The SCO Group (often referred to SCO and later called The TSG Group) was an American software company in existence from 2002 to 2012. It became known for owning Unix operating system assets that had belonged to the Santa Cruz Operation (the original SCO), including the UnixWare and OpenServer technologies. Under CEO Darl McBride, it pursued a series of high-profile legal battles known as the SCO–Linux controversies.
The SCO Group began in 2002 with a renaming of Caldera International, accompanied by McBride becoming CEO and a major change in business strategy and direction. The SCO brand was re-emphasized, and new releases of UnixWare and OpenServer came out. The company also attempted some initiatives in the e-commerce space with the SCOBiz and SCOx programs. In 2003, the SCO Group claimed that the increasingly popular free Linux operating system contained substantial amounts of Unix code that IBM had improperly put there. The SCOsource division was created to monetize the company's intellectual property by selling Unix license rights to use Linux. The SCO v. IBM lawsuit was filed, asking for billion-dollar damages and setting off one of the top technology battles in the history of the industry. By a year later, four additional lawsuits had been filed involving the company.
Reaction to SCO's actions from the free and open-source software community was intensely negative, and the general IT industry was not enamored of the actions either. SCO soon became, as Businessweek headlined, "The Most Hated Company in Tech". SCO Group stock rose rapidly during 2003, but then SCOsource revenue became erratic and the stock began a long fall. Despite the industry's attention to the lawsuits, SCO continued to maintain a product focus as well, putting out a major new release of OpenServer that incorporated the UnixWare kernel inside it. SCO also made a major push in the burgeoning smartphones space, launching the Me Inc. platform for mobility services. But despite these actions, the company steadily lost money and shrank in size.
In 2007, SCO suffered a major adverse ruling in the SCO v. Novell case that rejected SCO's claim of ownership of Unix-related copyrights and undermined much of the rest of its legal position. The company filed for Chapter 11 bankruptcy protection soon after and attempted to continue operations. Its mobility and Unix software assets were sold off in 2011, to McBride and UnXis respectively. Renamed to The TSG Group, the company converted to Chapter 7 bankruptcy in 2012. A portion of the SCO v. IBM case continued on until 2021, when a settlement was reached for a tiny fraction of what the SCO Group had initially sued for.
Initial history
Background
The Santa Cruz Operation had been an American software company, founded in 1979 in Santa Cruz, California, that found success during the 1980s and 1990s selling Unix-based operating system products for Intel x86-based server systems. SCO built a large community of value-added resellers that eventually became 15,000 strong and many of its sales of its SCO OpenServer product to small and medium-sized businesses went through those resellers. In 1995, SCO bought the System V Release 4 and UnixWare business from Novell (which had two years earlier acquired the AT&T-offshoot Unix System Laboratories) to improve its technology base. But beginning in the late 1990s, SCO faced increasingly severe competitive pressure, on one side from Microsoft's Windows NT and its successors and on the other side from the free and open source Linux.[1] In 2001, the Santa Cruz Operation sold its rights to Unix and its SCO OpenServer and UnixWare products to Caldera International.
Caldera, based in Orem, Utah,[2]
In the courts
A focus on intellectual property
As soon as McBride became the head of Caldera International, he became interested in what intellectual property the company possessed. He had been a manager at Novell in 1993 when Novell had bought Unix System Laboratories, and all of its Unix assets, including copyrights, trademarks, and licensing contracts, for $335 million.[25] Novell had subsequently sold its Unix business to the Santa Cruz Operation, which had then sold it to Caldera. So in 2002, McBride said he had thought: "In theory, there should be some value to that property – somewhere between a million and a billion [dollars], right? I just wanted to know what real, tangible intellectual property value the company held."[26] Shortly before the name change to SCO, Caldera went through its existing license agreements, found some that were not being collected upon, and came to arrangements with those licensees representing some $600,000 in annual revenue.[26]
In particular, from the start of his time as CEO, McBride had considered the possibility of claiming ownership of some of the code within Linux. Outgoing Caldera CEO Ransom Love had told him: "Don't do it. You don't want to take on the entire Linux community."
