CRN Interview: SCO's Darl McBride and Chris Sontag

SCO CEO Darl McBride and Senior Vice President Chris Sontag met with CRN Industry Editor Barbara Darrow and VARBusiness Senior Executive Editor T.C. Doyle in Las Vegas. The conversation took place just hours after SCO said it made its chief litigator, David Boies, a stakeholder to the tune of 400,000 shares plus $1 million dollars.

Earlier this year SCO charged that IBM had illegally turned over Unix code to the Linux community. Tuesday, SCO said it will likely sue an end-user company using the Linux code at issue in the suit. The SCO-IBM case is slated to hit a Utah courtroom in 18 months.

CRN: You're paying David Boies [of Boies, Schiller & Flexner LLP] about $9 million to pursue your claims against IBM?

Darl McBride: We are giving him 400,000 shares of stock and $1 million in cash. When I said we have $60 some million in cash [on hand at SCO], reduce the cash by $1 million and we take non-cash charge. David comes on, he's now a shareholder, he's rowing with us, and let's face it, he's added significant value to our company since February. Our stock was around a buck, now it's $14. That's some of the best money we've spent, not even money, some of the best stock we've issued. Now we're broadening our scope and going after the cleanup project. The breadth of damage that's been done here, it's like cleaning up the Exxon Valdez... the code violation that is going on inside of Linux between derivative work, copyrighted work, it's not unsubstantial.

CRN: Can suing customers, as you've said you will, be good for any vendor?McBride: First it's not our customers. I would say we're suing end users. There are only two industries who use the term 'users,' computers and drugs. Not sure if there's a connection there. But the point is, we're not suing our customers. We are going after end users of Linux and I think there's a slight but significant difference there.

CRN: When you talk to your VARs, partners, integrators... what are they saying about this legal battle? Is it confusing their market?

McBride: It's a range. Those who are directly selling SCO Unix products, are cheering us on, saying go, fight, win. Those who have drifted over to the Linux camp are confused. They don't know how to deal with this... 'What do we do?' It depends on where they are in the process.

CRN: Are you trying to evangelize them to speak out in your behalf? It's clear the open source crowd needs no encouragement to tell their side of the story.

McBride: My first reaction was we needed to create a counterbalance [to the vocal open sourcers]. We're on the side of the silent majority...but at the end of the day it's around who's right. We're rock solid on our claims... and we're not sitting here day in day out trying to counter the stones being thrown at us. We have a business to run. Our employees are reenergized around the movement back to Unix, reenergized around the role SCO is playing... . Our roots in the Unix business are strong and won't be blown over by a little bit of Linux wind.CRN: Conspiracy theorists say you guys are acting as Microsoft's pawn against open source and the General Public License [GPL]. Can you comment?

McBride: The funny part is we didn't even talk to Microsoft about this outside the normal public interest level things... when we talk to them it's about what's happening in the marketplace. [I know] there is this feeling that something's happening here... . It's funny when I talked to IBM earlier this year, before we did anything, it wasn't even clear where the IP problems were. We just said we were going to start investigating IP issues, and IBM said, 'You're just giving Bill Gates an early Christmas present.' Bill Gates? This is about our IP! What are you talking about? This was the immediate reaction at IBM and the open source guys. Unfortunately for them, it's just not reality.

(The above is an edited version of the Q & A. For a full transcript, see CRN Interview: SCO's Darl McBride and Chris Sontag.)