Friday, February 15, 2008


2/15 SNR: $100M?! WTF?!

If you've been waiting in vain for new SNR posts since December, there's a very simple reason why there haven't been any: I'd rather lost interest in SCO, and it seemed like the only bit of suspense remaining was whether the company would completely evaporate before the Novell trial date in April. There was a bit of recent news about major layoffs at the company, and I considered posting about that, but it felt like gloating over ex-employees' misfortune and I couldn't bring myself to do it.

And then yesterday we learned that some insane private equity firm and its unnamed friends want to dump "up to" $100M into SCO, and they babble on about the bright future ahead for the company. Proving once again there really is one born every minute.

So if the plan goes through, it's a whole new ballgame... to use a cheesy sports metaphor in "honor" of Darl, who apparently will get the boot under the new reorg plan. That would be one silver lining to yesterday's news, I suppose. And SCO may actually have the cash to pay back Novell after the trial. They may even survive long enough to lose the IBM case too, so that we'd finally get a definitive, favorable resolution of SCO's crazy Linux accusations. So that would obviously be a good thing as well.

Overall, though, I really just want to know what Stephen Norris and friends have been smoking. To look at SCO in 2008 and see a huge upside potential is simply bizarre. UnixWare and OpenServer have insignificant and rapidly declining marketshare, and the installed base for both continues to evaporate. And Me Inc. has been kicking around for several years now without gaining any traction whatsoever. SCO's wares aren't just niche products -- they're fringe products. It's been years since anyone's taken them seriously as a tech company, and nothing in the reorg plan suggests they have any clue how to change that, if they even intend to. In recent months they've gotten rid of quite a few employees on the technical side, some of them holdovers from the AT&T days. So if the plan is to make money by selling products, like a normal company would, they're in worse shape than ever, no matter how much cash they have in the bank.

On the legal side, all the money in the world can't make a false accusation true, and that's all SCO's got. Considering who they're up against in the courtroom, even $100M (or "up to" $100M, technically) shouldn't be enough to scare any of the falsely accused parties into settling. I expect that somewhere in the not too distant future, SNCP and friends will be completely bewildered over why they ever invested in this silly worthless company. Meanwhile Darl gets his golden parachute, and SCO becomes somebody else's problem. It just might be the only good business deal he's ever made, and then only for himself.

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