SCO’s mixed results and wasted opportunities

The latest financials for the SCO Group show that the company’s revenues continue to shrink. For their first fiscal quarter of 2007, which ended on January 31, SCO reported gross revenue of US$6,015,000, compared to $7,343,000 from same quarter of the previous fiscal year. That’s a fall of 18 percent.

However, SCO seems to have slowed the bottom-line hemorrhage. For the first quarter, the losses were $(1,024,000), instead of $($4,581,000) from the same quarter in 2006.

A statement from Darl McBride, SCO’s president and CEO, attributed the declining revenues to “continued competitive pressures” on the company’s Unix products and services. The smaller-than-expected losses were attributed to a significant decrease in litigation costs against IBM and Novell – legal fees were only $654,000 for the first quarter of 2007, compared to $4,010,000 for the first quarter of 2006.

When you consider that SCO not only offers a decent operating system in its Unix distribution, and also has released some truly innovative solutions for mobile computing, such as its new HipCheck software, one can’t help but feel a sense of a wasted opportunity. If only SCO had decided to compete in the marketplace of ideas, instead of trying to litigate its way to a quick fortune, the company might have been a profitable powerhouse and McBride would have been hailed as a visionary leader. Instead, SCO is a failure, and McBride is a pariah. It’s truly a waste. But, by focusing on the courts instead of focusing on creating great products for his customers, McBride brought it on himself.

The best that we can hope for is that when SCO collapses, its products will be acquired (at fire-sale prices) by other companies who can make them successful in the market.

The March 15, 2007, issue of SD Times has some compelling coverage of SCO, and predictions about its future from some leading analysts. You’ll enjoy reading it.