, the California office of the company moved out of Santa Cruz proper, as its longtime 400 Encinal Street office building was mostly empty.][ The thirty employees still remaining took new space on Scotts Valley Drive in nearby ]Scotts Valley, California
Scotts Valley is a small city in Santa Cruz County, California, United States, about thirty miles (48 km) south of downtown San Jose and six miles (10 km) north of the city of Santa Cruz, in the upland slope of the Santa Cruz Mounta ...
.
By early 2005, the SCO Group was in definite financial trouble. Its court case against IBM did not seem to be going well.[ Sales for fiscal 2004 dropped by 46 percent compared to the year prior, to less than $43 million, and losses rose by a factor of three to over $16 million. Results for the full fiscal 2004 year were bad: revenues dropped by 46 percent compared to the year prior,] falling to around $43 million, and there was a loss on that of over $28 million.[ The company had to restate three of its quarterly earnings statements due to accounting mistakes and was at risk of being delisted by NASDAQ.][ During the previous year it had laid off around 100 people, constituting a third of its workforce,][ and by August 2005 the headcount had fallen to under 200.][
The company became independent of The Canopy Group in March 2005, after the settlement of a lawsuit between the Noorda family and Yarro.] As part of the settlement, Canopy transferred all of its shares to Yarro.
Meanwhile, products
Company emphasis
While there was an industry impression that the SCO Group was far more focused on lawsuits than bringing forward new and improved products,[ throughout this period, the large majority of SCO employees were not involved with the legal battle but rather were working on software products.][ This was a point that McBride never hesitated to point out, for instance saying in August 2005 that the company was spending "98 percent of our resources" on new product development, and only two percent on the active cases in court with AutoZone, IBM, and Novell.] The idea of the SCO Group becoming a lawsuits-only company had been proposed by BayStar but it was not something McBride wanted to do.[ Indeed, McBride expressed at least public optimism that the company could survive on its Unix and other product business even if it lost the court cases.]
Nevertheless, there were significant challenges in the product space, as operating system revenue had been falling.[ SCO still had a market presence in some of its traditional strongholds, such as pharmacy chains and fast-food restaurants.][ But to some extent, the reliability and stability of products such as OpenServer (and the applications they were typically used for) worked against SCO, as customers did not feel an urgent need to upgrade.][
UnixWare 7.1.4 was released in June 2004, with major new features including additional hardware support, improved security, and the abovementioned SCOx web services components. A review in '']Network World
International Data Group (IDG, Inc.) is a market intelligence and demand generation company focused on the technology industry. IDG, Inc.’s mission is centered around supporting the technology industry through research, data, marketing technol ...
'' found that the operating system showed strength in terms of server performance and support for Apache and related open source components, but suffered in terms of hardware discovery and ease of installation. The Linux Kernel Personality (LKP), which had earlier been a major selling point of UnixWare 7, was now removed from the product due to the ongoing legal complications.[ But UnixWare 7.1.4 did come with the OpenServer Kernel Personality (OKP), which allowed OpenServer-built binary applications to run on the more powerful UnixWare platform without modification, and which had earlier been released as an add-on to UnixWare 7.1.3.
SCO announced a Unix roadmap along with the UnixWare release, intending to convince the market that it was making a strong push in software products. Among the items talked about was Smallfoot, a toolkit for developing customized, small-footprint versions of UnixWare for use as an ]embedded operating system
An embedded operating system is an operating system for embedded computer systems. Embedded operating systems are computer systems designed to increase functionality and reliability for achieving a specific task. Resource efficiency comes at the ...
, and an upgrade to the SCOoffice mail and messaging product.[ Also sidebar "SCO's Unix Product Plan".] But a constant concern was that SCO had difficulty in attracting independent software vendors to support its operating system platform.[ Perhaps the biggest such hurdle was the lack of support for current versions of the ]Oracle Database
Oracle Database (commonly referred to as Oracle DBMS, Oracle Autonomous Database, or simply as Oracle) is a multi-model database management system produced and marketed by Oracle Corporation.
It is a database commonly used for running online ...
product. Of the problem in general, a manager at a longtime SCO replicated-site customer, Shoppers Drug Mart
Shoppers Drug Mart Inc. (named Pharmaprix in Quebec) is a Canadian retail pharmacy chain based in Toronto, Ontario. It has more than 1,300 stores in nine provinces and two territories.
