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Email ‘leak’ suggests SCO got up to $100m from MS

VC and IP deals cited as the route

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Updated An email apparently leaked from SCO suggests that SCO is far more dependent on Microsoft financial backing than previously thought. If genuine, it means that the company has already received something approaching $100 million, and that Microsoft has substantially larger sums, which it would by preference wish to transfer indirectly, available.

The email, published here with useful annotations at Opensource.org, purports to be from Mike Anderer of S2 Strategic Consulting to Chris Sontag, VP and GM of the SCOsource, with responsibility for the company's IP holdings. It is cced to SCO CFO Bob Bench. S2 itself has done contract work for SCO, and the email appears to concern SCO IP licensing as a route for obtaining funding from Redmond.

VC outfit Baystar Capital is referred to as a "Microsoft referral," this wording appearing to support suggestions that the $50 million SCO received from Baystar in 2003 was connected to Microsoft. "Microsoft also indicated," it says, "there was a lot of money out there and they would clearly rather use Baystar 'like' entities to help us get signifigantly [sic] more money if we want to grow further or do acquisitions."

Of the deals currently (although the email is dated last October) in the works, it says: "I just want to
get this deal and move away from corp dev and out into the marketing andfield dollars....In this market we can get $3-5 million in incremental deals and not have to go through the gauntlet which will get tougher next week with the SR VP's."

That certainly fits with the way Microsoft is; the company has large piles of money, but purse-strings for the likes of IP licensing are still pretty tight and controlled, whereas in marketing and field they are much less so, there is not so much need for a tangible immediate benefit, and the pot is much, much larger.

But we should be clear about what it is we have here if the email is genuine. It is from a CO contractor working with SCO IP licensing, and it contains a number of characterisations of what Microsoft's views and intentions are. These are not necessarily quite how Microsoft's execs might put it themselves, and the email does not constitute clear evidence that one or more senior Microsoft executives have as a matter of policy decided to launder vast sums of money into SCO in order to keep the company afloat and disrupt Linux.

Not, of course, that we're saying such a policy mightn't exist, just that the email does not provide evidence of its existence. It does, again if it's genuine, provide evidence that SCO is making money out of its IP portfolio, that Microsoft is targeted as a major current and future customer for this, and that Microsoft is quite understandably nervous about being spotted ploughing money into the company that's being tagged as its Unix attack-dog.

If it turns out to be real, then this email and related traffic would clearly be logical subpoena subjects for the companies on the receiving end of SCO's lawsuits, and it's not out of the question that such action would find a smoking pistol or two. But it could be all happening without a smoking pistol. Take one company nobody much likes any more, not much money, IP to convert, lawsuits to fight, who's it going to call? And take another with vastly more money than it needs, not many friends either, Linux-Unix interoperability-related goals, and a stated corporate view that Unix is good, Linux is bad. The latter doesn't actually have to invent the plot, because the plot will invent itself.

Then everybody will think it invented the plot anyway. Whatever - see if it's real, wait for the subpoenas, see if it leads anywhere. Considering the crass exercises in futility some of the emails in the antitrust actions led to, it still might.

Update: SCO has confirmed the email as genuine. More here ®

Related stories:
SCO takes Linux-loving auto industry to court
'We're just like the RIAA,' says SCO
Subpoenas fly in SCO vs IBM

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