Tuesday, 18 September 2007

SCO Files For Bankruptcy, Blames Linux For Mess

Almost a month after a court barred SCO Group from suing Unix owners, the group has filed for bankruptcy. SCO Group has blamed competition from the open source Linux operating system, as a reason for the company going aground...

Almost a month after a court barred SCO Group from suing Unix owners, the group has filed for bankruptcy. SCO Group has blamed competition from the open source Linux operating system, as a reason for the company going aground.

The company has filed for Chapter 11 bankruptcy protection.

SCO Group CEO Darl McBride said that SCO's sales of Unix-based products "have been declining over the past several years."

McBride said the decline "has been primarily attributable to significant competition from alternative operating systems, including Linux." McBride listed IBM, Red Hat, Microsoft, and Sun Microsystems as distributors of Linux or other software that is "aggressively taking market share away from Unix."

It may be recalled that SCO went to court claiming ownership over Unix and that Linux infringes on those copyrights. In 2003, SCO launched a series of lawsuits against rivals alleging their use of Linux was violating the copyrights. On August 10, a federal court judge ruled that Novell owns the copyrights to Unix and not SCO.

As a part of the judgment, SCO was asked to give Novell a portion of the fees that SCO has been collecting from selling Unix licenses— mostly to Sun and Microsoft. This means SCO will have to pay Novell as much as USD 25 million. And SCO has total cash equivalent of just USD 7.9 million and hence was forced to declare itself a bankrupt company.