The company was founded by pharmacist Murray Koffler in 196 ...
in Canada, that was migrating to UnixWare 7.1.4 and was otherwise happy with the product's reliability and performance, said: "ig ISVs IG, Ig, or ig may refer to:
Companies
* IG Farben, a former German industrial conglomerate
* IG Group, a UK financial services company
* IG Recordings, a record label formed by the Indigo Girls, an American folk/rock duo
* Production I.G, a Japan ...
are pushing SCO down to a tier-three vendor. We need a tier-one or a tier-two vendor that will do current ports and certification. We listen to vendors and watch their roadmaps and when SCO disappears that will be a signal o move on
O, or o, is the fifteenth letter and the fourth vowel letter in the Latin alphabet, used in the modern English alphabet, the alphabets of other western European languages and others worldwide. Its name in English is ''o'' (pronounced ), plu ...
"
The new SCOoffice release, SCOoffice Server 4.1 for OpenServer 5.0.7, came out in August 2004. SCOoffice consisted of a mixture of proprietary code and open source components and was marketed as a drop-in alternative to Microsoft Exchange Server
Microsoft Exchange Server is a mail server and calendaring server developed by Microsoft. It runs exclusively on Windows Server operating systems.
The first version was called Exchange Server 4.0, to position it as the successor to the related ...
for small-to-medium businesses, one that would be compatible with Microsoft Outlook
Microsoft Outlook is a personal information manager software system from Microsoft, available as a part of the Microsoft Office and Microsoft 365 software suites. Though primarily an email client, Outlook also includes such functions as c ...
(and other common mail clients) but would be less expensive in total cost, be built upon on a more reliable operating system, and have a management interface that could be used by non-technical administrators.[ Some of the specific technology in the product for interacting with Outlook functions came from Bynari. A review of the SCOoffice technology in '' PCQuest'' in 2002 found its ease of installation and features to be good and that it was "a decent package for companies looking for a mail server solution."][ Shortly after the review was published, the Volution Messaging Server was rebranded to SCOoffice.] When originally built by Caldera International, the messaging product had been based on Linux (and UnixWare via LKP), but following the SCO Group's legal actions against Linux it was changed to be based on OpenServer instead,[ with some disruption to the components that could be included within it. The 4.1 release also contained office collaboration tools for meetings, contacts, and the like.][ SCOoffice was a consistent product for the SCO Group; at least one, and usually more than one, breakout session about it was held at every Forum conference during the SCO Group era.
]
"Legend"
By 2005, more than 60 percent of SCO's revenue was still coming from its OpenServer product line and associated support services.[ This was despite the fact that there had been no major releases to the product in the time since the Santa Cruz Operation and Caldera Systems had merged in 2000.][ Accordingly, the SCO Group devoted a large effort, consisting of extensive research and development as well as associated product management activities, into producing the more modern OpenServer Release 6, code-named "Legend".][ After a couple of slips from announced target dates,][ it was made generally available in June 2005.][
The key idea behind Legend was to transplant the UnixWare SVR5 kernel into the OpenServer everything else.][ This gave OpenServer 6 the ability to support 1TB file sizes, the lack of which had become a major limitation of OpenServer 5.] In addition, OpenServer 6 could support up to 32 processors, up to 64GB of RAM, had various new security capabilities such as SSH, an IPFilter-based firewall, and IPsec
In computing, Internet Protocol Security (IPsec) is a secure network protocol suite that authenticates and encrypts packets of data to provide secure encrypted communication between two computers over an Internet Protocol network. It is used in ...
for secure VPNs, and had faster throughput for applications which could make use of real multiple threading.[
The launch event was held on June 22, 2005, at ]Yankee Stadium
Yankee Stadium is a baseball stadium located in the Bronx, New York City. It is the home field of the New York Yankees of Major League Baseball, and New York City FC of Major League Soccer.
Opened in April 2009, the stadium replaced the orig ...
in New York City. (This prompted a few industry publication headlines of the "SCO Goes To Bat With OpenServer 6" variety.) Hewlett-Packard noted its support for OpenServer 6 on its ProLiant systems. Some SCO partners were quoted as saying they intended to migrate to it.[
While some analysts, such as those for IDS and Quandt Analytics, expressed the belief that the release could help SCO upgrade and hold onto its existing customer base, an analyst for Illuminata Inc. was not so optimistic, saying, "In a word, no. Looked at in isolation, there's a lot to like about the new OpenServer. It adds a lot of new capabilities and it finally largely merges the OpenServer and UnixWare trees. But OpenServer is in wild decline – the victim of Windows, Linux and years of SCO mismanagement. Today's SCO is a pariah of the IT industry ... OpenServer is a niche product; SCO needs a miracle."]
