Fact and fiction in the Microsoft-SCO relationship

(continued from previous page)

Is SCO's claim baseless?
One can debate whether SCO's suit against IBM is credible, but it didn't spring from thin air. Some of the motivation dates back to the days when the company was called Caldera International, still sold a Linux product and had just completed acquiring its Unix intellectual property from the Santa Cruz Operation, a company that renamed itself Tarantella.

Through a collaboration called Project Monterey, the Santa Cruz Operation and IBM worked to develop a version of Unix for Intel's Itanium chip family. The software used IBM's version of Unix, AIX, at its heart but also included the Santa Cruz Operation technology, and the agreement called for IBM to pay royalties for its use.

That expected royalty stream was "one of the major reasons why we bought the asset," Ransom Love, Caldera's CEO at the time, said of the Unix purchase from the Santa Cruz Operation. But Love claimed that IBM then stiffed Caldera: First, it appended the AIX label to the Monterey product, much to the disappointment of resellers and IBM rivals such as Compaq Computer that weren't interested in an IBM-branded OS; and then it canceled its Monterey products outright--in favor of Linux--depriving Caldera of royalties.

When Caldera called a meeting to object, IBM made a "pathetic" offering of compensation, Love said. "They thumbed their nose, and said, 'Oh well.' They offered something like $50,000 or some ridiculous amount for settlement." Caldera couldn't afford to risk suing a major partner, so it instead chose to collaborate on Linux with IBM. "When you deal with these elephants in the industry, you kind of take both ends of them," Love said.

"In many cases that means our suppliers have backed down (from Linux) because they didn't feel comfortable on that indemnification issue."

--Tony Scott
CIO, General Motors

But IBM's support of Linux shouldn't have come as a surprise. Caldera and IBM both were members in 1999 of a separate project called "Trillian" to bring Linux to Itanium. After beginning sales partnerships with Linux sellers and investing in Red Hat in 1999, IBM trumpeted a $1 billion investment in Linux in 2000.

Regardless, Monterey now figures in SCO's lawsuit--specifically, SCO's argument that "IBM misappropriated the confidential and proprietary information from SCO in Project Monterey." That dovetails with a central SCO claim, that IBM moved SCO's Unix intellectual property to Linux against the terms of its Unix contract with SCO. IBM denied that and much of SCO's Monterey description in its legal filings.

Legal or not, don't Microsoft's activities involving SCO show how desperate Microsoft is to combat the rising adoption of Linux?
Yes. And if you think Microsoft doesn't play a particularly brutal brand of hardball, check in with Apple Computer, IBM, Netscape, Novell, Stac Electronics, Slate, Sony, RealNetworks and Lotus.

In the case of Linux, the OS is becoming a staple in the corporate computing diet--an outcome that Ballmer has called a key competitive challenge.

Is Microsoft's involvement reaping dividends for SCO?
Yes and no. SCO's bottom line hasn't firmed up, and its plan to sell intellectual-property licenses has largely failed so far, but some clouds of doubt are circulating over Linux.

For example, the SCO case has made the cautious stances of some companies, such as General Motors, seem less unusual. Though GM doesn't buy computing technology directly, instead contracting with others to install and run its systems, it does exercise some control that indirectly has kept Linux at arm's length.

"Where we've had a Linux proposal, we have not backed down from our requirement that there be an intellectual-property indemnification across the board for everything used to provide a solution for GM," Chief Information Officer Tony Scott said in an interview. "In many cases that means our suppliers have backed down (from Linux) because they didn't feel comfortable on that indemnification issue."

SCO's actions continue to generate ripples, if not profits, for SCO. Linux founder Linus Torvalds, while widely disparaging SCO's actions, has instituted a procedure to track Linux source code contributions. At the same time, start-ups Black Duck Software and Open Source Risk Management are trying to profit from the new attention devoted to open-source software and intellectual-property risks.

Hasn't the impact been fairly limited, considering that Linux continues to make inroads?

