"No One Respects a Bully"

Tuesday, December 16 2003 @ 11:40 PM EST

Contributed by: PJ

Rob Preston has an article on InternetWeek, called "SCO's House of Suits" in which he questions SCO's business strategy of suing customers, users, and maybe Novell. "Nobody respects a bully," he writes. Of McBride's three growth strategies, two of them depend on litigation and only one of them "has anything to do with creating value." At the same time, Preston writes, SCO has abandoned its only growth opportunity, its Linux market:

"Such tactics are a throwback to the Internet bubble economy, when it mattered little what a company made or sold as long as its clever business model kept Wall Street happy. . . . .

"SCO isn't focusing nearly as much on Unix as it is on harassing Linux partisans. . . . Every company has the right to protect its intellectual property (though SCO hasn't provided much evidence to support its legal claims). Regardless, it seems a tad shallow to base two-thirds of your company's growth strategy on suing people--customers, potential customers, other vendors. . . .you can't help but wonder when the house that McBride built will come tumbling down."

Preston compares SCO's strategy to Walker Digital, "the legal machine" that patented hundreds of "business processes" it claimed to have invented, insisting it would strike it rich by collecting royalties on those patents and infringements thereof. SCO, he writes, is chasing a similar dream. Walker Digital did not strike it rich off of patents.

If you've never heard about Walker Digital, here is an article in Salon, from 1999, "Jay Walker's Patent Mania --Is the Priceline.com founder a genuine inventor -- or an intellectual-property parasite?" The company ended up being sued itself, as you can see here. Red Herring reported in 2000, in an article entitled "Walker Digital loses Its Glow", that the company laid off most of its employees when it was unable to raise capital to keep the operation going. As Forbes described it at the time, "Walker's goal of parleying his patents into viable companies seems to be dimming with every day that passes." It's a cautionary tale. (The Red Herring server was having temporary difficulties when I tried to access the article, but here is the link, when it becomes available. Here is a story in Consulting Times on Novell's plans for their Linux market, including probably dual licensing, commercial and GPL.

While Preston says SCO has "abandoned its only growth market--its Linux customer base," I think it would be more accurate to say that the decision to divorce is now mutual. As Preston points out, no one respects a bully. Let's just say it's a divorce due to irreconcilable differences, with no realistic hope of a reconciliation until the sun falls out of the sky, the moon is no more, and pigs start to fly. All on the same day.