SCO to partners, customers: It's business as usual

CEO and president claims company will not be affected by recent legal setbacks over Unix copyrights

If The SCO Group's future looks grim, CEO and President Darl McBride apparently hasn't gotten the memo. In a letter to partners and customers filed with the U.S. Securities and Exchange Commission on Thursday, McBride said SCO is still committed to doing business as usual even after the company was dealt a crushing blow in its ongoing litigation over Unix copyrights.

A letter in an 8-K report attributed to McBride reassured customers that even though SCO is "disappointed" with Friday's ruling that Novell owns Unix copyrights -- rights that are at the heart of SCO's massive Linux lawsuit against IBM -- it won't affect SCO's ability to serve customers and develop new Unix products.

"This ruling has no impact on SCO's ability to continue to develop and support all versions of UnixWare and OpenServer as well as the recently announced OpenServer 6M and UnixWare 7M as well as our new mobility products," McBride said in the filing. "It has no impact on your ability to sell, service, support, and develop any of our Unix operating systems."

Some in the industry might beg to differ, what with SCO's stock trading at a mere $0.37 on Thursday after taking a deep dive on news of the ruling Friday. If its shares trade for less than $1 for 30 consecutive days, the company will face delisting. And with its billion-dollar lawsuit against IBM all but dead in the water, its credibility ruined and its market capitalization down 70 percent since Friday at $7.72 million, most would agree things are not looking good for the future of SCO as a competitive business.

Still, the technology industry can be strangely forgiving, and SCO wouldn't be the first company to rise from the ashes it appears to be in now. Perhaps knowing this, McBride maintained an optimistic tone in his letter. He said SCO will "continue to focus on driving the business forward," and plans to release its upcoming OpenServer MP3 and new mobile technologies as planned, according to the filing.

The filing also noted that SCO could still score a victory on some outstanding claims in its case with Novell that regard noncompete provisions of a 1995 Linux technology agreement. It's possible code licensed by Novell in products that were competitive to SCO after the license deal was struck, which means Novell would have violated a noncompete agreement the two companies had.

McBride's letter also reiterated a statement made on the company's Web site Friday after the ruling was handed down that the company is mulling a possible appeal once the trial phase of the Novell case has ended.

"Although the district judge ruled in Novell's favor on important issues, the case has not yet been fully vetted by the legal system, and we will continue to explore our options with respect to how we move forward from here," according to the filing.

Copyright © 2007 IDG Communications, Inc.

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