Bonum Certa Men Certa

Linux Scrutiny Awakens an Interesting Science of Battling by Proxy

"...Microsoft wished to promote SCO and its pending lawsuit against IBM and the Linux operating system. But Microsoft did not want to be seen as attacking IBM or Linux."

--Larry Goldfarb, Baystar, key investor in SCO



"[Microsoft's] Mr. Emerson and I discussed a variety of investment structures wherein Microsoft would 'backstop,' or guarantee in some way, BayStar's investment.... Microsoft assured me that it would in some way guarantee BayStar's investment in SCO."

--Larry Goldfarb, Baystar, key investor in SCO



"On the same day that CA blasted SCO, Open Source evangelist Eric Raymond revealed a leaked email from SCO's strategic consultant Mike Anderer to their management. The email details how, surprise surprise, Microsoft has arranged virtually all of SCO's financing, hiding behind intermediaries like Baystar Capital."

--Bruce Perens



"Microsoft hardly needs an SCO source license. Its license payment to SCO is simply a good-looking way to pass along a bribe..."

--Bruce Perens



THE Linux kernel is one of the most fascinating bits of software out there, perhaps owing to the vast number of contributors who are responsible for creating it. The Linux kernel has spread into many areas of our lives and it is used extensively in embedded devices where its presence goes largely unnoticed. Linux is also ubiquitous in servers and its growing success in that area often came at the expense of other established software companies.

With the growing attraction of Linux comes great fear among its rivals. Contributors and proponents of Linux are motivated by the fact that Linux is Free software. Ownership is warped such that the user truly owns the software, rather than essentially 'rents' it by paying for license to use. This makes Linux a very disruptive technology, but success can be attributed to other factors also.

SCO Makes an Appearance

The development methodology of Linux, its cost, and that question of ownership can also be used as an argument against it, especially by fierce opponents whose territory is being encroached upon by this mighty kernel. This has truly been the case ever since SCO chose to take a litigious route to combating Linux.

SCO asserted that Linux developers had stolen SCO's code. For several years a legal battle persisted which ended up with SCO filing for bankruptcy. After over 4 years, SCO is still unable to prove its claims, which it was never willing back in an upfront fashion.

“It blamed not only Linux but also a newly-earned public image problem for its demise back in September 2007.”In many ways, SCO's dragging of time contributed to greater fear, uncertainty and doubt. It had some companies hesitant about deployment of Linux in their environment. That, however, did not work in SCO's favour. There is this unfortunate dilemma to face when one launches a legal assault against its own customers. Many businesses used SCO and Linux at the same time, which led to backlash. SCO learned this the hard way. It blamed not only Linux but also a newly-earned public image problem for its demise back in September 2007. Its presently-departing CEO admitted this in an interview.

To many observers, SCO's battle against Linux seemed like a bad idea right from the very start, much like the recent investment of $100 million in SCO. This later turned out to be a takeover and we will get to that at the end of the article. It is widely agreed that SCO lost its focus on development due to litigation, which led to decrease in staff and talent. Alienation can be costly and quality of products is harmed accordingly.

The only return on a new investment in SCO might therefore be legal compensation, but launching a case based on poor or imaginary evidence is unlikely to bear fruit. Moreover, after so many years of continued failure to make much progress, the greatest of hopes is that this trial can carry on, yet the outcome seems rather predictable. To SCO, the desired outcome is probably unreachable, but this could be a question of duration, not vocation.



House mortgage



SCO's Past Funding

Speculations and accusations have been flying about since SCO's case against Linux had begun. Passionate advocates of Linux sought to discover an involvement by other parties who would benefit from SCO's actions and affairs. At one stage, Scott McNealy of Sun Microsystems made a statement that used SCO's assault as a way to promote Solaris at the expense of Linux. More conspicuous, however, was Microsoft's role.

“Among the payments that SCO received there were Sun's and Microsoft's payments -- for what was thought to be a right to use UNIX.”Several years back it was found that one of the several strategies for combating Linux was to concentrate on its perceived weaknesses. Examples which were found in Microsoft's Halloween Documents included copyrights and software patents. These documents were intended to discuss ways of defeating the growing threat of Linux -- a threat so great that it has been listed among the #1 risks in Microsoft's SEC filings for almost a decade.