In practice, despite the good reviews it got from a technical perspective, sales of OpenServer 6 were modest.[ The company continued to do poorly financially, with fiscal 2005 producing revenues of $36 million and a loss on that of almost $11 million, while fiscal 2006 saw revenues of $29 million together with a loss of over $16 million.] Reductions in staff continued and the Scotts Valley office was shut down in late 2006.
Mobility and Me Inc.
The SCO Group's biggest initiative to find a new software business came with what it called Me Inc., first announced at a DEMO conference in California in September 2005.
Me Inc. sought to capitalize on the emergence of smartphone
A smartphone is a portable computer device that combines mobile telephone and computing functions into one unit. They are distinguished from feature phones by their stronger hardware capabilities and extensive mobile operating systems, whic ...
s in that it would provide both mobile app
A mobile application or app is a computer program or software application designed to run on a mobile device such as a phone, tablet, or watch. Mobile applications often stand in contrast to desktop applications which are designed to run on ...
s that would run on the phones and an architecture involving a network "edge processor" that would offload processing and storage from the phones themselves and handle authentication, session management, and aggregation of data requests.[ In such an approach, Me Inc. represented a hosted ]software as a service
Software as a service (SaaS ) is a software licensing and delivery model in which software is licensed on a subscription basis and is centrally hosted. SaaS is also known as "on-demand software" and Web-based/Web-hosted software.
SaaS is co ...
(SaaS) offering,[ with the edge processor representing what would later become referred to as both edge computing and ]mobile backend as a service
Mobile backend as a service (MBaaS), also known as "backend as a service", is a model for providing web app and mobile app developers with a way to link their applications to backend cloud storage and APIs exposed by back end applications while ...
. Some of the engineering effort behind Me Inc. came from former Vultus staff, following the failure of the prior SCOx efforts to find a market.[ Me Inc. initially targeted the ]Palm Treo
The Palm Treo (stylized as Trēo) is a discontinued line of smartphones originally developed by Handspring, which was bought by Palm, Inc. They were then manufactured and maintained by Palm, Inc. Treos had a number of integrated features such ...
line of smartphones.[ Subsequent support was put into place for the ]Windows Mobile
Windows Mobile is a discontinued family of mobile operating systems developed by Microsoft for smartphones and personal digital assistants.
Its origin dated back to Windows CE in 1996, though Windows Mobile itself first appeared in 2000 as Pock ...
line of smartphones and some others.[
The first services from Me Inc. were Shout, in which users could broadcast text or voice messages from a phone to large groups; Vote, in which users could post surveys to large groups and quickly receive a tally back; and Action, in which users could post tasks for others to do and monitor their statuses.][ An early user of the Shout service was ]Utah State University
Utah State University (USU or Utah State) is a public land-grant research university in Logan, Utah. It is accredited by the Northwest Commission on Colleges and Universities. With nearly 20,000 students living on or near campus, USU is Uta ...
, which used it for broadcasting messages to members of its sports booster organization.[ Me Inc. services were subsequently used by other Utah organizations as well, including the ]Utah Jazz
The Utah Jazz are an American professional basketball team based in Salt Lake City. The Jazz compete in the National Basketball Association (NBA) as a member of the league's Western Conference, Northwest Division. Since the 1991–92 season, ...
, the BYU Cougars
The BYU Cougars are the intercollegiate athletic teams that represent Brigham Young University (BYU), located in Provo, Utah. BYU fields 21 National Collegiate Athletic Association (NCAA) varsity athletic teams. They are a member of the West Co ...
, and Mayor of Provo Lewis Billings
Lewis Kevin Billings (born 1956) is an American politician who served as mayor of Provo, Utah from 1998 to 2010.
Education
Billings studied engineering, technology and business at Brigham Young University (BYU).
Career
He rose through the r ...
.[
In February 2006, SCO announced that the edge processor had the product name EdgeClick.] The development environment for it was branded the EdgeBuilder SDK.[ In addition, a website ]EdgeClickPark.com
was announced, that would act as an Internet ecosystem for the development and selling of mobile applications and services.[ As SCO marketing executive Tim Negris said, the idea of EdgeClickPark was to provide a mechanism for "individuals and organizations of all kinds to participate in developing, selling and using digital services."][ Many of these services would come not from SCO itself but from SCO partners, resellers, and ISVs,][ a channel it was familiar with from the original SCO era.][ This was reminiscent of McBride's goal for the pre-lawsuits SCOBiz and the post-lawsuits SCO Marketplace Initiative, and McBride had similarly large ambitions for Me Inc. and EdgeClickPark, envisioning it having the same role for mobile software that iTunes had at the time for digital music.][
McBride, who had been looking at various new business opportunities for SCO to enter, saw the company's mobility initiative as something that could become a big success in both the business and consumer spaces, saying "We don't know for sure, but we have a little bit of a spark in our eyes that this will be a big deal."][ The SCO Group's chief technology officer, Sandy Gupta, stated that for the company, "this is clearly a big switch in paradigm."][ Industry analysts thought that Me Inc. was aimed at something there was clearly a large market for.][ As one said, "The operating system market is an increasingly difficult place to compete. SCO Group really does need more diversity ndthese recent pushes represent significant diversification of their product portfolio."][ ''Software Development Times'' commended SCO for coming up with the EdgeClickPark idea, saying that it showed an "interesting flair" in providing a place for partnerships and business development.] The company also undertook the proposing of customized mobile applications for various businesses and organizations, using the Me Inc. platform as a starting point.
