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

Former Debian Project Leader Branden Robinson Cautions Against Cover-up and Censorship in Debian
Debian drama. Again.
It's Friday Again and Many People Leave IBM for Good (IBM Should be Reported for Illegal NDAs That Hide Layoffs)
we very seldom see anyone deviating a lot from the "template-like" narrative, let alone mentioning "layoffs" or "RA" or some other term that implies non-consensual departure
What Do People Ever Buy From Microsoft Anyway (Not PCs)?
Microsoft sells two things these days: 1) vapourware/promises. 2) its stock.
Gemini Links 20/02/2026: "Mainstream Unix, Underground Unix", Slop Staging DDoS Attacks Against Small Sites
Links for the day
IBM Inclusivity: Red Hat Summit is for Rich Sponsors Like Microsoft and Rich Guests Who Pay $500 a Day
Nothing signals societal tolerance more than paying a large military contractor
 
Like a Shell
Overreactions can backfire
Not Only Leaders of XBox Got Sacked (Layoffs)
Phil Spencer and Sarah Bond got laid off
9PM on a Friday Night: Microsoft Says the Layoffs Are Not Layoffs
We've said for a long time that XBox is doomed this year
Gemini Links 20/02/2026: Misfin Server and Magic in Programming
Links for the day
analytics.usa.gov Reckons Windows "Market Share" Fell to Just 38%, Vista 11 Not Even a Third of Windows Users
This coming summer Vista 11 turns 5
The New Digg.com is Slop
Slop "summaries" and Serial Sloppers are drowning out the site with fake 'articles' (plagiarism)
Linus Torvalds: Bill Epsteingate Good Enough for Me to Wine and Dine With
Torvalds is more connected to Jeffrey Epstein than Richard Stallman ever was
Our Uptimes Are Always Better Than Any Site That Uses Clownflare
Clownflare as a company operates like a cult
GNU/Linux Apparently Rose to 6% in Uzbekistan
If accurate, this represents a new problem for Microsoft and a big win for Software Freedom
Sponsored Videos and 'Articles' in The Register MS, Stenography as a Service/Product
They should more accurately label these actors
The Little Clique of Sloppers/Spammers About "Linux" Got Even Smaller
Thankfully there are still genuine and legit GNU/Linux sites out there
Links 20/02/2026: Microsoft Intentionally Kills Older Hardware, "The Story of XBox" Shows How Defective Microsoft Hardware Really Was
Links for the day
Turkmenistan One of Many Countries Where Microsoft Fell to Distant Third in Search
We expect many layoffs in Bing some time soon
Don't Wait for "Red Hat Layoffs" Because After Bluewashing They're IBM RAs and Don't Wait for "IBM Layoffs" Because They're Perpetual
IBM layoffs are silent and "forever" (small trickle that never ends and is widespread - after all IBM is a very global and ubiquitous firm)
Links 20/02/2026: Standards, Science, and Politics
Links for the day
GNU/Linux Adoption is Higher in Richer Countries
Is it because freedom is actually expensive - something that only privileged people can pursue?
Links 20/02/2026: Windows TCO Versus Deutsche Bahn, Europe Seeks More Independent Digital Future
Links for the day
IBM, Red Hat and Fedora: Don't Say "Master", It Offends People. Also IBM, Red Hat and Fedora: "Master Podman".
The hypocrisy at Red Hat and Fedora shows no boundaries
IBM Layoffs Aren't Just in IBM 'Proper'
Who is still using Lotus after the HCL move?
The Register MS Gets Paid by Gartner to Promote a Ponzi Scheme for Gartner, Microsoft, and Others
The credibility of that site will suffer because it tries to sell a major scam to its audience
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, February 19, 2026
IRC logs for Thursday, February 19, 2026
Gemini Links 19/02/2026: "Towards a Gemini Famicom Resource" and Dumping Microsoft
Links for the day
IBM Behaves Like a Company Looking for Loose Change Between Sofa Cushions
Chasing laid-off workers for dollars and even pennies, making excuses and devising loopholes (such as PIPs) to flout severance obligations
Microsoft Found Another Bailout Opportunity: Killing People
Good thing that Nadella is not racist!
No "Smart Mobs" (Social Control Media) in BRIC?