[fgoldstein]

Steve S really doesn't get it

Once again, a Steve Shankland article uses the childish bad-journalist definition of "objective" to totally muff a story. An article is not objective if, in reporting a dispute, it give equal credence to both sides, regardless of however imbalanced the evidence is. A good journalist calls a spade a spade. Yet here, Shankland acts as if SCO had a good case, and ends with an old quote from Darl McBride that implies that the case is headed to a jury. That is *extremely* unlikely. None of SCO's cases are that strong -- the countersuits are more likely to get there, with SCO as a defendant.

He also mixes up the AIX/Monterey issue with Linux itself. Most of the SCO suits are around Linux, except when they are losing, and claim that they're about an IBM contract. These are two distinguishable issues. There is a shadow of a case concerning IBM's role in Monterey, if they acted in bad faith in pulling out and recycling the code against what an alleged contract said. That remains to be seen. It's doubtful, but it has nothing to do with Linux.

The Linux issue began with McBride's asssertion that there were "millions of lines" of SCO-owned code in Linux. This falls flat on its kiester for various reasons:

1) There are zero lines of copyrighted Unix System V code in Linux; SCO never produced any, even after repeated discovery requests. (There are some lines in common, of course, but they're not subject to copyright, and mostly originate in standards outside of System V, or older versions.)

2) SCO doesn't own the copyrights in the first place. Novell just last week opened its corporate kit to show that their BOD, in selling its Unixware business to SCO, absolutely meant to retain the copyrights, as the bill of sale says. Novell, not SCO, is the rightful owner, and Novell's now a Linux shop.

3) SCO, formerly called Caldera, distributed Linux under the GPL, and therefore is bound by the terms of the GPL. That prohibits them from enforcing a closed-source copyright claim on that code.

All of those are probably grounds for dismissing all of SCO's claims on Linux. The judges are being methodical, and SCO is a master of dilatory tactics (presumably to give them more time to unload worthless stock on investors, er, speculators fooled by bad coverage). But there is obviously no valid SCO threat to Linux users. Microsoft has profited from the FUD, but it should be called just that, not treated as equally valid as evidentiary reality.

[fgoldstein]

Steve S really doesn't get it

Once again, a Steve Shankland article uses the childish bad-journalist definition of "objective" to totally muff a story. An article is not objective if, in reporting a dispute, it give equal credence to both sides, regardless of however imbalanced the evidence is. A good journalist calls a spade a spade. Yet here, Shankland acts as if SCO had a good case, and ends with an old quote from Darl McBride that implies that the case is headed to a jury. That is *extremely* unlikely. None of SCO's cases are that strong -- the countersuits are more likely to get there, with SCO as a defendant.

He also mixes up the AIX/Monterey issue with Linux itself. Most of the SCO suits are around Linux, except when they are losing, and claim that they're about an IBM contract. These are two distinguishable issues. There is a shadow of a case concerning IBM's role in Monterey, if they acted in bad faith in pulling out and recycling the code against what an alleged contract said. That remains to be seen. It's doubtful, but it has nothing to do with Linux.

The Linux issue began with McBride's asssertion that there were "millions of lines" of SCO-owned code in Linux. This falls flat on its kiester for various reasons:

1) There are zero lines of copyrighted Unix System V code in Linux; SCO never produced any, even after repeated discovery requests. (There are some lines in common, of course, but they're not subject to copyright, and mostly originate in standards outside of System V, or older versions.)

2) SCO doesn't own the copyrights in the first place. Novell just last week opened its corporate kit to show that their BOD, in selling its Unixware business to SCO, absolutely meant to retain the copyrights, as the bill of sale says. Novell, not SCO, is the rightful owner, and Novell's now a Linux shop.

3) SCO, formerly called Caldera, distributed Linux under the GPL, and therefore is bound by the terms of the GPL. That prohibits them from enforcing a closed-source copyright claim on that code.

All of those are probably grounds for dismissing all of SCO's claims on Linux. The judges are being methodical, and SCO is a master of dilatory tactics (presumably to give them more time to unload worthless stock on investors, er, speculators fooled by bad coverage). But there is obviously no valid SCO threat to Linux users. Microsoft has profited from the FUD, but it should be called just that, not treated as equally valid as evidentiary reality.

[Not Bugged]

Hoping for an over-patriotic jury?

So SCO are relying on a jury, and IBM are trying their best to prevent it getting that far.

