SCO drops licensing plan to concentrate fire on IBM

17 October 2003 SCO Group has suspended its demands for licensing payments from Linux users after receiving a $50 million infusion of cash from BayStar Capital.

There are also indications that the company will concentrate solely on its original $3 billion legal action against IBM, which it claims infringed its Unix operating system licence by contributing technology that SCO claims was derived — however tenuously — from SCO’s original System V Unix.

This follows a concomitant decision to put its action against graphics workstation vendor SGI on hold. It accuses SGI of similar intellectual property infringements.


SCO Group’s cash reserves had been running down at such a rate before it launched its legal action against IBM in March, that it would have run out of money at around the end of the year without either drastically cutting costs, significantly boosting revenue or raising more money.

In May, SCO CEO Darl McBride had told financial analysts that while the company had a number of investment offers on the table, it was not planning to follow any of them up because that would dilute the value of SCO’s shares.

However, the legal action has overshadowed the rest of SCO’s business, with the company’s survival hinging on a successful conclusion to the legal action against IBM, which will take several years to resolve if either company refuse to compromise.

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Ben Rossi

Ben was Vitesse Media's editorial director, leading content creation and editorial strategy across all Vitesse products, including its market-leading B2B and consumer magazines, websites, research and...

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