It looks like the "Social" "Media" sites tracked by statCounter see little from (or of) BRIC, and moreover it is declining fast
The Few Slopfarms We Saw Today
The sentiment has changed a lot
Links 19/02/2026: Protecting Framework Laptop 13, Hardware Drive Shortages
Links for the day
In Africa's Second-Largest Nation, Democratic Republic of the Congo (DRC), Opera 10 Times Bigger Than Firefox (and GNU/Linux Now at 5%)
This will become an accessibility problem
Links 19/02/2026: "A.I.pocalypse" Inevitable and "Butlers to LLMs"
Links for the day
An Inherently Royal (Monarchs') Legal System Where Size Matters (Big Capital Eats the Small)
This reinforces the notion that justice is only for those who can afford it
These Statistics Should Keep Microsoft Shareholders Awake at Night
Windows is, in general (all versions collectively), declining over time
Economic Failure and Other Harsh Realities Have Nothing to Do With Slop 'Innovation'
Advanced propaganda, not advanced 'AI' [...] They attack workers while insulting their intelligence
Spaniards Shutting Down MElon's Digital Weapon of "Smart Mobs"
Are the Spanish people already acting based on gut feeling and shunning/shutting out the provocation vector?
Bitcoin: government engagement contradictions
Reprinted with permission from Daniel Pocock
Richard Stallman in the United States - Part II - "Haters Gonna Hate"
we shall carry on with this series at the right pace
Typical! Solicitors Regulation Authority (SRA) Tells Victims of Fraud to Wait 10 Weeks
justice delayed is justice denied
EPO Union Leaders in Rijswijk Explain Where EPO Strikes Stand and How to Prepare for Next Week's
We have some revelations to share in a few days
statCounter: Only One in 350 Iranians Would Use Microsoft for Web Search
Microsoft is trying to fake "demand"
Slides Shown a Week Ago by the EPO's Staff Committee Ahead of the Second Very Large Strike
This coming weekend we'll drop a 'bombshell' of sorts
EPO "Cocaine Communication Manager" - Part II - Illegal Drug Addicts Mobbing the Wrong People, This Will Definitely Backfire
This year may well be the last year of Team Campinos. Nobody will hire them after that.
Mass Layoffs (But Silent Layoffs) Still Happening in IBM, You Need Only Look Closely (There Are NDAs, PIPs, 'Early Retirement' Sweeteners and IBM - Like Microsoft - Skirts the WARN Act)
the layoffs are definitely happening
Microsoft's "AI CEO" (Slop Propagandist) is Projecting, Many Microsoft "Jobs to be Replaced With All-Indian Low-Paid Staff in 12 Months"
Windows is perishing
Very Little Slop
We are not finding much slop anymore
Links 19/02/2026: Illegal Kangaroo Court for Patents Attracts Aggressive Firms, Public Domain Review Grows
Links for the day
Gemini Links 19/02/2026: Taxing the Rich, Raspberry Pi 4 Tinkering
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, February 18, 2026
IRC logs for Wednesday, February 18, 2026
Links 18/02/2026: DMCA Weakened, Anna’s Archive Still Thriving
Links for the day
Links 18/02/2026: Gig 'Economy' Condemned, Microsoft Insulting/Stressing People With False Slop Predictions
Links for the day
Twitter Falling to 1% in Africa's Largest Nation (Algeria)
About 15 years ago the regime in Egypt got toppled (and others had been too) partly because of social control media such as Twitter
"How Many Friends Do You Have?"
"Do bots count?" "Friends in Facebook?" "Does a girlfriend chatbot count as a friend?"
Solicitors Regulation Authority (SRA) Responds to Crises Only After It's Way Too Late
The SRA does not do its job. The new chief's job is face-saving PR in the media.
The Techrights Team Makes the Platform Faster
The infrastructure is already fast
Mozilla Firefox Died in Afghanistan
Mozilla has been a complete disaster
Gemini Links 18/02/2026: Astronomy and Texinfo
Links for the day
Are IBM CEO and IBM CFO Ready for Financial Audit That Topples the Shares by 50% in One Day?
The same "chefs" that cooked up Kyndryl Holdings Inc are still in charge of the IBM kitchen
France Does Not Need Digital Weapons Disguised as Social and as Media
French people lost interest in Social Control 'Media' (or Networks)
"Senior AI Reporter" at Slop Technica/Ars Sloppica Has Written Nothing in Nearly a Week, Did Conde Nast Suspend Him for Fake Articles With Fake Quotes?
Slop Technica/Ars Sloppica is having a serious credibility issue right now
Linux Foundation Puts Slop Images, Not Just Slop Text, in Linux.com
More of the same then
The Register MS Paid-for 'Articles' (Ads) Seem to be LLM Slop Again
If it's true that The Register MS is resorting to these marketing tactics, will they later delete the evidence (as they did months ago)?
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, February 17, 2026
IRC logs for Tuesday, February 17, 2026