With concern rising about SCO's recent legal maneuvers, many organizations are trying
to grasp the exact ramifications this may have on their deployment of GNU/Linux projects.
While there is clearly no solid answer yet, in a special to Open for Business, GNU/Linux
developer, consultant, and author Andrew D. Balsa interviews Tony Iams of D.H. Brown Associates (DHBA)
on the subject.
Mr. Tony Iams, Vice President, Systems Software and Operating
Environments for Industry-Standard Servers, manages the said DHBA division's
research programs, which he has built into the preeminent source of
research on commercial operating systems. His team of analysts focuses
on evaluating and contrasting the features and functions of the leading
system software products and technologies in use today, including UNIX,
Windows 2000, and Linux. D.H. Brown Associates, Inc. (DHBA) is a renowned research and
consulting firm that provides strategic analysis, assessment, and
evaluation of technologies, products, and market trends in the
Information Industry.
ADB: Do they have any chance of success?
TI: During a recent conference call with the company, SCO's CEO stated that
it had exhaustively compared the source code of Linux and its UNIX
systems, using three separate teams of programmers to examine the
source code files of each. He claimed that the programmers had found
numerous examples in which the Linux code clearly matched code in its
UNIX systems, including some cases in which it appeared the code had
been deliberately obfuscated to conceal its origin. SCO has not yet
made these examples public, so it is difficult to verify the company's
claims. Whether such infractions would be sufficient for SCO to claim
the damages it is seeking remains to be seen, but the case will clearly
shine a powerful spotlight on some key legal issues surrounding
GPL-based software.
ADB: I believe that the Linux community as a whole can benefit from a
clarification of any legal issues surrounding GPL-based software, but
right now what I see is FUD (fear, uncertainty, doubt) being fueled by
SCO´s allegations. Is this a zero-sum game in which SCO wins if the Linux community loses?
TI: No, SCO doesn't win if the Linux community loses the FUD war, because
that would not necessarily result in more business for SCO.
ADB: SCO alleges that IBM programmers wrongfully appropriated parts of
the UnixWare code they had had access to during Project Monterey and
included them in code released in the Linux kernel source.
How much of the case (SCO vs. IBM) rests on the allegation of
misappropriation of trade secrets?
TI: I don't have visibility over SCO's strategy to pursue its case.
However, during the recent conference call, SCO's CEO stated that the
instances of overlapping code appeared to extend beyond those areas
that were involved in the Monterey project with IBM, implying that some
code might also have been added by other parties.
ADB: So many allegations without any proofs would seem a little suspect,
no? SCO has alleged that it would not disclose the infringing code
before the case went on trial, but that could take years. However, a
German organization, LinuxTag, is taking legal action to force SCO to
disclose the code in question or withdraw its claims i.e. calling the
cards. How long do you believe SCO can hold on to its claims without showing
any proof?
TI: Since SCO filed its suit against IBM in the United States, it will be
up to the U.S. courts to determine when SCO must produce the evidence
for its complaints. Any legal action in Germany is a separate matter.
Germany has its own laws regulating competitive business practices, and
I can't comment on how those might be applicable to SCO's actions.
ADB: IBM filed in Court a rather short (compared to SCO´s initial
complaint) response, which is described in SCO´s website as a
¨boilerplate response¨, denying all of SCO´s allegations.
Where do things go from here? On who lies the ¨burden of proof¨
and how do you prove or disprove an allegation of misappropriation of
trade secrets?
TI: I am not a lawyer, so I can't comment on the legal process that this
case will undergo.
ADB: Caldera had bought DR-DOS from Novell for $400,000. More recently,
they bought SCO before changing their own name to The SCO Group. But
what exactly is the value of the intellectual property Caldera bough
from SCO? How do you measure it?
TI: I do not know what the industry-standard method is to measure the value
of intellectual property from a financial or a legal standpoint. As with
any other acquisition, though, the price paid for intellectual property
normally represents the value that the market will bear, i.e. Novell
sold DR-DOS to Caldera simply because no other company offered a higher
price for the technology at that particular time.
ADB: IBM has been pushing Linux to its clients. Why is this strategy good
for them and for their clients?
TI: The benefit to IBM is that Linux provides a common software platform
bridging its various hardware platforms. On 32-bit Intel servers, IBM
views Linux as a way to keep the middle tier open from Microsoft for web
applications. Linux is extending the life of IBM's mainframes by
allowing them to take on new applications that were out of the reach of
traditional mainframe operating systems, and providing some
opportunities for server consolidation using its strong virtualization
capabilities. On its pSeries systems, IBM is trying to provide the
leading platform for 64-bit Linux applications. In all cases, IBM can
straightforwardly add value to Linux with its middleware and database
software. The benefit to IBM's existing customers is the possibility of
reducing their costs for operating system software. IBM can also offer
Linux users the comfort of being supported by a large vendor with a
global presence.