SCO was a struggling software powerhouse even before resorting to lawsuits. The unfortunate reality can still be seen in the SCO UNIX Follies videos, which are available for viewing on YouTube. As the lawsuits went on for years, the high cost of lawyers took its toll and the company required more considerable investments from the outside. Shareholders went elsewhere, indicating that they had too little faith in the company's future.

Among the payments that SCO received there were Sun's and Microsoft's payments -- for what was thought to be a right to use UNIX. Only later it turned out that the owner of UNIX is actually Novell, so SCO has a debt now. Nevertheless, therein you have a situation where 3 companies which compete against Linux shared wealth in one way or another and this enabled the lawsuits to linger on and hurt the uptake of Linux.

There were other curious funds that SCO received throughout its lifetime, even when its main role was that of a plaintiff in court. These include an investment from BayStar, a venture capital firm. In a court declaration it emerged that Richard Emerson, a Microsoft employee, was involved in BayStar's investment in SCO. A BayStar representative later added: "Yes, Microsoft did introduce BayStar to SCO."

SCO Once Again to Attack Linux

The legal proceedings never ended and they are bound to resume in April. Nevertheless, until last week SCO was seen as a company that would be decommissioned by the end of the year. But then something happened.

Last week, a press release surfaced which surprised many pundits and analysts who had been covering this saga. It seemed to suggest that SCO would continue its legal battle against Linux, having received a very large cash infusion. The odds of seeing returns on these investments seem mere. That sentiment of misunderstanding is echoed almost everywhere you turn.

SCO maintains its image problem and it also carries that aforementioned heavy debt. It owes money to several parties including Novell and it could face followup lawsuits (comeback claiming damages) from victims of its own lawsuits, assuming money remains in its coffers. Why would anyone invest in SCO? More importantly, why now? That remains the key question in many people's minds.



Originally published in Datamation in 2008

Comments

Recent Techrights' Posts

It Has Cost $215,000 in Legal Costs to Sue IBM for Wrongful Termination
IBM typically settles out of court and demands secrecy (to avoid anyone else benefiting from the very expensive outcome)
The PIPs or 'Voluntary Termination Offers' Help IBM Fake Its Situation
"IBM is not a tech company"
 