Life in bankruptcy
An adverse ruling
On August 10, 2007, SCO suffered a major adverse ruling in the SCO v. Novell case that rejected SCO's claim of ownership of Unix-related copyrights and undermined much of the rest of its overall legal position. Judge Dale A. Kimball of the United States District Court for the District of Utah issued a 102-page summary judgment which found that Novell, not the SCO Group, was the owner of the Unix copyrights; that Novell could force SCO to drop its copyrights-based claims against IBM; and most immediately from a financial perspective, that SCO owed Novell 95 percent of the revenues generated by the licensing of Unix to companies such as Microsoft and Sun.[141] The only SCO claims left intact by Kimball's judgment were ones against IBM related to contractual provisions from Project Monterey.[142] As the Utah Valley-based Daily Herald newspaper subsequently wrote, Kimball's ruling was "a massive legal setback" for SCO.
An appeal was filed. Meanwhile, the company had few options left,[141] as it had not been doing well anyway – by mid-2007, SCO Group stock had fallen to around $1.56 in value
Aftermath
The TSG Group
The TSG Group did not have employees per se; any at the Utah site not hired by UnXis were let go. The jury trial verdict was appealed, but in August 2011 the U.S. 10th Circuit Court of Appeals upheld the verdict and the judge's orders following it,[177] thus bringing to a final end SCO v. Novell.
However, in November 2011 the bankruptcy trustee decided to go on with the surviving contractual claims against IBM, saying that "the Novell ruling does not impact the viability of the estate's claims against IBM."[178] The SCO v. IBM case had previously been closed pending the result of the SCO v. Novell case.[174]
Nonetheless, there was no actual business being conducted by the TSG Group, and in August 2012 they filed to convert their status from Chapter 11 reorganization to Chapter 7 liquidation,[179]
Products
- SCO UnixWare, a Unix operating system. UnixWare 2.x and below were direct descendants of Unix System V Release 4.2 and was originally developed by AT&T, Univel, Novell and later on The Santa Cruz Operation. UnixWare 7 was sold as a Unix OS combining UnixWare 2 and OpenServer 5 and was based on System V Release 5.
- SCO OpenServer, another Unix operating system, which was originally developed by The Santa Cruz Operation. SCO OpenServer 5 was a descendant of SCO UNIX, which is in turn a descendant of XENIX. OpenServer 6 is, in fact, an OpenServer compatibility environment running on a modern SVR5-based Unix kernel.
- Smallfoot, an operating system and GUI created specifically for point of sale applications.
- SCOBiz, a web-based e-commerce development and hosting site with web services-based integration to existing legacy applications.
- SCOx Web Services Substrate, a web services-based framework for modernizing legacy applications.
- WebFace, a development environment for rich-UI browser-based Internet applications.
- SCOoffice Server, an e-mail and collaboration solution, based on a mixture of open-source and closed-source software.
- SCO Marketplace Initiative, an online exchange offering pay-per-project development opportunities.
List of SCO lawsuits
- SCO v. IBM (The SCO Group, Inc. vs. International Business Machines, Inc., case number 2:03cv0294, United States District Court for the District of Utah)
- Red Hat v. SCO
- SCO v. Novell
- SCO v. AutoZone
- SCO v. DaimlerChrysler
External links
- The SCO Group, Inc. (archived web site caldera.com from 2002-09-14 to 2004-09-01 and sco.com from 2001-05-08)
- SCOX Bankruptcy information and documents
- Financial information for The SCO Group (SCOXQ)
- Yahoo! — The SCO Group, Inc. company profile, archive reference
- "The SCO Group Inc.", International Directory of Company Histories, 2006, as hosted at Encyclopedia.com
References
- SCO UnixWare Operating System University of Michigan, retrieved 2020-06-03^
- SCO Group Inc. Contracts: Office Sublease ... January 10, 2002 Onecle, retrieved November 2, 2019^
- Ransom Love: Back to the Linux future ZDNet, November 21, 2003