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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.
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McBride said on Wednesday that revenue in the period under review from its operating system platforms was $13.1 million, while revenue from its SCOsource licensing initiative was $8.3 million.
“During the quarter ended April 30, 2003, the first two licensing agreements related to our SCOsource initiative, our division for licensing and protecting the companys Unix intellectual property, provided the company with $8.8 million in cash and added $6.1 million to gross margin.
“There are over 6,000 source code licensees of our Unix operating system, and we believe the SCOsource initiative will continue to gain momentum as we pursue enforcement of the companys intellectual property rights,” McBride said.
One of those license agreements was signed with Microsoft Corp., while the other has not yet been disclosed.
Asked about whether SCO, which was an original member of the UnitedLinux consortium, intended to resume sales of its Linux distribution at some point, McBride said matters are “starting to polarize, and we seem to be getting further away from going down that path.”
SCO believes that its claims are strong and valid and said that many global customers want greater clarity about the legal situation before doing big Linux implementations. “We are not comfortable with how our intellectual property is being abused, and we now have even more problems with that.
“As we move forward we are probably getting further away from going back to Linux than moving closer,” he said.
McBride also welcomed the latest quarterly financial results, saying these had strengthened its balance sheet and financial position. “Our increased cash balance and working capital has positioned the company for its launch of SCOx, our Web services strategy, and will provide us with other opportunities to drive growth in future quarters.
“We expect that revenue for our third quarter, ending July 31, 2003, will be in the range of $19 million to $21 million. These projections anticipate revenue contributions of approximately two-thirds from our operating system platforms and one-third from our SCOsource initiative,” he said.
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