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SCO's Biggest Stalwart Microsoft?

By Jay Lyman
Aug 1, 2003 3:10 PM PT

Unix software maker SCO might not be making any friends in the open-source community with its plan to sell licenses to corporate Linux users, which the company claims have infringed on its own source-code copyrights.

SCO's Biggest Stalwart  Microsoft?

However, the small Lindon, Utah-based company might be earning silent cheers from others, namely Microsoft, who are eager to see Linux -- and the open-source movement -- stumble.

"There's a lot going on behind the scenes," Yankee Group senior analyst Laura DiDio told TechNewsWorld. "Not necessarily coming out to say they support SCO or coming to their defense, but I think there are a lot of behind-the-scenes machinations."

Microsoft On Board

SCO, which sued IBM over source code in March, created a storm of criticism and controversy with its proposal to sell licenses to some 1,500 corporate Linux users earlier this summer. Still, the Unix software maker has meetings with about a dozen of the companies next week, SCO spokesperson Blake Stowell told TechNewsWorld.

Microsoft, among a few other companies, has already purchased a license to free the company of future claims against Linux. The deal is estimated at about US$10 million. Stowell would not discuss the terms of the deal, but confirmed Microsoft as a SCO ally.

"We sold Microsoft a license in the second quarter of this year and they're in compliance and good standing and continue to be a partner of ours," he said.

SCO Moves Solo

Gartner's DiDio, who has warned of the seriousness of SCO's legal claims and the potential for liability, said Microsoft was not surprisingly among the first supporters of SCO's plans.

"They stepped right up and certainly they are supporting them tacitly," DiDio said.

However, when asked if Microsoft was supporting or helping SCO behind the scenes, Stowell said "not at all."

"This is something we've been doing completely independently of anyone," he said.

Big Possibilities

DiDio criticized IBM, the target of SCO's source code claims, for failing to state whether it will fully indemnify its customers.

"IBM really needs to say whether it will or will not indemnify," DiDio said. "If they won't, they should say so. It would give customers a much better idea of where they stand."

DiDio also said that despite prior complacency on the SCO suit and its call for licenses, the company's recent registration of copyrights makes the issue "more real." The analyst also said there is a possibility that a larger IBM rival -- such as HP, Oracle or Sun -- might take up the SCO cause by buying the company.

"Then IBM doesn't have a small company -- but an equal -- going after them," she said.

Seizing on SCO

Forrester industry analyst Stacey Quandt, who said SCO's license solicitations are "based on allegation, not facts," told TechNewsWorld that there are not any big industry players interested in getting in the middle of the SCO matter.

Analysts have indicated some apprehension expressed by corporate IT customers over entering into a Linux deployment because of the SCO issues. However, Quandt said the ability of an IBM competitor to take advantage of the situation is limited because Unix is a declining market while Linux is a growing one.

"Essentially what SCO has is a legacy business," Quandt said. "Their new business is now regarding their [intellectual property]."

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