SCO Source income: $32,000. Legal bills: $3 million

SCO has seen a sharp decline in income, as enterprises fail to be tempted by its Linux indemnification program.

The litigious Unix vendor announced this week that revenues for its most recent quarter, which ended July 30, were $9.35 million compared to $11.2 million (5.09 million and 6.10 million pounds, respectively) for the same period in 2004. SCO posted a loss of $2.4 million over the three-month period, compared to a profit of $7.5 million for the same period the year before.

This decline was caused by a drop in income from SCO's Unix products and by legal bills of $3 million. This stemmed from SCO's ongoing court cases against IBM and Novell, among others, over its claim that its intellectual property was unlawfully included in Linux.

Under a much-lambasted licensing program, SCO has been offering a license to companies that use Linux, saying that it will protect them from action by its legal department. But very few companies have acquiesced to what many see as a groundless threat. The program, called SCO Source, brought in revenues of just $32,000 during the quarter, compared to SCO's overall legal costs of $3.1 million.

These figures mirror a similar poor performance in the second quarter of this year, in which revenues dropped to $9.3 million--down from $10.5 million for the same period in 2004.

Analysts at Ovum were scathing about SCO's performance.

"SCO is failing," said Ovum analyst Gary Barnett, who was unimpressed by the performance of SCO Source. "The company's UNIX revenues continue to decline, as the 'continued competitive pressures' cited in the company's earnings release continue a trend that's been running for several years now."

Ovum advises companies not to buy a SCO Source license unless SCO provides a money-back guarantee in the event the company is defeated in the courts.

SCO chief executive Darl McBride tried to put a positive spin on the situation, claiming that the third quarter was "a productive quarter for SCO."

"Our UNIX business operated profitably for the third consecutive quarter and we launched SCO OpenServer 6 which has received many favorable reviews and is showing traction with customers," claimed McBride in a statement.

Ovum, though, offered a more pragmatic overview.

"If you're considering buying OpenServer you need to look at your options. If you need more licenses to support an existing deployment, there is no need to panic--Open Server may change hands in the next couple of years but it won't disappear. Over the longer term you should consider alternatives from both the open-source community (Linux) or from other Unix vendors (notably OpenSolaris on x86)," the analyst group said.

Graeme Wearden of ZDNet UK reported from London.

[System Tyrant]

Why???

Why should anybody believe what SCO is selling? So far all I've have seen or heard is a bunch of talk from them. They keep claiming foul, but have provided little or no evidence.

As far as SCO Source licences go, why anybody who pay SCO a dime is beyond me. I would tell them prove your case and then I will anty up. It sound like little more than an attemp to be profitable through lawsuits or at worst an extortion attempt.

Well, I suppose a couple more years and SCO will be out of business and maybe Novell or IBM will buy up all of SCO's Unix IP and provide it to the open source community (if it's possible). Or, and I hope not, Microsoft will buy it up and create a better Windows. Unfortunatly, if they buy it they will probably continue the lawsuit if they believe it has merit. And Microsoft could continue it out for a long time.

[Earl Benser]

It's about time...

... that some one took SCO out into the back 40, like an old sway
backed, wind broke horse, and put it out of its misery.

[John Kuzak]

put it out of its misery

http://www.analogstereo.com/honda_civic_owners_manual.htm

[aabcdefghij987654321]

SCO's gameplan: A direct path to failure.

These results show the gameplan is working.

If SCO wanted to compete they'd have put teams to work on taking Unix to the next level leaving the Linux and other vendors looking at how to catch up.

Suing a few of their users and threatening to sue hundreds (if not thousands) of companies using Linux was the worst possible idea they could have come up with. It shows how poor their management is that such a bad idea was actually implemented instead of the idiot who proposed it getting the deserved pink slip.

[M C]

"Money-back guarantee"? Hee, hee...

...If SCO's legal strategy fails, they'll file for bankruptcy the same day. A guarantee won't be worth the paper it's written on.

SCO's ONLY survival strategy is for the lawsuits to win. There is no backup, and they don't even care about a legitimate business model. If that's not clear to everyone by now, it should be.

[Mister C]

The Plan?

The plan was to inflate the stock price, cash in and bail. It failed, now they are will just bleed out.

[Mister C]

Help?

Maybe the boys at M$ will come through with another infusion of cash. ;)