Close
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
Read Down
Sign in
Close
Welcome!Log into your account
Forgot your password?
Read Down
Password recovery
Recover your password
Close
Search
Logo
Logo
  • Latest News
  • Big Data and Analytics
  • Cloud
  • Networking
  • Cybersecurity
  • Applications
  • IT Management
  • Storage
  • Sponsored
  • Mobile
  • Small Business
  • Development
  • Database
  • Servers
  • Android
  • Apple
  • Innovation
  • Blogs
  • PC Hardware
  • Reviews
  • Search Engines
  • Virtualization
More
    Home Latest News
    • Networking

    SCO Litigation Takes Its Toll on Bottom Line

    By
    Peter Galli
    -
    August 9, 2004
    Share
    Facebook
    Twitter
    Linkedin

      The SCO Groups ongoing legal battle against IBM and others is having a negative impact on the company, leaving it with few new customers for its Unix software and current users reluctant to pay additional licensing fees.

      Both issues are taking a serious financial toll on the company, which saw its revenue for the second quarter drop by half and sales from its SCOsource division, which licenses its Unix intellectual property, nearly evaporate.

      When asked if its controversial moves had negatively affected the Lindon, Utah, companys ability to attract new clients, Jeff Hunsaker, senior vice president of SCOs Unix division, said, “Absolutely, unequivocally yes. Everybody says that President Bush has the hardest job. I think that I have the hardest job. This is a tough job.”

      /zimages/4/28571.gifClick here to read why Steven J. Vaughan-Nichols says the SCO-Linux wars are far from over.

      The decline in customer interest is evident in SCOs second-quarter financial results. The companys SCOsource divisions revenues plummeted in the second quarter to $11,000—a drop from the divisions revenues of $8.25 million for the same period last year.

      Overall revenue for the second quarter also fell, to $10.1 million, from $21.4 million in the same quarter last year. It is expected to be between $10 million and $12 million for the third quarter this year.

      To try to stem the tide, SCO is focusing on getting current customers to upgrade rather than bringing in new ones, said Hunsaker, who spoke with eWEEK at the SCO Forum event here last week. “Until we come to a complete resolution with our SCOsource [program for licensing intellectual property] initiatives, its going to be very difficult to get new customers,” he said. “They want to see this thing resolved.”

      Next Page: SCOs SMB challenge.

      Page 2

      But going after its installed base rather than trying to add new customers poses a challenge for SCO: Many of its customers are small and midsize businesses with more limited IT budgets, and many SMBs that have been using SCO technologies for a long time tend not to upgrade as often as large enterprises.

      One such customer is CSK Auto Inc., an auto parts retailer based in Phoenix. George Duckworth, director of store support for CSK, said the company has deployed SCO software for about 11 years in 1,125 locations in 19 Western states.

      “We have one server in each of our stores running SCO OpenServer and a 16-bit MegaBASIC application running in a Xenix emulator on that OpenServer box,” Duckworth said. “We are moving from OpenServer to UnixWare and hoped to have the first pilot for this installed this month.” He said those moves will take place over time. “We had to come up with a way of spreading the cost out over three years or so where we could actually get it done. The first part, what we are doing now, is starting to migrate to hardware that will support the applications we want to write, while upgrading from OpenServer to UnixWare,” he said.

      /zimages/4/28571.gifRead how the SCO Forum and LinuxWorld shows exposed turmoil in the Unix and Linux markets.

      Among SCOs large customers is Siemens AG, which uses SCO because it is flexible enough to support a number of PC architectures and peripheral devices, said Detlef Fischer, head of Siemens Power Generation, Instrumentation and Control Development division, in Berlin. Siemens uses SCO in all subsections of that division except automation, Fischer said.

      Hunsaker said SCO will fight to keep its current customers from being lured away by competitors such as Sun Microsystems Inc., Novell Inc., Hewlett-Packard Co. and Red Hat Inc. “We are not going to allow them to take our customers away. We will protect them to the end,” he said. “But for us to go head-to-head with them on a new customer—absolutely, thats a huge challenge.”

      /zimages/4/28571.gifCheck out eWEEK.coms Linux & Open Source Center at http://linux.eweek.com for the latest open-source news, reviews and analysis.

      /zimages/4/77042.gif

      Be sure to add our eWEEK.com Linux news feed to your RSS newsreader or My Yahoo page

      Peter Galli
      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 www.eweek.com.

      MOST POPULAR ARTICLES

      Big Data and Analytics

      Alteryx’s Suresh Vittal on the Democratization of...

      James Maguire - May 31, 2022 0
      I spoke with Suresh Vittal, Chief Product Officer at Alteryx, about the industry mega-shift toward making data analytics tools accessible to a company’s complete...
      Read more
      Cybersecurity

      Visa’s Michael Jabbara on Cybersecurity and Digital...

      James Maguire - May 17, 2022 0
      I spoke with Michael Jabbara, VP and Global Head of Fraud Services at Visa, about the cybersecurity technology used to ensure the safe transfer...
      Read more
      Applications

      Cisco’s Thimaya Subaiya on Customer Experience in...

      James Maguire - May 10, 2022 0
      I spoke with Thimaya Subaiya, SVP and GM of Global Customer Experience at Cisco, about the factors that create good customer experience – and...
      Read more
      Cloud

      IGEL CEO Jed Ayres on Edge and...

      James Maguire - June 14, 2022 0
      I spoke with Jed Ayres, CEO of IGEL, about the endpoint sector, and an open source OS for the cloud; we also spoke about...
      Read more
      Cloud

      Yotascale CEO Asim Razzaq on Controlling Multicloud...

      James Maguire - May 5, 2022 0
      Asim Razzaq, CEO of Yotascale, provides guidance on understanding—and containing—the complex cost structure of multicloud computing. Among the topics we covered:  As you survey the...
      Read more
      Logo

      eWeek has the latest technology news and analysis, buying guides, and product reviews for IT professionals and technology buyers. The site’s focus is on innovative solutions and covering in-depth technical content. eWeek stays on the cutting edge of technology news and IT trends through interviews and expert analysis. Gain insight from top innovators and thought leaders in the fields of IT, business, enterprise software, startups, and more.

      Facebook
      Linkedin
      RSS
      Twitter
      Youtube

      Advertisers

      Advertise with TechnologyAdvice on eWeek and our other IT-focused platforms.

      Advertise with Us

      Menu

      • About eWeek
      • Subscribe to our Newsletter
      • Latest News

      Our Brands

      • Privacy Policy
      • Terms
      • About
      • Contact
      • Advertise
      • Sitemap
      • California – Do Not Sell My Information

      Property of TechnologyAdvice.
      © 2022 TechnologyAdvice. All Rights Reserved

      Advertiser Disclosure: Some of the products that appear on this site are from companies from which TechnologyAdvice receives compensation. This compensation may impact how and where products appear on this site including, for example, the order in which they appear. TechnologyAdvice does not include all companies or all types of products available in the marketplace.

      ×