SCO CEO promises survival

McBride says a cap on legal expenses and a profitable Unix business mean SCO is poised for sustainability

The SCO Group will still have a viable business even if it loses its courtroom battles, according to the vendor's CEO.

Darl McBride, CEO and president of SCO, said that the company's Unix business is profitable and that SCO is due to shed its heavy financial burden from legal fees by January.

"When we started this and people asked me that question ['What happens if you don't win in court?'], I said, 'As a company, we're screwed,' " McBride said. "Today, I don't believe that to be the case. We've got a cap on our legal expenses, and our Unix business is profitable. If you put that together, you've got long-term sustainability."

By January, SCO will have spent close to $40 million in legal fees, McBride said. But after the company makes its January payment, SCO will have paid in full for legal services "in perpetuity," he added.

In August 2004, SCO worked out a deal with its lawyers to cap the company's legal costs at $31 million. SCO has lawsuits in place against AutoZone, DaimlerChrysler, IBM, and Novell.

In the slander-of-title lawsuit it filed against Novell in January 2004, SCO argues that it owns the rights to the Unix and UnixWare copyrights and is seeking damages from what it claims are Novell's false representations about owning the source code.

SCO's claim on the Unix source code forms the basis of the company's assertion that Linux contains SCO intellectual property, which SCO has been pursuing in court, filing suit against IBM.

Despite McBride's optimism, however, the company faces a stiff challenge getting customers to hear its message, according to Dan Kusnetzky, vice president of system software research at IDC.

In his discussions with customers, Kusnetzky said, SCO is almost never mentioned -- a different situation from two years back, when users were still name-checking the company. "The overall impression is that in spite of their efforts, SCO is slipping off the radar screen," he said.

As SCO moves forward, the company will concentrate on Project Fusion, which is based on the new 64-bit Unix SVR6 (System V Release 6) kernel.

Copyright © 2005 IDG Communications, Inc.