SCO Turns a Profit, Renews Threat Against IBM

By Peter Galli  |  Posted 2003-05-28 Print this article Print

After posting its first-ever profit for the quarter, ended April 30, SCO reinforced its threat to revoke IBM's legal license to sell AIX if the two can't reach an agreement.

The SCO Group on Wednesday again threatened to revoke IBMs legal license to sell AIX, its Unix operating system, on June 14 if Big Blue does not reach an agreement with SCO regarding its alleged intellectual violations of SCOs Unix code. In a media telephone conference to announce its second-quarter fiscal results, SCO CEO Darl McBride declined to say how the company would enforce this action against IBM. He also declined to say whether he thought a resolution was likely before that point, referring the matter to IBM for comment. SCO recently sued IBM for $1 billion and sent a letter to 1,500 global CEOs warning them that Linux was an unauthorized derivative of Unix and that by using Linux they could be legally liable for the resultant violations.
"As the owners of the Unix operating system, we are continuing to move down the path of protecting and asserting our rights as they relate to Unix. SCO has over 6,000 licensees who have signed up with us on the source-code level for Unix. We are on a journey and are still at the front end of that journey.
"As we continue to focus on this we will continue to be rewarded in the marketplace, starting with customers and moving onto shareholders," McBride said. That reward was evident in the fact that SCO on Wednesday also reported net income for the first time in the companys history, he said. In the second quarter of fiscal 2003, ended April 30, SCO reported net income of $4.5 million, or 33 cents a diluted share, on revenue of $21.4 million. That compares to a net loss of $6.6 million, or 47 cents a diluted share, on revenue of $15.5 million for the year-ago quarter. The company also reported a net loss of $724,000, or 6 cents a diluted share, on revenue of $13.5 million for the first fiscal quarter of 2003.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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