SCO sees up to $12 million in new Unix licensing

The SCO Group Inc. predicted on Thursday that it would book between US$9 million and US$12 million in revenue on Unix licensing deals with technology companies in its next financial quarter.

The disclosure came during SCO's quarterly financial conference call, where the company predicted that the revenue would come from its SCOsource licensing initiative, which was created in January to manage licensing fees for the System V Unix source code that SCO owns.

SCO is in Unix license negotiations with a number of companies, according to company spokesman Blake Stowell, who declined to identify the companies. The US$9 million to US$12 million revenue in question is expected to come from technology companies looking to secure the Unix rights, and not from Linux users signing up for its Intellectual Property License for Linux program, Stowell said.

SCO has booked over US$13 million this year in SCOsource licensing deals with Microsoft Corp. and Sun Microsystems Inc.

Last week SCO branched beyond licensing Unix to technology vendors, when it created a new SCOsource product aimed at Linux users called SCO Intellectual Property License for Linux.

SCO claims that the Linux source code violates its intellectual property rights and has offered its Linux license, at a price of $699 per processor for server users, as a way of bringing Linux users into compliance.

The license was blasted by Linux advocates as unnecessary, but a few days after it was announced, SCO said it had already signed up a Fortune 500 company for the license.

Whatever that company may have paid for licensing fees, it is not being factored into SCO's projections for the next quarter, according to SCO CEO Darl McBride. "We think there is a lot of upside here," he said, referring to the Linux license during SCO's earnings conference call. But, he added, "we're going to see how that plays out before we start giving guidance there."

During the call, McBride revealed that SCO's legal expenses had amounted to between US$600,000 and US$700,000 to date, much less than US$1 million per quarter the company had expected to pay for the services of the high-profile Boies, Schiller & Flexner LLP law firm. "We have spent less than half of what we have budgeted so far," he said.

McBride also took a moment to take a shot at Linux's GNU GPL (General Public License). "Building your company on a GPL license is like building your enterprise software on quicksand," he said. "Everybody is scared to death that their own IP is going to get sucked into this GPL machine and get destroyed," he said.

SCO, which until a year ago went by the name Caldera International Inc., was itself considered a major supplier of GPL software, until it suspended its Linux shipments in May of this year.

The company's US$20.1 million in revenue for the quarter was up from its year-ago revenue of US$15.4 million, largely on the basis of US$7.3 million it booked from the Sun and Microsoft licensing deals. Net income for the quarter was US$3.1 million or US$0.19 per diluted share, the company reported. A year ago it reported a loss of US$4.5 million, or US$0.35 per diluted share.

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