However, the SCO Group being able to succeed in these efforts faced somewhat long odds, in part due to their being up against many kinds of competition in the mobile space and in part due to the negative feelings about SCO that their campaign against Linux had engendered.
Nevertheless, it was all viewed as a positive development; as ''Software Development Times
''Software Development Times'', better known as ''SD Times'', is a magazine published by D2 Emerge, in both a print version and an on-line electronic edition.
History and profile
It has been published since 2000. The first issue appeared in Febr ...
'' summarized in a subheading, "Strategy shift to mobile seen as better 'than suing people'".
SCO's mobility initiative was a main theme of the 2006 instance of its SCO Forum conference,[ held at ]The Mirage
The Mirage is a casino resort on the Las Vegas Strip in Paradise, Nevada, United States. It is owned by Vici Properties and operated by Hard Rock International. The 65-acre property includes a casino and 3,044 rooms.
Golden Nugget, Inc., led ...
in Las Vegas. McBride said, "Today is the coming out party for Me Inc. Over the next few years, we want to be a leading provider of mobile application software to the marketplace. ... This is a seminal moment for us." The Forum 2006 schedule, subtitled "Mobility Everywhere", held some nineteen different breakout and training sessions related to Me Inc. and EdgeClick, compared to twenty-six sessions for operating system related topics. Eager to drum up interest in the EdgeClick infrastructure and to get developers to attend the 2006 instance of SCO Forum, McBride offered a prize to the developer of the best application built from the EdgeBuilder SDK: a 507-horsepower, V10-engined BMW M5 sports sedan.
One new mobility offering, HipCheck, which allowed the remote monitoring and administration of business-critical servers on smartphones, was given its debut announcement and demonstration at Forum. The HipCheck service, which gave system administrators the ability to conduct secure actions from their phone to correct some kinds of server anomalies or respond to user requests such as resetting passwords,[ was officially made available in October 2006, with support for monitoring agents running on various levels of Windows and Unix systems. Several upgrades to HipCheck were subsequently made available.]
Developed by SCO for FranklinCovey
Franklin Covey Co., trading as FranklinCovey and based in Salt Lake City, Utah, is a coaching company which provides training and assessment services in the areas of leadership, individual effectiveness, and business execution for organizations a ...
, a Utah-based company that had a line of paper-based planning and organizational products, FCmobilelife was an app for handling personal and organizational task and goal management. (In 2006, SCO had been building a similar app for Day-Timer
Day-Timer is an American manufacturer of personal organizers and other paper-based time management and organizational tools. It was founded in 1951 and by the 1980s had a popular and successful business. In the 21st century, however, the compan ...
named DT4, but that collaboration fell through.) In particular, the FCmobilelife app emulated FranklinCovey's methodologies for planning and productivity.[ Initial versions were released for the ]Windows Mobile
Windows Mobile is a discontinued family of mobile operating systems developed by Microsoft for smartphones and personal digital assistants.
Its origin dated back to Windows CE in 1996, though Windows Mobile itself first appeared in 2000 as Pock ...
and BlackBerry
The blackberry is an edible fruit produced by many species in the genus ''Rubus'' in the family Rosaceae, hybrids among these species within the subgenus ''Rubus'', and hybrids between the subgenera ''Rubus'' and ''Idaeobatus''. The taxonomy of ...
phones; an app for the iPhone was released in mid-2009.
In October 2008, during SCO Tec Forum 2008
SCO Forum was a technical computer conference sponsored by the Santa Cruz Operation (SCO), briefly by Caldera International, and later The SCO Group that took place during the 1980s through 2000s. It was held annually, most often in August of ea ...
