SCO gets the nod as high-growth tip

By Matt Whipp

Posted on 16 Oct 2003 at 14:13

Deloitte Technology has featured SCO at number 75 in its list of the fastest growing tech companies in North America.

The list rates SCO for having staggering growth over the past five years. 'Attracting enough customers to maintain four digit growth over five years makes a strong statement about the quality of a company's product and its leadership,' said Mark Evans, national managing partner of Deloitte's Technology, Media and Telecommunications Group. 'We commend SCO for making the Deloitte Technology Fast 500 with a phenomenal 5,978 percent growth rate over five years.'

Currently SCO stock is on a high after receiving a 'buy' rating in a report from Deutsche Bank analysts, where it surged some 32 per cent to close at $20.50. Other analysts have suggested that the risk of SCO's strategy going pear-shaped and resulting in shares being worthless means that, despite the potential gains, a 'buy' rating may be over-confident.

SCO went public in 2000 as Linux company Caldera. But following a 4:1 stock split in March last year, SCO stock has been dawdling along at around the dollar-and-a-bit mark until the company started making claims about its Unix IP in Linux earlier this year, pursuing suits against IBM and now SGI, while pulling in revenues from licensing Unix IP to Microsoft and Sun.

Its SCOsource IP arm helped the company to its first ever net income in Q2 this year and now accounts for roughly a third of revenues - other revenues coming from its Unix products.

However, a recent survey by Credit Suisse First Boston found that 84 per cent of US-based CIOs from Fortune 1000 firms or equivalents were not going to change their plans to roll out Linux, despite the SCO threat. It also revealed that Linux was finding its way into more and more mission and data critical areas, with 'with negative implications for Unix'.

But SCO also withdrew its Linux distribution in the light of the IP violation claims it was making about the platform. It has raised much anger in the Open Source community over its actions, and whatever the outcome of its IP claims its long term future in Linux looks doubtful.