SCO’s Darl McBride bites back

For most of his career in the IT industry, Darl McBride was a largely unknown executive working at Novell Inc. and several other companies. But nine months after he joined The SCO Group Inc. as its president and CEO in June 2002, McBride’s name became a household word in the IT world. That’s when Lindon, Utah-based SCO filed a US$5 billion lawsuit against IBM, alleging that it improperly contributed some of SCO’s Unix intellectual property for use in Linux.

SCO also sued Novell, charging that McBride’s former employer had falsely claimed to own the legal rights to Unix. It then went on to file additional lawsuits against some large Linux users. Last month, SCO was handed a big defeat when a U.S. District Court judge in Utah ruled that Novell is in fact the owner of the Unix and UnixWare copyrights. The judge also ruled that as a result, Novell could direct SCO to revoke its copyright infringement claims against IBM.

McBride, who is 47, spoke recently with’s sister publication Computerworld about the judge’s decision and where SCO will go from here. Among other things, he said that the Novell case isn’t over and that this is “one of the more exciting times” for SCO. He even invoked Apple Inc.’s comeback from business problems and said that his company has an opportunity for a similar turnaround. Excerpts from the interview follow:

As the legal cases have slogged through the courts, you consistently have said publicly that SCO had the legal arguments to win and that you wanted your day in court. In light of last month’s court rulings, are you prepared for the idea that you actually could lose this whole legal fight? We absolutely and fundamentally believe we are right in this case, and we believe in the justice system. But we also know that things don’t always happen the way they’re supposed to, and we’re realistic about that point.

We don’t believe that this latest ruling was a reflection of the facts that were involved in the case. And the way the system works, we get a chance to put up an appeal. One of the things that we’re looking at right now is an interlocutory appeal, or a halt midstream, [to get an immediate ruling even as the trial proceeds].

Let’s call a spade a spade: We just took a literal pounding. We got knocked down — there is no doubt about it. This is not a good ruling for us. But it’s not the end of the line of the legal battle. In fact, there’s some very encouraging things that came out of even this ruling. And we will continue to fight on those fronts.

Can SCO survive even if it ultimately loses the legal fights? I think it’s one of the more exciting times for this company. There’s a story my general counsel shared with me. By coming out right now and saying this is an exciting time, it’s like the boxer who has come out of the ring after getting all beaten up, and he comes over to his trainer and says, “The guy didn’t touch me.” And the trainer says, “Then you better keep your eye on the ref, because somebody’s beating the living hell out of you.” I run a little bit of a risk of that metaphor coming into play here by saying how excited we are, because we truly are disappointed [by the court rulings].

So where does SCO go from here? I think about how you view waves of the ocean. Think of SCO in the first wave as SCO 1.0, with OpenServer Unix on Intel. As that wave comes down, we’ve been paddling out, looking to get on the next wave. On SCO 2.0, we’ve looked to climb on a new wave [with the company’s mobile applications platform], but the surfboard that we’re getting on is the same board as before — which is Unix. We have been focused for three years on Unix and on becoming the leading platform provider of mobile business solutions, and by 2010, we want to be the market leader in that space.

If you look at the market statistics, it’s wild just how big the numbers can get with 3.5 billion cell phone subscribers out there. What we’re looking at doing with this is to put together a platform and tool kit [that enables] people to develop or deploy applications in real-time environments on a mobile smart phone. We probably have a dozen applications right now that we’ve developed in the last couple years on top of this platform. We hope to get out there and get thousands of these applications on our platform.

That one business alone could be $70 billion to $80 billion a year. If we can get 20% of that market share, it would be big for SCO. We’re not going to get all of that because we don’t have a $70 billion market reach right now, but we have technology that would work for big carriers who have that kind of market reach. So we think we’re really on the verge of some pretty big things in this mobile business that we’ve spent the last three and a half years working on.

We’ve been planning for the moment of moving to SCO 2.0, and that moment is upon us. We were hoping that we were going to be moving with a big push behind us [from the court cases]. It ends up that we’ve hit a bit of rough water, and it’s not going to be quite as simple as we thought it was going to be. But let’s not be mistaken here: We have a very big opportunity to become the mobile flavor of Unix. That’s what we want to be.

With all that has happened so far, is there anything you would have done differently if you could replay the past five years at SCO? It’s hard to say in retrospect what you’d do differently. If you asked a football player after a game, “Would you have done anything differently,” he might say, “Yeah, I would have zigged when I zagged, and maybe I would have done this.” I haven’t reflected exactly on that. What I can say is that at every point along the way, I have done what I thought was the right thing to do at that point in time. If we look at where we are right now, it’s not the end of the line. We’re at a very tough point in the game.

Have any good things come out of all of this over the past few years? SCO’s financial results have been down, and you’ve been bashed in the media and by open-source advocates. Some people have gotten out. Those who stayed have gotten very tough. It’s a lot like we’ve been through a five-year refinery fire. The bad news in that world is that it gets pretty hot at times. The good news is that you get pretty dang tough over time.

I’m very proud of the company and its employees for the work they’ve put in on the development project on mobility applications. The fact that none of it was on our plate when the lawsuits were filed speaks very highly to the type of employees we have.

Since the lawsuits were filed, you personally have been criticized and ridiculed in various blogs and publications. How do you view the comments of your critics? It’s a little bit of a strange twist to the story how I’ve become the most hated man in the industry. I was speaking at Brigham Young University last year, and I held up the Fortune magazine that had me on the cover that said, “He’s corporate enemy No. 1, and his name’s Darl McBride.” I said it must have been a slow year for corporate enemies.

I think this thing has been overplayed just a tad. Part of the game plan of our opposition on this was to paint me in a light that was not favorable. They’ve obviously done a good job at that. But when somebody takes something from me — my father taught me growing up on the ranch that you’ve got to stand up and defend yourself. I don’t tend to go out and pick fights on my own, but I also don’t tend to back down from one when someone’s coming after me.

There’s a story here that we can really get this thing turned around. If you look where Apple was 10 years ago, they were on their back. They were just about down and out, and they came back. What brought them back into it was innovation, with really cool new products. That’s the mantra we’ve had for a long time inside this company. The best form of revenge is success. We believe that over time, this whole thing about us being the pariah of the industry or trying to pick on the poor Linux guys, that’s not what it’s about.

If SCO is to survive despite all the challenges you face, how will that happen? I think there’s an element to SCO that reaches beyond a typical company, and I think it has to do with the broader-scope community of our customers and our resellers. We just came out of our [annual] SCO Forum in Las Vegas last month, and we had one of the best forums we’ve ever had. The customers and the resellers were just so enthusiastic about where we are going. They’re all talking about how SCO Unix is so much better than Linux, and are so supportive of what we’re doing and of our legal battles. And this is the first year that they’ve really taken to this whole mobility story.

One of the mantras we have is that if you get knocked down seven times, you just get up eight times. Heaven knows we’ve been knocked down.


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Jim Love, Chief Content Officer, IT World Canada

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