, the last Forum ever held, the SCO Mobile Server platform was announced, which was a bundling of the Edgeclick server-side functionality and Me Inc. client development kit on top of a UnixWare 7 or Openserver 6 system. By then UnixWare itself, the company's flagship product, had not seen a new release in some four years.[
In the end, despite the company's efforts, the mobile services offerings did not attract that much attention or revenues in the marketplace.][
]
Life in bankruptcy
An adverse ruling
On August 10, 2007, SCO suffered a major adverse ruling in the ''SCO v. Novell'' case that rejected SCO's claim of ownership of Unix-related copyrights and undermined much of the rest of its overall legal position.[ Judge Dale A. Kimball of the ]United States District Court for the District of Utah
The United States District Court for the District of Utah (in case citations, D. Utah) is the federal district court whose jurisdiction is the state of Utah. The court is based in Salt Lake City with another courtroom leased in thstate courtho ...
issued a 102-page summary judgment which found that Novell, not the SCO Group, was the owner of the Unix copyrights; that Novell could force SCO to drop its copyrights-based claims against IBM; and most immediately from a financial perspective, that SCO owed Novell 95 percent of the revenues generated by the licensing of Unix to companies such as Microsoft and Sun. The only SCO claims left intact by Kimball's judgment were ones against IBM related to contractual provisions from Project Monterey. As the Utah Valley-based ''Daily Herald
Daily or The Daily may refer to:
Journalism
* Daily newspaper, newspaper issued on five to seven day of most weeks
* ''The Daily'' (podcast), a podcast by ''The New York Times''
* ''The Daily'' (News Corporation), a defunct US-based iPad new ...
'' newspaper subsequently wrote, Kimball's ruling was "a massive legal setback" for SCO.[
An appeal was filed.][ Meanwhile, the company had few options left,][ as it had not been doing well anyway – by mid-2007, SCO Group stock had fallen to around $1.56 in value][ – and it now potentially owed Novell more money than it could pay. On September 14, 2008,][ the SCO Group filed a voluntary petition for reorganization under ]Chapter 11 of the United States Bankruptcy Code
Chapter 11 of the United States Bankruptcy Code (Title 11 of the United States Code) permits reorganization under the bankruptcy laws of the United States. Such reorganization, known as Chapter 11 bankruptcy, is available to every business, wheth ...
.[ Development work continued on both the operating system and mobility fronts,][ but selling a technology product while in bankruptcy was challenging. And from this point on, many of SCO's actions were dependent upon the approval of the ]United States Bankruptcy Court
United States bankruptcy courts are courts created under Article I of the United States Constitution. The current system of bankruptcy courts was created by the United States Congress in 1978, effective April 1, 1984. United States bankruptcy c ...
for the District of Delaware.[ Annual results for fiscal 2007 showed yet another decline for the company, with revenues falling to $22 million and a loss of nearly $7 million.] And because of the bankruptcy filing, SCO was delisted from NASDAQ on December 27, 2007. Downsizing continued, and the New Jersey development office was moved to smaller space in Florham Park, New Jersey in late 2008.
Potential buyers
The interest of Stephen Norris Capital Partners in the SCO Group started in February 2008, when it put forward a $100 million reorganization and debt financing plan for the company, which it would then take private. Stephen L. Norris
Stephen L. Norris is one of the co-founders of Carlyle Group, The Carlyle Group, an American private equity firm and previously the Chairman of Gulf Capital Partners. He is a former member of the Federal Retirement Thrift Investment Board, who wa ...
had been a co-founder of the large and well-known private equity firm The Carlyle Group
The Carlyle Group is a multinational private equity, alternative asset management and financial services corporation based in the United States with $376 billion of assets under management. It specializes in private equity, real assets, and ...
. There was also an unnamed Middle East partner in the proposed deal; the Associated Press
The Associated Press (AP) is an American non-profit news agency headquartered in New York City. Founded in 1846, it operates as a cooperative, unincorporated association. It produces news reports that are distributed to its members, U.S. n ...
reported that Prince Al-Waleed bin Talal
Al Waleed bin Talal Al Saud ( ar, الوليد بن طلال آل سعود; born 7 March 1955) is a Saudi Arabian billionaire businessman, investor, philanthropist and royal. He was listed on ''Time'' magazine's Time 100, an annual list of the hu ...
of Saudi Arabia was involved.
But after a couple of months of due diligence
Due diligence is the investigation or exercise of care that a reasonable business or person is normally expected to take before entering into an agreement or contract with another party or an act with a certain standard of care.
It can be a ...
investigation of SCO's operations, finances, and legal situation,
Stephen Norris Capital Partners considered a different course of action, instead proposing to purchase SCO assets outright.
Norris appeared on stage at Forum in October 2008, where possible acquisition and investments plans were shown to attendees.
