Remember the guy you knew in high school, the one that came from a nice middle class home, made friends easily, excelled at sports and made decent enough grades? You know, the same guy that 10 years later frequented the local pawn shop to hock his grandma's wheelchair for a crack rock? He really believed himself as he told the pawn shop owner "this is the last time", then proceeded down to the crack house and got shot to death by the crack dealer. Welcome to Darwinism, buddy.
Does this same theory of evolution exist in the corporate world? I think so. With only minor tweaking, the evidence is convincing. The crack house of the corporate world is the court house, the judge is the crack dealer, and Darl McBride is the rock star!.
Darl-win-ism (därl w-nzm) n.
10. Hire a CEO who has a history of failures and has sued at least one past employer.
According to this Fortune article, before being hired on as CEO of The SCO Group, Darl McBride shifted jobs at least 7 times with 5 different firms in a 6 year period. Perhaps he suffers from ADD? Another Forbes article reports that Darl sued his own employer (IKON) and won a settlement. Curiously, Darl claims he won a settlement "worth multiple millions", yet IKON disputes that amount. According to this poster, while Darl was Vice President he sued the company and it's CEO because the company failed to provide a performance based pay plan. Darl is a real team player. If you sat on a board, is this the CEO you would want working for you?
9. Hire a CFO who is currently involved in lawsuits filed by the bankruptcy trustees of the company he recently helped bankrupt (after blowing through a $7 Billion merger).
The venture capital firm currently funding Darl's crack habit, Baystar, recently told Darl that they want their $20 million back. According to this article, "BayStar expects major changes in SCO's senior management and wants the Utah-based company to focus more effectively on its Linux-related legal battles." In a brilliant display of Darlwinism, what does The SCO Group do? They replace the CFO, with a guy who is currently fighting a lawsuit from a former employer. Seems while he was CFO over a $7 billion merger he bankrupted the company, and now the bankruptcy trustees are suing for corporate waste and breach of fiduciary duty. This is a fascinating tale that is explained very well in a Groklaw article. All I can say is birds of a feather flock together. Or back to the crack allusion, there be a lot of ho's in this rock house!
8. Hire a lawyer in spite of his reputation of failing, repeatedly and spectacularly.
The middleman in this crack deal gone bad is the legal firm owned by David Boies. If you paid attention to the 2000 Presidential election, you may remember witnessing him lose, in a rather spectacular fashion, Al Gore's Supreme Court battle to contest the election results. This is also the man who battled Microsoft in anti-trust litigation for the US Government. It is commonly reported that the government "won" the anti-trust case against Microsoft. If you believe this you are insane in the membrane. It has been left up to various states and the European Union to attempt to remedy the predatory behavior still employed by Microsoft. Another case lost by this law firm - Napster. Need I say more?
7. Buy a failing business line with your linux business IPO proceeds, fail at both business models, then sue customers who use the product you actively developed, distributed, and promoted.
Starting in 1994 Caldera Systems, Inc. was a Linux company. Caldera made significant contributions to Linux and sold their own shrink wrapped commercial release of Linux. One of the most significant aspects of being a Linux company is that you implement a business model based on the use of open source software. Caldera developed, distributed, and promoted their products that used the GNU General Public License. In March of 2000 Caldera raised $70 million with their IPO, based on this business model and the usage of the GPL.
6 months later, Caldera Systems, Inc purchased two divisions of SCO in a stock swap and loans in a loan reportedly worth up to $91 million ($7 million in cash, $84 million in Caldera stock). During the nine month period before Caldera purchased SCO assets, SCO experienced a net loss of $36,174,000. (Old) SCO changed their name to Tarantella, the only successful product they retained.
In 2002 the new CEO of Caldera, Darl McBride, decided on a brilliant new direction for the failing company. Darl decided to reinvest development in the 20 year old legacy SCO Unix operating system, which is primarily used in cash registers. After the same old story of anything resembling success eluding him, Darl picked up the old familiar crack pipe of litigation (It will be different this time). You see, people are not buying SCO Unix, and it has to be somebody else's fault. It can't have anything to do with the fact that our product, and our corporate executives, suck. So now SCO is suing their own customers for using Linux, which SCO previously based their own business model on, helped develop, promoted, and contributed to. All along claiming that the license they previously based their business model on is unconstitutional, invalid, and unenforceable (I swear I didn't know crack was illegal, your honor). Go figure.
6. Fail to have your high dollar lawyers explain the meaning of copyright "ownership" and contract law before starting expensive litigation.AT&T beget Unix, and sold Unix to Novell. Novell sold Unix to (old) SCO, who sold Unix to Caldera, who morphed into The SCO Group. The SCO Group sues IBM, saying publicly that IBM is violating SCO owned copyrights, but in court only claiming contract violations against IBM. Oops, hang on a minute. Novell steps in with a little problem for The SCO Group. Turns out Novell sold the Unix business and contracts, not the copyrights. It appears that the SCO lawyers (see above) never actually read the Asset Purchase Agreement, because it specifically excludes the transfer of copyrights. Darl can't quite figure out what they spent $100 million on, so he sues Novell for slander of title. Turns out that crack rock Darl found in the carpet was a piece of rock salt.
