Interview: SCO CEO Darl McBride

An interview with SCO CEO Darl McBride
SCO CEO Darl McBride met Monday with CRN Senior Editor Paula Rooney to talk about the company's Unix crusade and product plans. The interview took place at the SCO Forum 2003 in Las Vegas. CRN is a sponsor of the conference.

CRN: SCO attorneys say if there is no settlement [to its case against IBM], a trial would begin in April 2005 and last roughly five weeks. Following that, there could be appeals. Is there any chance SCO can expedite this case to free up customers, partners and vendors so that the Linux industry doesn't get hurt?

McBride: We tried to move this along, but IBM kept asking for delays. Now with the counterclaim and patent infringement, it could go even longer. IBM can put this on a slow track [with additional legal moves]. But IBM might be throwing hard balls to [get ready] for the soft pitch [to settle].

CRN: Why do you say that? What's happening behind the scenes? Might this case be resolved quietly, rather than become the intellectual property case of the century?

McBride: They're putting this on a [slow, legal] path. But customers have been putting pressure on IBM to get this resolved. This is not a case IBM can get knocked out on--they'd be filing motions to dismiss the case [if they thought they could win]. Our case is up to $3 billion--they'd have to come up from a few hundred million dollars to settle. Every month we keep finding more and more [Linux code that violates our Unix System contract]. We'd want a settlement and royalty [on Linux] going forward.

CRN: Have you met with Linus Torvalds yet, especially since he has become an OSDL fellow? What is your assessment of the open-source community's activities?

McBride: I've talked to him via e-mail. He's very pragmatic and tends to be a racehorse with blinders on. ... He doesn't want to know about IP or [commercial issues]. He readily admits that IBM has put a lot of code in Linux and says if you want to pursue it [legally], go ahead. But I said to him, 'I appreciate you didn't create the problem, but you have inherited it.' But he won't sign an NDA. There's a lot of discussion going on at the OSDL, IBM and they open-source community they're working though.

CRN: Many in the open-source community are upset about the impact of this case on the Linux industry. Open source guru Eric Raymond--among many others--say they are respectful about IP issues but they are challenging SCO to specify exactly which code it believes to be infringing, by file and by line number, and on what ground it is infringing.

Raymond says the open-source community is not willing to sit idly by while SCO asserts proprietary control, and the right to collect license fees, over the entirety of Linux. What do you say to that? Why doesn't SCO just leave Linux customers, partners and developers alone and out of its dispute with IBM?

McBride: That's like if someone comes into your house while you're sleeping, takes your jewels, and as you start chasing them down [to retrieve your property], and now they want to say you're the one doing the bad thing. I have to read [Eric Raymond's letter] and am meeting with [The Linux Show's] Jeff Gerhardt on it later.

CRN: SCO shares, as you mentioned during your keynote, have soared from less than a $1 to over $10 since you took the reins and since the case began. There have been some reports of SCO executives recently trading shares. This casts some doubt in the minds of some about the integrity of SCO's allegations against IBM.

McBride: I personally haven't sold any shares [laughter]. Look, Red Hat executives have sold over 500,000 shares just since January. [Other SCO execs] sold shares to offset tax losses but does not know more than that.

CRN: Some respected industry observers--including Massachusetts Institute of Technology's (MIT's) Sloan School of Management professor, consultant and author Michael Cusumano--say SCO and the former Caldera are basically holding companies for filing lawsuits and that's about it.

McBride: The Canopy Group [of Utah] is an investment company. Those are just ignorant statements about SCO's business. Hundreds of customers like and use SCO's Unix products.

CRN: IBM has told its business partners to relax and not worry about distributing AIX, even though SCO terminated its license. The OSDL last week issued a statement from one open-source attorney telling customers and partners not to worry about licensing anything until the case is settled in court. What would you say to partners?

McBride: It's a dangerous strategy for customers or channel partners to sweep IP under the rug. It's odd for IBM to play Jeckyl & Hyde when it comes to a company's intellectual property rights.

CRN: CRN noticed that SCO recently changed its number of resellers from 16,000 to 11,000. Can you explain?

McBride: We cleaned up the list. We had 16,000 names in our database, but about 5,000 names were marketing fluff that we sent materials to. This is the real number.

CRN: What's your plan for solution providers for the next year?

McBride: We're building out business for solution providers and will be pushing them to sell SCO solutions in hosted mode.

This article appears courtesy of CRN, the newspaper for builders of technology solutions.

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