The company continued to have declining financial performance; the yearly results for fiscal 2008 showed revenues falling to $16 million and a loss of $8.7 million. In January 2009, the SCO Group asked the bankruptcy court to approve a plan wherein its Unix and mobility assets would be put up for public auction.
That plan did not materialize,[ and instead in June 2009 a new proposal emerged from a combination of ]Gulf Capital Partners
A gulf is a large inlet from the ocean into the landmass, typically with a narrower opening than a bay, but that is not observable in all geographic areas so named. The term gulf was traditionally used for large highly-indented navigable bodies ...
, of which Stephen Norris was an investor, and MerchantBridge, a London-based, Middle East-focused private equity group, to create an entity called UnXis, which would then buy SCO's software business assets for $2.4 million.[ At that point the SCO Group had fewer than 70 employees left.] This latest plan, too, did not move forward.
Virtualization
The SCO Group's last significant engineering effort revolved around capitalizing on a resurgence of industry interest in hardware virtualization
Hardware virtualization is the virtualization of computers as complete hardware platforms, certain logical abstractions of their componentry, or only the functionality required to run various operating systems. Virtualization hides the physic ...
. In this case, such virtualization allowed SCO operating systems to run on newer, more powerful hardware even if SCO did not have support or certification for that hardware, and also allowed SCO customers to take advantage of server consolidation and other benefits of a virtual environment. The initial such release, SCO OpenServer 5.0.7V, came out in August 2009, with support for running on VMware ESX/ESXi hypervisors. The technical changes involved included adding enhanced virtual drivers for storage, networking, and peripherals to the operating system as well as tuning its memory management strategies for the virtual environment.[
The virtualization push also included a change in SCO's licensing infrastructure, wherein now licensing would be done on an annual subscription basis.
The company said it would make similar 'V' releases for UnixWare 7.1.4 and OpenServer 6 in the future,][ but no such releases took place during the SCO Group's lifetime. However, support for the ]Microsoft Hyper-V
Microsoft Hyper-V, codenamed Viridian, and briefly known before its release as Windows Server Virtualization, is a native hypervisor; it can create virtual machines on x86-64 systems running Windows. Starting with Windows 8, Hyper-V superseded Win ...
hypervisor for OpenServer 5.0.7V was added in early 2010.
Trustee and trial
On August 25, 2009, Edward N. Cahn
Edward Norman Cahn (born June 29, 1933) is a former United States district judge of the United States District Court for the Eastern District of Pennsylvania.
Education and career
Cahn was born in Allentown, Pennsylvania. He attended Lehigh U ...
, a former United States district judge
The United States district courts are the trial courts of the U.S. federal judiciary. There is one district court for each federal judicial district, which each cover one U.S. state or, in some cases, a portion of a state. Each district cou ...
of the and a counsel for the law firm of Blank Rome
Blank Rome (formerly known as Blank Rome Comisky & McCauley) is an Am Law 100 firm (ranked 81st in the 2019 AmLaw 100 Survey) with 14 offices and more than 600 attorneys and principals who provide legal and advocacy services to clients in the Un ...
, was appointed Chapter 11 trustee for The SCO Group.
In October 2009, a restructuring requested by trustee Cahn led to the termination of McBride and the elimination of the CEO position; the existing COO, Jeff Hunsaker, became the top executive in the company. Perhaps the kindest industry press assessment of McBride's tenure came in a column from Steven J. Vaughan-Nichols in ''Computerworld
''Computerworld'' (abbreviated as CW) is an ongoing decades old professional publication which in 2014 "went digital." Its audience is information technology (IT) and business technology professionals, and is available via a publication website ...
'', who wrote, "You have to give McBride credit. While I dislike SCO, he did an amazing job of fighting a hopeless battle. It's a pity he was working so hard and so well for such a fundamentally wrong cause."
SCO had appealed the August 2007 summary judgment against it in ''SCO v. Novell'' and eventually an appeals court had ruled that a trial had to be held on the issue. A three-week trial was held in March 2010, at the conclusion of which the jury reached a unanimous verdict that the Novell did not transfer the Unix copyrights to the Santa Cruz Operation in 1995. The decision spelled the end for the large majority of the SCO Group's legal offensive, leaving only contractual claims against IBM to possibly still pursue.
Sale of assets
In April 2010, SCO's mobility software assets were sold to former CEO McBride for $100,000. In September 2010 the SCO Group finally put up the remainder of its non-lawsuit assets for public auction.
Thus in February 2011, another proposal was made, this time for $600,000, with this iteration of a purchasing company being backed by Norris, MerchantBridge, and Gerson Global Advisors Gerson may refer to:
Given name:
* Gerson von Bleichröder (1822–1893), Jewish German banker
* Gérson Caçapa (born 1967), Brazilian former footballer
*Gerson Goldhaber (1924–2010), German-born American particle physicist and astrophysicist
*G ...
