December 22, 2003

SCO shows financials but avoids reporters

Author: Joe Barr

What a way to start Christmas Week -- with a puppet show! The SCO Group held a one-hour teleconference this morning to discuss its financial results for the quarter and for the year. The Lindon, Utah-based company hosted the obligatory Q&A session following discussion of the financials, but as has been the case in previous press/analyst conferences, it appeared that callers were carefully screened to ensure only SCO-friendly analysts were allowed questions.

Once again, SCO, pulling the strings from above, exhibited obvious defensiveness in front of its shareholders. Put the conference anywhere else, with an open mike in the audience and an objective emcee, and true service to shareholders -- and the public -- happens.

SCO CFO Bob Bench took the stage first and talked in glowing terms about the financial results (a 57 percent increase in earnings over last year's Q4, thanks solely to 2003 licensing agreements with Microsoft and Sun). He also projected there will be three revenue streams in 2004 for SCO: Unix product and services, SCOsource licensing, and other IP licensing. During the first quarter of 2004, however, Bench expects nearly all revenue to be from the Unix operation. Translation: Licenses are still not selling. Hmmm. Wonder why?

President and CEO Darl McBride read a list of existing SCO Unix customers around the globe. Translation: We have no new customers to tell you about. Hmmm. Wonder why?

McBride also said that SCO would have a 64-bit version of their Unix product out next year. He noted that they were "satisfied" with the progress of their suit against IBM. Hmmm. Wonder why?

During the Q&A session, McBride noted that the newly announced DMCA attack is completely separate from the action against IBM. Linux Weekly News posted a copy of the document on its Web site today. SCO claims it has proof of 43 offending code files, and they are listed in the letter.

As a result of this, McBride spelled out the three options he sees that large Linux users will have available to them after receiving the DMCA letter:

1. Stop using Linux
2. Buy a license from SCO
3. Get sued

McBride certainly wouldn't be in character unless he made a few gratuitous and completely uninformed comments about the GPL and Linux, and he certainly didn't disappoint the audience. However, the lack of warranty in the GPL is old hat by now, and surely one of these days he is going to read a license for a proprietary software product and realize how inane his remarks are.

His best zinger, I think, was this one about Linux as it relates to the SCO suit against IBM:

"Linux is the ultimate dumping case. The price is zero, you can't destroy a market any more than that."

An analyst from Deutche Bank and a number of other analysts from SCO-friendly investment firms who were allowed on the call offered McBride congratulations on the year as a preface to their questions. It's a shame that other journalists and I were shunned from the list, because I wanted to congratulate him, too. His was a performance that any song-and-dance man could have been proud of, with nary a mention of being told to "put up or shut up" by the judge in the IBM case.

NewForge staff editor Chris Preimesberger contributed to this report.


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