While GAFAM/Microsoft Disguise Financial Crisis as "Investment in AI" the Slop Giants Make Up a Narrative of Wilful Slowdown
A BS artist is good at the art of BS when the artist's failures or weaknesses get twisted as moral or professional leadership
SLAPP Censorship - Part 184 Out of 200: A Tiny Law Firm That Knows Nothing But Microsoft (But Merely Pretends to Understand "IT")
They've managed to trick some mainstream media into thinking they're "Tech" experts or "Social [Control] Media" gurus; nothing could be further from the truth
Links 15/09/2026: Sweden’s Far Right Perishing and "Iceland Just Got Played"
Links for the day
It's Not About How Developers Vote
This isn't about politics, it's about users being in control of their own computers and computing
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, September 14, 2026
IRC logs for Monday, September 14, 2026
Gemini Links 15/09/2026: Poetry, Enshittification of Ebay, and Mecha System
Links for the day
LG Lies to Cover Up Lies About Its Spying TVs (It Records and Transmits Conversations in Rooms)
This is what a lot of "modern" technology is like
Oracle's Debt Continues to Soar (Increase of 60 Billion Dollars in 15 Months, Not Counting the Secret Debt, With Off-balance-sheet Debt Having "Grown Roughly Thirtyfold in Four Years")
Oracle debt continues to grow
Apple's iOS and macOS Measured as Bigger Than Windows in the US, Linux-Based OSes at Almost 30%
Expect the silent layoffs at Microsoft to continue at a rapid pace
Oracle, Like Microsoft, Drowns in Debt and Discards Tens of Thousands of Staff (Microsoft Does the Same More Discreetly)
The main difference between Microsoft and Oracle is that the latter is honest about what's going on
Gemini Links 14/09/2026: First Android Phone, Leaving Sony, and Rant About Gemini-to-HTTP Proxy Providers
Links for the day
Links 14/09/2026: "Scam Altman Now Trying to Gain Control of Electric Grid" and Sweden Moving to the Right
Links for the day
Vista 11 Flunked
Microsoft cannot start a "Vista 12" campaign as it would only make matters worse
Microsoft Urgently Needs Distraction: There's No "Next XBox", But There's a New Boot Screen (Like 'Dark Mode', a Feature That Can be Implemented in Mere Minutes/Hours)
Anything to distract from XBox fiasco
IBM Flying Away to Sweatshops (So Will Red Hat)
Even on Sunday people post about 'leaving' IBM
RFID Ambitions Already Established by Widespread Skinnerbox Adoption
A society that cannot maintain privacy for those who deserve it will not manage to assure dignity of citizens
SLAPP Censorship - Part 183 Out of 200: What Actually Happened Two Months Ago (Based on People Who Attended)
It's dangerous to assert what happened in a hearing you did not attend (there was no video stream or recording, either)
Phil Harvey, an Editor-in-Chief in a B2B Site, Explains Why ChannelFutures (Connected to TechTarget) and Other Sites That Used to Cover Linux Deleted Many Articles
Every old article in channelfutures is gone!
Software Freedom Day 2026 is 5 Days From Now, Fresh Reminder to Boycott Proprietary Software
Let this be a timely reminder of why people should avoid proprietary software
Links 14/09/2026: Slop Hardly Used for Actual Work (Chatbots Are for Lonely People), Slop Bots (Scrapers, Plagiarism) "Are Thirsty for Power"
Links for the day
Gemini Links 14/09/2026: Trip, Hiding, and OCR
Links for the day
IBM PIPs Are Layoffs (RAs Come Later Even If You Satisfy the "Performance" and "Plan")
Notice how "the media" almost never mentions silent layoffs, as if just because they're silent, there's nothing to investigate, nothing to see there
Slop Companies Engage in Plagiarising the Web, Now They Pay People to Contaminate the Web With Their Lies
Remember that the lawfare against us is funded by slop salaries!
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, September 13, 2026
IRC logs for Sunday, September 13, 2026
Microsoft is Laying Off All Year Long (It's Just Keeping Quiet About It)
The issue here is also the media. It's complicit.
MElon's Twitter Takeover Was Meant to Amplify People Like Himself or David Heinemeier Hansson (Slop Pyramid Schemes and Bigotry)
Social control media is not neutral
Microsoft Lunduke of 'Linux Sucks' (and Microsoft Corp.) Tries to Replace GNU/Linux With Toxic Discussions About Toxic Politics
Poisoning the well people drink from
General Assembly Covers EPO Strikes on Thursday, September 17th (2026)
The EPO's staff representation at The Hague has asked people to join an upcoming online session about industrial actions
Links 13/09/2026: Republican Campaign Aide Uses Nazi Photo and Convicted Felon is Wielding Power to Stifle Speech
Links for the day
Gemini Links 13/09/2026: Never Settling, Plain Text Digital Life, and Newsgroups
Links for the day
SLAPP Censorship - Part 182 Out of 200: UK Dockets With Machine-Generated Applications to the Court (From American Slop Companies)
Earlier this year Garrett was using machine-generated output as legal papers and submissions
Efforts to Cancel Matt Mullenweg Have Made Us More Sympathetic Towards Mullenweg and More Sceptical of the People Who Run Automattic (Named After Mullenweg)
Mullenweg, unlike Automattic, is not "in it for the money"
Boosters of Omarchy Are No 'Underdogs'
There are many Arch derivatives that do not rely on "viral" marketing in MElon's child porn-pushing social control media and are instead relying on real development, not slop
PIPs Are a Setup: They Set Workers Up to Fail While Working Their Arse Off Before Getting Kicked (Out) in the Arse
Malicious and exploitative
SLAPP Censorship - Part 181 Out of 200: This is Really More Like Brett Wilson LLP v Schestowitz (Using Money From American Slop Companies, Plagiarism Pushers)
We approach the parts where we explain that the Application to the Court with Garrett's name on it was instead complaining about fair criticism of the combative law firm (irrelevant to any injunctions) as if it was impermissible to explain what it had done - and still does - to my wife and I
It Sometimes Feels Like Slop Companies Are Committing Online/Digital Crimes
"GPT" out of control
Gemini Links 13/09/2026: Why Omarchy is "Plain Disgusting" and "AI Slop" and Why "Plain Text To Do List" Rocks
Links for the day
Links 13/09/2026: Scam Altman Admits Issues (Financial), Rival Says Stop Slop (Plagiarism)
Links for the day
Windows Down to New Lows as Switzerland's Federal Government Abandons Microsoft (Where Feasible for Now)
That's how it starts...
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, September 12, 2026
IRC logs for Saturday, September 12, 2026