.
The bankruptcy court approved this proposal, as the only other bid submitted was for $18.
The sale was closed on April 11, 2011, with Stephen Norris Capital Partners and MerchantBridge being the final buyers, and UnXis was formed. In particular, UnXis took over the product names, ownership, and maintenance of The SCO Group's flagship operating system products, OpenServer and UnixWare. It also took over some service contracts for existing SCO Group customers; these customers represented some 82 countries and business segments such as finance, retail, fast food, and governmental entities. It would be up to UnXis to hire SCO Group employees, of whom, after years of layoffs and attrition, only handfuls were still left at various locations (for instance, at the Lindon, Utah site, only 7 or 8 people still worked, compared with 115 as recently as February 2008).[
The SCO Group's litigation rights against IBM and Novell did not transfer, as UnXis said it had no involvement or interest in such activities.][ What was left of The SCO Group renamed itself to The TSG Group.][
]
Aftermath
The TSG Group
The TSG Group did not have employees ''per se''; any at the Utah site not hired by UnXis were let go.[ The jury trial verdict was appealed, but in August 2011 the U.S. 10th Circuit Court of Appeals upheld the verdict and the judge's orders following it,] thus bringing to a final end ''SCO v. Novell''.[
However, in November 2011 the bankruptcy trustee decided to go on with the surviving contractual claims against IBM, saying that "the Novell ruling does not impact the viability of the estate's claims against IBM." The ''SCO v. IBM'' case had previously been closed pending the result of the ''SCO v. Novell'' case.][
Nonetheless, there was no actual business being conducted by the TSG Group, and in August 2012 they filed to convert their status from Chapter 11 reorganization to ]Chapter 7 liquidation
Chapter 7 of Title 11 of the United States Code (Bankruptcy Code) governs the process of liquidation under the bankruptcy laws of the United States, in contrast to Chapters 11 and 13, which govern the process of ''reorganization'' of a debtor ...
, stating that "there is no reasonable chance of 'rehabilitation'".[
In June 2013, a judge granted the motion of the brankruptcy trustee and reopened consideration of ''SCO v. IBM''.] The revived case moved slowly, with a ruling in 2016 being in the favorable direction to IBM, but one in 2017 favorable towards continuing the SCO claims. Industry publications greeted these developments with headlines of the "What is dead may never die" variety.[
UnXis changed its name to Xinuos in 2013, and despite ''SCO v. IBM'' having been reopened in the courts, reiterated that it had no interest in litigation. Instead Xinuos focused on continuing support for UnixWare and OpenServer customers as well as releasing OpenServer 10, a ]FreeBSD
FreeBSD is a free and open-source Unix-like operating system descended from the Berkeley Software Distribution (BSD), which was based on Research Unix. The first version of FreeBSD was released in 1993. In 2005, FreeBSD was the most popular ...
-based product that legacy customers could migrate to.
McBride turned his purchase of SCO's mobility assets into a company called Shout TV Inc., which was founded in late 2011 and provided social media engagement for sports fans during live events by offering trivia games and prize contests. By 2015, Shout TV had experienced some success, especially in partnership with the Spanish football club Real Madrid
Real Madrid Club de Fútbol (, meaning ''Royal Madrid Football Club''), commonly referred to as Real Madrid, is a Spanish professional football club based in Madrid.
Founded in 1902 as Madrid Football Club, the club has traditionally wor ...
. The assets of Shout TV were transferred to a company known as MMA Global Inc. in 2018.
Final conclusion of lawsuits
In August 2021, word came of a possible final settlement in the ''SCO v. IBM'' case, wherein documents filed in the case indicated that the bankruptcy trustee for TSG Group and IBM appeared to be on the verge of settling the outstanding, Project Monterey-based, claims in the matter for $14.25 million.[ While the amount was far less than the SCO Group had originally sought when it began the lawsuits, the trustee recommended accepting the settlement, because "ultimate success of the Trustee's claims against IBM is uncertain" and that pursuing the matter further would be expensive and that "the Settlement Agreement provides an immediate and substantial monetary recovery and creates important liquidity for the benefit of all creditors and claimants."] As part of this, the trustee would give up any future related claims against IBM.[ The matter lay with the U.S. Bankruptcy Court for the District of Delaware, which had been handling the case all along.]
On November 8, 2021, the settlement was so made under those terms, with IBM paying the TSG bankruptcy trustee $14.25 million and the trustee giving up all future claims and with each party paying their own legal costs. After 18½ years, ''SCO v. IBM'' was finally over.
