Commentary: IBM will nullify SCO's Linux threat

By Ted Schadler with Christopher Mines

SCO Group has launched a high-profile, and ill-conceived, effort to sue IBM and threaten its own customers to stop their adoption of Linux. Should companies using Linux worry? No. Forrester expects that IBM will build a consortium to pay off SCO--or buy it outright.

SCO's headline-grabbing lawsuit against its customer IBM for $1 billion alleges that Big Blue stole SCO intellectual property and gave it to the Linux open-source community. SCO has gone further to threaten 1,500 companies that they might be liable for their use of the Linux operating system. And Microsoft has inked a licensing deal for SCO's Unix code.

So what's going on? Forrester spoke recently with executives from IBM, Microsoft and SCO to get the facts. Forrester believes that SCO's legitimate goal--to make money from its intellectual property--has been overshadowed by the company's publicity-laden plot to raise its visibility and, hence, acquisition value.

Here are our conclusions:

• Enterprises should not stop their Linux plans. Why not? Three reasons based on a risk/benefit analysis. First, the cost-benefit of migrating high-priced Unix on RISC servers to low-cost Linux

		Related story IT managers scrutinize SCO suit Companies are moving ahead with their Linux plans while keeping an eye on the legal wranglings between SCO Group and IBM.

• IBM will build a consortium to pay off SCO--or buy it and shut it down. IBM and Hewlett-Packard each booked more than $2 billion in Linux-driven products and services last year, and Dell Computer reports that 20 percent of the servers it sells don't run Windows. (Hint: Those servers run Linux.) That gives these vendors a powerful incentive to remove any licensing annoyance. Forrester believes that IBM or an IBM-led joint venture will pay off SCO or purchase it outright. No more lawsuit; no more problem.

• Open source is too powerful and pervasive to be stopped. Open-source software, like music downloading, is a social phenomenon that uses the Internet to circumvent obstructions to distribution. This doesn't mean that licensing laws or intellectual property rights disappear. But it does mean that companies must accept the Internet-enabled distribution phenomenon and build new business models that support it--such as Apple Computer recently has done with music downloads.

© 2003, Forrester Research, Inc. All rights reserved. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change.