Enterprise Linux Log

Aug 15 2007   2:43PM GMT

SCO and Hasbro’s Mouse Trap

ITKE ITKE Profile: ITKE

SCO plays Sorry!Last Friday’s ruling by Federal District Court Judge Dale Kimball *appears* to have been that first step in setting about the end to one of the longer running dramas in the software industry: The now infamous SCO vs. Linux trial. Or, more accurately and specifically, the end of the legal cases initiated by SCO based on claims of UNIX ownership and Unixware copyrights.

Watching and reading all of the commentary from this week, and witnessing the almost meteoric unraveling of SCO’s stock price, I am reminded of a game from my childhood that puts the entire process in a much more understandable — and humorous — light. Mouse Trap. The past four years (this all began in 2003, can you believe it?) have been nothing but the setting up of a series of various trials and motions — much like Mouse Trap’s rickety stairs and bathtub bowling ball — that have built and built the tension year over year until finally that plastic man jumped and tripped the trap that fell onto the unsuspecting mouse. I mean onto SCO. I’m mixing things up here, forgive me.

Or maybe it was a suspecting mouse, depending on who you talk to. Court filings suggest SCO knew all along that its claims were, well, dead wrong. Hit that link to read more on that.

Analyst Charles King, founder of Hayward, Calif.-based Pund-IT Research, said in a research note released today that Judge Kimball’s ruling, which firmly supported Novell’s ownership of the UNIX and Unix-Ware copyrights, “quite simply eviscerated SCO’s hopes and dreams.” I’m inclined to agree. The trap is sprung, the cage is down, and the mouse is caught. Game over. There are no little pieces of cardboard cheese left with which to barter, plead or use as an attack. I think Pamela Jones has most of them now, but I’m sure that Novell and IBM have a few pieces too. SCO’s stock reflects this and has bottomed out at a few dimes or so in value per share.

King notes that SCO posted “a brave statement claiming that the court determined or did not dismiss a number of technical points in its favor.” Keeping with my mousy analysis, it was at this point in my reading that I imagined the mouse sliding a tin cup across the bars of his new cage, making a ruckus to distract observers from the fact that he was helplessly locked away. The fact that a mouse would know how to do that would be distracting enough to begin with, so we’re talking about being really distracted here.

And speaking of Groklaw’s Pamela Jones… she also dissected the SCO letter and her post positively drips with Schadenfreude. Can you blame her though? As I loosely followed this trial for the past three years I’ve observed SCO using almost as much elbow grease in fighting IBM and Novell as it did when it tried to discredit Jones and Groklaw.

Jones seems to think there might be one last breath in SCO’s legal/business team, but in the same breath she doesn’t sound too impressed with what they’ll come up with. King agreed:

SCO’s plans to “continue to explore our options” sounded as hollowly optimistic as a conventioneer in Las Vegas who, upon emerging from the casino where he has squandered his life savings, declares how lucky he is that the pit boss let him keep his Fruit of the Looms and Rotary pin.

Not only did Judge Kimball favor Novell concerning the copyright issues, he also granted the company the right to direct SCO to waive its claims against IBM and Sequent and stated that SCO is obligated to recognize that waiver. Kimball also found that SCO is obligated to pay Novell for license fees the company collected from Sun and Microsoft in 2003. As much as 95% of those fees, which total some $18.3 million, could be due to Novell. However, since SCO has only a fraction of that amount on hand, it remains to be seen how much Novell will ever collect.

And though SCO will still be with us for the time being, King said the case seems close enough to a resolution that it’s worth considering a few lessons learned:

  • First, when heading downhill, use the brake pedal instead of the gas. SCO’s situation illuminated a notable issue in the rise of Linux; that it has impacted UNIX solutions far more seriously than Microsoft, a bugaboo of Linux and Open Source aficionados. The result? Like other dinosaurs, UNIX specialists such as SCO were hammered worst by simple market evolution. By pursuing what turned out to be empty claims against Novell and IBM, the company merely hastened its demise.
  • Second, when you hope or plan to do business with people, don’t try to fool them. SCO’s aggressive pursuit of IBM (which enjoys notable good will in the Open Source community) and claims that Linux violated UNIC copyrights made the company’s attempts to position itself as an emerging Linux vendor a tough sell, at best. The Linux community enjoys many well-educated, highly skeptical members who do not take kindly to empty braggadocio. SCO’s stick and carrot marketing approach worked in a few specific instances but was destined to fail among a disparate, diffused, and informed community.
  • Finally, when heading toward a concrete wall, avoid high speed collisions at all costs. In essence, SCO chose to pursue a high stakes strategy which was finally unsubstantiated by facts. That suggests that the company was deliriously optimistic, deeply misinformed, or simply attempting to bluff its way into the winner’s circle. This approach can succeed sometimes, but not against companies such as IBM and Novell that possess the legal and financial resources to fight a battle to its ultimate conclusion.

Let’s review.

“Without the possibility of a legal pay day, how long will SCO be able to function as a commercial company? If it is headed for destruction, is a partnership or acquisition in SCO’s future, and if so, by who? How will SCO cope with owing potentially millions in licenses fees to Novell, and how far will Novell go in pursuing payment? Will Novell follow Judge Kimball’s lead and order SCO to waive its legal claims against IBM? Will the resolution of these legal cases have any tangible impact on Linux of the Open Source movement? As the SCO melodrama winds toward its sad if predictable dénouement, these are points we will be watching carefully,” King said. All good questions, and they’ll probably all have answers sooner rather than later.

On that note however, it sounds like we’re about ready to play a new game with SCO. Any ideas out there? Oh, I know what we could play. How about Sorry!?

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