ADB: Does it diminish the value of the original UNIX IP that The SCO
Group owns?
TI: It is not clear that the use of Linux on IBM's platforms directly
represent lost business for SCO. However, it is well known that IBM has
been helping the development of Linux in order to meet the goals
described above. Due to the nature of the GPL, the improvements
allegedly made by IBM benefit Linux running on all platforms, not just
IBM's. SCO appears to be arguing that IBM's improvements to Linux in
general hurt its business.
ADB: As of early May, The SCO Group has ceased shipping its Linux
products (which anyway only answered for an estimated 2% of its
revenues). What is SCO´s main line of business and how can they expect to
survive in the long term?
TI: SCO ships several operating systems, including OpenServer and UnixWare,
for which it charges licensing fees. It will soon release a development
technology called SCOx, which is designed to allow Small- and
Medium-Business (SMB) users who traditionally depended on its OpenServer
product to take advantage of web services.
ADB: The SCO Group (formerly known as Caldera) has its financial health
permanently monitored. Since its settlement with Microsoft in January
2000 (the terms of which remain secret), we have seen a sequence of
quarterly losses, diminishing revenues and overall diminution of assets.
But since the launch of the litigation against IBM, its stock (SCOX) has
risen from its more or less stable $1 level, to $8 or even more.
Do you believe that SCO executives have effectively increased
shareholder value through litigation? Isn´t this a risky business
strategy (win all / lose all) in the medium-to-long term?
TI: I have no comment on that.
ADB: Microsoft and The SCO Group have recently announced that Microsoft
has decided to license the UNIX IP that The SCO Group owns (again the
terms of the agreement are confidential).
Why and why now?
TI: Microsoft offers an option called Services for UNIX, which provides
UNIX-like functions for the Windows operating system. The option is
designed to make UNIX system administrators more comfortable on the
Windows platform by providing them with the UNIX tools they are familiar
with. This package contains software that may be based on SCO's UNIX
technology. Therefore, Microsoft has licensed the UNIX technology from
SCO to make sure it is not liable for infringement.
Microsoft makes no secret of its concerns about the competitive threat
that Linux represents, and it has long tried to raise questions about
the long-term viability of business models based on GPL software. By
licensing SCO's technology, it legitimizes SCO's claims against Linux,
which will help to increase potential doubts in Linux users introduced
by SCO's actions.
ADB: Some people claim that in the end, only two operating systems will
survive in commercial operations: Windows and Linux. Does this make any
sense?
TI: A powerful trend has emerged in the IT industry that advocates the use
of industry-standard technology for as many workloads as possible. Many
organizations have concluded that they can lower costs by reducing the
number of hardware and software platforms in their IT operations. This
has made the use of industry-standard Intel-based servers more popular
than ever, and with the scalability and reliability of Intel-based
hardware consistently improving, the use of Intel-based hardware incurs
fewer compromises than in the past. For a long time, the use of
Intel-based platforms also implied the adoption of Windows, since it
had been the leading OS optimized for the Intel architecture. Now,
though, users have a choice of powerful operating systems for
Intel-based servers: Windows or Linux.
As users increasingly rely on Intel-based hardware for a variety of
commercial server workloads, the presence of both Windows and Linux in
server environments will thus increase correspondingly. No platform ever
disappears completely, and a variety of existing server platforms will
live on, reliably performing the workloads for which they were
optimized. However, as long as users continue their convergence on
industry-standard technology, Windows and Linux will be the preferred
operating systems for a growing number of new applications.
ADB: Where does that leave companies that have heavy long-term
investments in their own, proprietary versions of UNIX (e.g. Sun with
Solaris)? Will the various UNIX variants end up being relegated to
legacy or niche applications? Shouldn´t Sun adopt the ¨if you
can´t beat them, join them¨ attitude and imitate IBM and
HP/Compaq by making Linux an integral part of its business?
TI: Yes, and Sun is indeed increasing its focus on Linux products. For
example, it recently introduced the Sun Fire V60x and V65x servers,
which run standard Linux, and also announced that it is becoming a Tier
1 premier partner with Red Hat. Sun has been a supporter of and
contributor to certain Linux and open source projects such as OpenOffice
and GNOME, and it is becoming aggressive in developing Linux-based
desktop clients. Finally, as part of its Project Orion initiative, Sun
is developing an integrated software stack for Linux that includes
cluster, storage, directory, and web serving/services.
© 2003 Andrew D. Balsa, All Rights Reserved.