But what if a Jury did go for SCO? Could a jury be biased towards the locals, or even worse, could the jury become madly patriotic. Linux is a chance for non-Americans to participate equally in the software world. A win for SCO, if non-Americans honour it of course, would be a chance for America to tax one of the largest growing sectors in the industry. Haven't SCO already tried to play this card with their letters to Congress?

I can just imagine SCO hoping for a jury that thinks along the lines of "Gawd Bless America - down with Johnny Foriegner". I just hope that such a thing doesn't happen.

[Not Bugged]

Hoping for an over-patriotic jury?

So SCO are relying on a jury, and IBM are trying their best to prevent it getting that far.

But what if a Jury did go for SCO? Could a jury be biased towards the locals, or even worse, could the jury become madly patriotic. Linux is a chance for non-Americans to participate equally in the software world. A win for SCO, if non-Americans honour it of course, would be a chance for America to tax one of the largest growing sectors in the industry. Haven't SCO already tried to play this card with their letters to Congress?

I can just imagine SCO hoping for a jury that thinks along the lines of "Gawd Bless America - down with Johnny Foriegner". I just hope that such a thing doesn't happen.

Smoking Gun

This report asks some relevant questions, but seems to have missed crucial evidence:

http://www.opensource.org/halloween/halloween10.html

Smoking Gun

This report asks some relevant questions, but seems to have missed crucial evidence:

http://www.opensource.org/halloween/halloween10.html

Good ending

MS is backing away from SCO and embracing some form of open source after trying to destroy it.

SCO will end up bankrupt, and hopefully anybody that worked there that had anything to do with this farce will never be empliyed in the IT industry.

If you have to litigate to stay in business, you shouold be out of business.

Good ending

MS is backing away from SCO and embracing some form of open source after trying to destroy it.

SCO will end up bankrupt, and hopefully anybody that worked there that had anything to do with this farce will never be empliyed in the IT industry.

If you have to litigate to stay in business, you shouold be out of business.

[knobsturner]

Paul Allen is a (the?) major investor in Baystar Capital

From the article on wired:

"BayStar Capital is a private equity fund that makes direct
investments in privately held and publicly traded companies.
One of BayStar's largest investors, according to BayStar (PDF), is
Vulcan Capital, the private investment vehicle of Paul Allen. Allen
co-founded Microsoft with Bill Gates, and is the second-largest
Microsoft shareholder after Gates."

So although the Microsoft and Baystar as _companies_ have
nothing to do with each other, Paul Allen is a major share holder
in both companies.

The Baystar connection is just a back door that MS can shove
money through.

This kind of hiding makes me sick. It may be perfectly legal for
Paul Allen to start up a company with his own (all MS derived)
money, and then say that the company has nothing to do with
MS, but the OWNERS are THE SAME people.

http://www.wired.com/news/business/
0,1367,62544,00%20.html?tw=wn_tophead_2

--Tom

Hmmm.

You raise an interesting point. Whether Allen really is this big-time investor is still speculation, though, correct? Although, I wouldn't doubt it.

MS has its ways of sneaking around things and getting where they want to be. Let's hope they don't get their way.

[knobsturner]

Paul Allen is a (the?) major investor in Baystar Capital

From the article on wired:

"BayStar Capital is a private equity fund that makes direct
investments in privately held and publicly traded companies.
One of BayStar's largest investors, according to BayStar (PDF), is
Vulcan Capital, the private investment vehicle of Paul Allen. Allen
co-founded Microsoft with Bill Gates, and is the second-largest
Microsoft shareholder after Gates."

So although the Microsoft and Baystar as _companies_ have
nothing to do with each other, Paul Allen is a major share holder
in both companies.

The Baystar connection is just a back door that MS can shove
money through.

This kind of hiding makes me sick. It may be perfectly legal for
Paul Allen to start up a company with his own (all MS derived)
money, and then say that the company has nothing to do with
MS, but the OWNERS are THE SAME people.

http://www.wired.com/news/business/
0,1367,62544,00%20.html?tw=wn_tophead_2

--Tom

Hmmm.

You raise an interesting point. Whether Allen really is this big-time investor is still speculation, though, correct? Although, I wouldn't doubt it.

MS has its ways of sneaking around things and getting where they want to be. Let's hope they don't get their way.