Microsoft Shown Involved with Baystar and SCO
October 11, 2006 Leave a comment
Amazing how long we go between SCO stories these days, isn't it? From the Groklaw article:
On page 21 in IBM's Amended Redacted Memorandum in Support of its Motion for Summary Judgment on SCO's Interference Claims (SCO's Seventh, Eighth and Ninth Causes of Action [PDF], IBM reveals that SCO alleged that it was IBM that got BayStar to threaten litigation against SCO and to terminate its business relationship. BayStar denies it, as does IBM. If you noticed a Declaration by Larry Goldfarb on the list of exhibits [PDF], this is what it's about. He provided a declaration for IBM stating that SCO's allegations aren't true. A lot of folks have done so too, and so IBM is now asking the court to toss out these three SCO claims.
BayStar, Goldfarb testifies, dumped SCO because its stock price, financial performance and the viability of its UNIX products all appeared to be in decline, and he “was also very concerned about SCO's high cash burn rate.” Pure financial animals get nervous when that happens. But the kicker was he began to realize that Microsoft, whose senior VP of corporate development and strategy had promised that Microsoft would in some way guarantee the SCO investment, started showing signs it might not do that after all:
“Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would 'backstop,' or guarantee in some way, BayStar's investment…. Microsoft assured me that it would in some way guarantee BayStar's investment in SCO.” After the investment was made, Goldfarb says, “Microsoft stopped returning my phone calls and emails, and to the best of my knowledge, Mr. Emerson was fired from Microsoft.”
While various previous leaks implicated Microsoft in the funding of the SCO charade, nothing as concrete as this had been released to my knowledge. The ironic part here, is that in the end, it appears this case may have helped both Linux and Open Source. It has given credence to the GPL, spread the word about Linux in places it may not have gotten exposure and it's made IBM and Linux a well-known, well-regarded combo. Even worse for Microsoft, I'd guess that IBM (and potentially Novell) will probably go after them now. As a monopoly who has already gone through litigation with the DOJ, this would be bad for them. Potentially very bad. In a year that is likely going to see Vista delayed one last time, this is certainly a headache they don't need. This may get more interesting than I'd have thought.
Microsoft, MSFT, SCO, Baystar, IBM, Linux, Open Source