03-04-2004, 01:01 PM | #1 (permalink) |
Human
Administrator
Location: Chicago
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MS-SCO?? See for yourself.
This is getting verrrrrry interesting....
http://slashdot.org/articles/04/03/04/1347234.shtml http://www.opensource.org/halloween/halloween10.html A new leaked memo shows that Microsoft is, so far, footing the bill for $86-$106 MILLION of SCO's legal battles. Below, I am quoting the memo as it is on Eric S. Raymond's Open Source site. Noteworthy parts are in red and explanatory comments by ESR are in green. If you see something that is normal color in the middle of green text, it's a link So, here you go...... <hr> Excuse me, did we say in <a href="http://www.opensource.org/halloween/halloween9.php">Halloween IX</a> that Microsoft's under-the-table payoff to SCO for attacking Linux was just eleven million dollars? Turns out we were off by an order of magnitude — it was much, much more than that. The document below was emailed to me by an anonymous whistleblower inside SCO. He tells me the typos and syntax bobbles were in the original. I cannot certify its authenticity, but I presume that IBM's, Red Hat's, Novell's, AutoZone's, and Daimler-Chryler's lawyers can subpoena the original. Explanatory comments are interspersed in green serif font.. Particularly noteworthy bits of the original are in red. <hr> --- From the mailbox of chris sontag From: Mike Anderer Sent: Sunday, October 12, 2003 To: csontag@sco.com CC: Bob Bench Subject: Conversation Friday <a href="http://thescogroup.com/company/execs/csontag.html">Chris Sontag</a>, the recipient of this mail, is Vice-President and general manager of the SCOsource, responsible for (as his company page puts it) "overseeing the development and licensing of SCO's immense intellectual property holdings." Chris: I know you were going totalk to Bob later Friday, but I figured I would outline the issues. <a href="http://thescogroup.com/company/execs/rbench.html">Bob Bench</a> is is the Chief Financial Officer of the SCO group. He is in the Cc line. Mike Anderer is a consultant with an outfit called <a href="http://www.sec.gov/Archives/edgar/data/1102542/000104746904002142/a2127332zex-10_15.htm">S2</a> that bills itself as a "Strategic Consulting" firm, in their M&A group. His name is in <a href="http://eol.finsys.com/edgar_conv_html/2004/01/28/0001047469-04-002142.html#A2127332ZEX-10_15_HTM_TOC_FA1112_1">SCO's SEC filings.</a> S2 held <a href="http://contracts.onecle.com/sco/s2.warrant.2003.07.01.shtml">warrants</a> on SCO stock in July 2003. They were thus in a position to profit if they had reason to anticipate a spike in this othwerwise unpromising stock (SCO/Caldera had never been profitable). 1) Baystar is easy as they were just a Microsoft referral and would be 2% Baystar Capital is a venture-capital firm. In 2003 SCO got about fifty million dollars from them in a <a href="http://www.groklaw.net/article.php?story=20031016164004379">deal</a> that was rumored to have Microsoft's hand behind it. This confirms the rumor. That is particularly interesting in view of the <a href="http://biz.yahoo.com/e/031209/scox8-k.html">agreement</a> that gives holders of 33.4% of the Baystar Series A stock the right to approve or or veto actions leading to contingency payments to Boies and the other two law firms. One suspects that digging into the identities of Series A shareholders — and their ties to Microsoft — might yield interesting results. 2) Any licensing deal would be at 5% 3) Much of the other work would go from 2% to 3% as I have engaged in direct, but this would require according to Bob either Darl or you signing off on the fact that this ane was not a referral. Mike Anderer is discussing his fee for brokering the deal. 4) On the patent side for IPX, where foes that fit it. I am working with the lawyers to get these moved from provisional to more complete in the next week. I think it will spawn at least 3 patents. Ed and I are the inventors on these. What do we do here <a href="http://docsrv.sco.com:507/en/NetAdminG/ipxN.ipx.html">IPX</a> is a network stack developed by Novell. The implication is that Mike Anderer thinks SCO might be able to get a patent lock on it, so they were looking for IP leverage against Novell. Provisional patent applications "die" in one year from filing date, so these are applications filed no earlier than Oct 2002 and converted to real applications no earlier than Oct 2003 (because they aren't done as of the date on the memo). Average pendency for software patents is 2-3 years. The patents thus will most likely not be issued until 2006 (if ever). The applications are generally published 18 months after filing, though. (They must be published unless they intend to file them only in the USA.) So, one might expect to see the applications published in Apr/May 2005. If the patents in question ever go live, they should be findable with <a href="http://patft.uspto.gov/netacgi/nph-Parser?Sect1=PTO2&Sect2=HITOFF&p=1&u=%2Fnetahtml%2Fsearch-adv.htm&r=0&f=S&l=50&d=ptxt&Query=IN%2F%22Anderer%3B+Mike%22+AND+IS%2FUT">this search</a> once they go live. Right now this search reveals three patents with Anderer's name, and that "Ed" is probably Ed Iacobucci. 