5. Borrow from a business model based on suing pre-teens and 60 year olds.
During a conference call Darl McBride explained his brilliant legal strategy.
"It wasn't until the RIAA (Recording Industry Association of America) ultimately launched a series of lawsuits against end user copyright violators that the community at large became fully educated regarding the liabilities associated with using copyrighted materials without providing remuneration to the copyright owner. We believe that the legal actions that we have taken and will continue to take will have a similar impact on end users of Unix and Linux."
Well, there are a couple of holes in this boat. Most obviously, the customers Darl is referring to are multi-national, multi-billion dollar corporations. 12 year olds can't afford expensive lawyers, IBM and fortune 500 companies can. A company that is bleeding cash and experiencing it's crack daddy wanting it's money back is not in good shape to fight multiple lawsuits. The RIAA lawsuits had very little effect on the swapping of music online. Last but not least, you can't sue people for violating copyrights that are in dispute, much less for copyrights that you do not own (see above).
4. Attempt to extort licensing fees from fortune 1000 companies.
As reported in this article, SCO narrowed it list of lawsuit targets to the world's 1000 largest corporations, and actually sent letters to 1500 companies warning them that they had to pay SCO licensing fees or be sued. That is one hell of an interesting sales pitch. Buy my product, or I will sue you for using a competing product. Oh yeah, did I mention that it is disputed that SCO even owns the copyrights that they claim are being violated?
3. Offer to help your customers migrate to linux, then sue them for it.
Another beautiful example of Darlwinism in action. AutoZone is a former SCO customer who was told by SCO in 2001 that SCO was no longer going to support OpenServer. Instead of subjecting themselves to extortion by upgrading to UnixWare, AutoZone decided to migrate to Linux. According to the lawsuit that SCO subsequently filed against AutoZone for ditching their product, the migration to Linux went too easily, so AutoZone must be violating SCO copyrights by using SCO shared libraries with Linux.
The only problem with this little theory is that it is not true. Turns out SCO offered to help AutoZone migrate to Linux, and even put in a bid (SCO was Caldera at the time, a Linux company). The Sr Technical Adviser at AutoZone put a rather severe dent in SCO's assertions in a Groklaw post (see #1 entry below about pissing off intelligent people).
2. Sue one of the worlds largest corporations who employs the most battle hardened legal team on the planet, and who also happens to own the largest collection of patents.
Perhaps this resembles Darl's thinking. "Hmm, we are going down fast, have no money, have no product, what to do? I know, sue one of the worlds largest corporations! Yeah, that's it. Hey, pass that crack pipe, I'm done working for today".
In 2003, IBM had revenues of $89 billion, they have been in operation since 1888. The most effective weapon that technology companies employ to deter lawsuits nowdays is the patent. If you are a small technology company that attempts to sue IBM, chances are you will soon find out IBM owns patents on half of the technology you own. Every year since 1993, IBM has received more patents than any other company, over 25,000 between 1993 and 2003. You have to be smoking crack to imagine going up against this patent/IP portfolio.
IBM fought Sherman Act (anti-trust) charges in 1975, and won, walked away unscathed. Not many companies who have faced anti-trust charges by the US Government have won. IBM's lawyers are commonly referred to as the nazgul, from Lord of the Rings. They supposedly never sleep, are ruthless, and are loyal servants to their master. Other comparisms have been made to the skies of Utah being blackened by the hordes of IBM lawyers in black suits. You may have heard of the Dream Team employed by OJ Simpson, these lawyers are the Nightmare Team, only in your worst nightmares should they visit you.
1. Piss of a world wide community of extremely bright and creative geniuses by attempting to steal their work, insulting their intelligence, and calling them bad names.
It's the developers, stupid. Guess what Darl, if you want the operating system that you supposedly produce to succeed, you need developers. Developers and the ability to attract them make or break software companies, particularly producers of operating systems. Ever heard of IBM's Warp OS/2? Technically superior operating system, rock solid compared to the competitors at the time, but never installed on anything significant beyond ATM's. Why? Developers. IBM could not attract developers away from the Gold Rush known as Microsoft. Well Darl, if you accuse the most well respected members of the worlds largest collaborative development community thieves and terrorists, chances are you a shooting yourself and your company in the head. Particularly if you offer no proof, in public or in court. What little proof that is offered is almost immediately whacked as baseless FUD. The point is that these people are extremely intelligent, dedicated, and in some cases fanatical about what they have created and nurtured. If you are going to make accusations, have proof, and be ready to back it up.
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