As it happened, another suit against IBM was still now active, from Xinuos, which earlier in 2021 had reversed direction from their past disavowals of litigation interest and had filed suit against both IBM and Red Hat, re-alleging old SCO claims about IBM and Project Monterey and alleging new claims that IBM and Red Hat had cornered the operating system market for cloud computing. Unlike the SCO–Linux battles, however, in this case few people in the industry paid the Xinuos action much attention.[
In any case, the story of The SCO Group was complete.][
]
Products
* SCO UnixWare, a Unix operating system. UnixWare 2.x and below were direct descendants of Unix System V
Unix System V (pronounced: "System Five") is one of the first commercial versions of the Unix operating system. It was originally developed by AT&T and first released in 1983. Four major versions of System V were released, numbered 1, 2, 3, an ...
Release 4.2 and was originally developed by AT&T, Univel, Novell and later on The Santa Cruz Operation. UnixWare 7 was sold as a Unix OS combining UnixWare 2 and OpenServer 5 and was based on System V Release 5.
* SCO OpenServer, another Unix operating system, which was originally developed by The Santa Cruz Operation. SCO OpenServer 5 was a descendant of SCO UNIX, which is in turn a descendant of XENIX. OpenServer 6 is, in fact, an OpenServer compatibility environment running on a modern SVR5-based Unix kernel.
* Smallfoot, an operating system and GUI created specifically for point of sale
The point of sale (POS) or point of purchase (POP) is the time and place at which a retail transaction is completed. At the point of sale, the merchant calculates the amount owed by the customer, indicates that amount, may prepare an invoice f ...
applications.
* SCOBiz, a web-based e-commerce development and hosting site with web services-based integration to existing legacy applications.
* SCOx Web Services Substrate, a web services-based framework for modernizing legacy applications.
* WebFace, a development environment for rich-UI browser-based Internet applications.
* SCOoffice Server, an e-mail
Electronic mail (email or e-mail) is a method of exchanging messages ("mail") between people using electronic devices. Email was thus conceived as the electronic ( digital) version of, or counterpart to, mail, at a time when "mail" mean ...
and collaboration solution, based on a mixture of open-source and closed-source software.
* SCO Marketplace Initiative, an online exchange offering pay-per-project development opportunities.
* Me, Inc., a mobile services platform with services including Shout, HipCheck, and FCmobilelife.
List of SCO lawsuits
* ''SCO v. IBM
''SCO Group, Inc. v. International Business Machines Corp.'', commonly abbreviated as ''SCO v. IBM'', is a civil lawsuit in the United States District Court of Utah. The SCO Group asserted that there are legal uncertainties regarding the use o ...
'' (''The SCO Group, Inc. vs. International Business Machines, Inc.'', case number 2:03cv0294, United States District Court for the District of Utah
The United States District Court for the District of Utah (in case citations, D. Utah) is the federal district court whose jurisdiction is the state of Utah. The court is based in Salt Lake City with another courtroom leased in thstate courtho ...
)
* ''Red Hat v. SCO
''Red Hat v. SCO'' is a lawsuit filed by Red Hat against The SCO Group on August 4, 2003. Red Hat was asking for a permanent injunction against SCO's Linux campaign and a number of declaratory judgments that Red Hat has not violated SCO's copyr ...
''
* '' SCO v. Novell''
* '' SCO v. AutoZone''
* ''SCO v. DaimlerChrysler
''SCO Group v. DaimlerChrysler'' was a lawsuit filed in the United States, in the state of Michigan. In December 2003, SCO sent a number of letters to Unix licensees. In these letters, SCO demanded that the licensees certify certain things regar ...
''
See also
* SCO Forum
References
External links
* The SCO Group, Inc. (archived web site fro
2002-09-14
t
2004-09-01
and fro
2001-05-08
Groklaw: News and Commentary about SCO lawsuits and Other Related Legal Information
SCOX Bankruptcy information and documents
Financial information for The SCO Group (SCOXQ)
* ttps://www.encyclopedia.com/books/politics-and-business-magazines/sco-group-inc "The SCO Group Inc.", ''International Directory of Company Histories'', 2006, as hosted at Encyclopedia.com
{{DEFAULTSORT:Sco Group, Inc.
Caldera (company)
Defunct software companies of the United States
Defunct companies based in Utah
SCO–Linux disputes
Software companies established in 2002
2002 establishments in Utah
Software companies disestablished in 2011
2012 disestablishments in Utah
Companies that have filed for Chapter 7 bankruptcy
Companies that filed for Chapter 11 bankruptcy in 2007
pl:SCO