5) The RedHat, Acrylis examiniation, there is no upside here is this billable seperatly. I bought a PC and loaded up RedHat and will take that over and work through it with the Lawfirm. What do we do here? Acrylis is a company that Caldera (which became SCO) <a href="http://zdnet.com.com/2100-11_2-527834.html">partnered with in 2001</a>; they were later acquired by Caldera. On page 53 of <a href="http://www.sec.gov/Archives/edgar/data/1102542/000091205702001965/a2068129z10-k.txt">SCO's 2002 10-K</a> it says: On May 3, 2001, the Company acquired the WhatIfLinux technology from Acrylis, Inc. WhatIfLinux technology provides Open Source users and system administrators with Internet-delivered tools and services for faster, more reliable software management. In consideration for the assets acquired from Acrylis, the Company issued 1.25 million shares of common stock with a market price of $1.95 per share, or approximately $2.4 million, paid $1.0 million in cash and incurred approximately $0.1 million in direct expenses. The Company has accounted for the acquisition of the WhatIfLinux technology using the purchase method of accounting. The allocation of the consideration paid for the WhatIfLinux technology consisted of assigning approximately $3.0 million to purchased technology and $0.5 million to goodwill. The acquired technology is being amortized over a three-year life. The ongoing lawsuit between Red Hat and SCO is documented <a href="http://sco.tuxrocks.com/?Case=RH">here</a>. I realize the last negotiations are not as much fun, but Microsoft will have brough in $86 million for us including Baystar. The next deal we should be able to get from $16-20, but it will be brutal as it is for go to makerket work and some licences. I know we can do this , if everyone stays on board and still wants to do a deal. I just want to get this deal and move away from corp dev and out into the marketing and field dollars....In this market we can get $3-5 million in incremental deals and not have to go through the gauntlet which will get tougher next week with the SR VP's. This is the smoking gun. We now know that Microsoft raised at least $86 million for SCO, but according to the SCO conference call this morning (03 Mar 2004) their cash reserves were $68.5 million. If not for Microsoft, SCO would be at least $15 million in debt today. The "$16 to $20" is almost certainly $16 to $20 million, and since this memo is five months old that deal is almost certainly completed by now. This means it's possible SCO has burned through as much as $30 million in just a year of barratry. The part that starts I just want is interesting, too. It looks as though Anderer is talking about shopping for a wealthier patron group within Microsoft's corporate hierarchy; SCO has been taking money from Microsoft corp dev (probably corporate development) but the gauntlet of Microsoft's senior vice-presidents is about to make that more difficult. He thinks they can get more money from marketing and field dollars, whatever that is (later paragraphs suggest it's co-marketing money from a different group within Microsoft). We should line up some small acquisitions here to jump start this if we do it. We shoudl also do this ASAP. Microsoft also indicated there was a lot more money out there and they would clearly rather use Baystar "like" entities to help us get signifigantly more money if we want to grow further or do acquisitions. In other words, Microsoft wanted to funnel its anti-Linux payoff through third parties. Maybe in case the antitrust guys at the Department of Justice happen not to be asleep at the switch? The bit about acquisitions seems more ominous when you remember that Caldera/SCO has a long history of lawsuits over obsolete technologies stripped out of dead companies — starting with DR-DOS from Digital Research and continuing through USL's System V into the present with the IBM lawsuit. This Microsoft deal is the Ante to the poker game...We should get this done and go after several $2-3 Million deals from the expense side of their company. So their revenue plan for the future is to hit Microsoft up for money, then hit them up for more money. The will help us a lot and if we execute we could exit and Unix componients we have build potentially back to Microsoft or MCS. MCS probably equals Microsoft Consulting Services here. I think they are on track and may not be able to push much more this round, but there are other ways to get money from them, their partners, investment bank referrals, etc.. Do keep in mind that they have brought us between $82 million and $86 million if this deal is between $4million per quarter where Rich is at, or it turns into $5 million wjich is the lowest number Chris had interest in. Rich, in context, must be whoever at Microsoft Corporate Development was responsible for haggling with Chris (Sontag) over the magnitude of SCO's payoffs. He is probably <a href="http://www.microsoft.com/presspass/press/2000/Nov00/EmersonPR.asp">Rich Emerson</a>, Microsoft's Senior Vice President of Corporate Development and Strategy. The third-person reference to Chris might seem odd considering that the memo is addressed to him, but people sometimes do that in email when it has more than one recipient. The "Ante to the poker game" is the $16-$20 million deal that was current at the time the memo was written. The $82-86 million had already been delivered. Together, they're counting on between $98,000,000 and $106,000,000 from Microsoft's corporate development division alone... There will be more, loans, partnerships, etc..but we need to just get this one done. It is too high profile, it is also critical, but they are not the people to pitch. We should get what we can from them and then work the other and larger areas of the company and groups where they have real budget and need for our help. ...and $100 million is before they hit up the rest of Microsoft. Let me know your thoughts. -Mike
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03-04-2004, 01:10 PM | #2 (permalink) | |
Human
Administrator
Location: Chicago
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Big news day...I just checked Slashdot and there was a new article....
http://slashdot.org/articles/04/03/04/2055227.shtml Quote:
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Le temps détruit tout "Musicians are the carriers and communicators of spirit in the most immediate sense." - Kurt Elling |
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03-06-2004, 10:14 PM | #6 (permalink) |
Sultana ruined my evil persona
Location: Los Angeles
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I've read somewere that they do not have a linux lincense from CA but a Unix lincense. Wish I had that link.
SCO is comming up with an inflated list of companies that so-called "bought" linux licenses just to get others to fall in. I also wonder what the feds will do if anything when they hear about MS being in bed with SCO over this. This memo just confirms what we've all been thinking since this started.
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His pants are tight...but his morals are loose!! |
03-06-2004, 11:17 PM | #7 (permalink) |
Not so great lurker
Location: NY
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Krycheck, here is the link that you are looking for about CA having a license for SCO Unix, from a previous lawsuit I should add. http://www.groklaw.net/article.php?s...40304231541412
remeber http://www.groklaw.net is the site you need to read to keep up with all of this stuff before it hits slashdot |
03-08-2004, 06:21 PM | #8 (permalink) |
Sultana ruined my evil persona
Location: Los Angeles
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Thanks hayal256, I had just found it on another site but I knew I wasn't crazy
I guess it's not a good idea to buy a licence from SCO if you know what's really good for you: http://thewhir.com/marketwatch/ev1030504.cfm Sorry found that on /. too :P
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His pants are tight...but his morals are loose!! |
03-09-2004, 12:10 AM | #9 (permalink) |
lost and found
Location: Berkeley
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Just when I thought the SCO furor had quieted to a dull roar... Man, I had a feeling that MS was involved, but this is very intriguing--and, of course, depressing. I check /. pretty often, but I guess their editors must have gotten leery of looking like a copyright news website and left the bulk of this off the main page. I think SCO is heading towards going down in a blaze of infamy, and they might just drag MS down with it, if the SEC and Justice Department would grow some balls.
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"The idea that money doesn't buy you happiness is a lie put about by the rich, to stop the poor from killing them." -- Michael Caine |
03-09-2004, 02:21 AM | #10 (permalink) |
Tilted
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My problem whith this whole thing is how are you going to sue on something that is so widely used and free? You can go to almost any linux sit and download linux for free. I think SCO is getting greedy an Microsoft is scared that they my actually have some compitition out there. Is there ever going to be an end to Microsoft's stupidity? I think not.
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03-09-2004, 02:41 PM | #11 (permalink) |
Sultana ruined my evil persona
Location: Los Angeles
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I'm just wondering when IBM is gonna bring the hammer down on SCO and squash them like a bug with their army of lawyers.
With Google, BofA and IBM getting sued I'm surprised SCO is still alive to see it go this long.
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His pants are tight...but his morals are loose!! |
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