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

If You Value Privacy, Follow the Likes of Eben Moglen, Phil Zimmermann, and Richard Stallman, Not Back Doors' Boosters Who Mislabel Themselves as Security Experts
Signal is not really secure
Writer's Block is Not a Problem to Us, Only a Lack of Time
Or timewasting by aggressive militants who try to silence us [...] People who experience writer's block very often find it depressing (it feels unproductive) and sometimes come to the conclusion that perhaps writing isn't for them
March Plans for Techrights
next month we plan to start the series about how the SRA failed
 
Links 26/02/2026: "Peak Mental Sharpness" and "The Whole Economy Pays the Amazon Tax"
Links for the day
"Community" Site Deleted by Jeffrey Epstein-Connected 'Linux' Foundation Had Interview Where Eben Moglen Spoke of GPLv3 and of DRM, Back Doors Etc.
Deleting what happened or what was said two decades ago
Richard Stallman (Free Software Foundation) and Eben Moglen (Columbia Law School) Explained 25 Years Ago That Proprietary Software (and Proprietary Firmware) Would Lead to Back Doors
a fortnight after the 9/11 terror attacks in the US
Giving to the Community Versus Taking From the Community (or Worse, Attacking the Community)
some people bring no contributions, only harm
LLM Slop Will Try to 'Rewrite' History of UNIX and GNU/Linux
We occasionally see slopfarms spreading misinformation about UNIX, GNU, and Linux
Where Does the Solicitors Regulation Authority (SRA) Stand on Machine-Generated Legal Documents and Copy-pasting One Client's Lawsuit to Start Another (for American Serial Strangler)?
Now that many law firms cheat (copypasta, paper DOoS, LLM slop, breaches of rules, even defaming the other side) the SRA cannot keep up
Of Course Android is Not Free Software
That Android is not about freedom should not be so shocking
Talking About Blackboxes
Having just reposted a couple of articles from Alex Oliva
Microsoft Slop is Already Killing XBox
Microsoft will fail at alleviating such concerns
Two Weeks Have Passed and It Looks Like Conde Nast's Ars Sloppica Sacked "Senior" "AI" "Reporter" Benj Edwards But Did Not Remove All His LLM-Produced 'Articles'
the editorial standards at Conde Nast's Ars Sloppica are a joke
Alex Oliva (GNU Linux-Libre): Stricter is Less Popular
Reprinted with permission from Alex Oliva
Fraud and Crimes at Microsoft
A lot of these American companies simply cheat and even bribe
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Wednesday, February 25, 2026
IRC logs for Wednesday, February 25, 2026
FSF's Alex Oliva on Hardware Black Boxes
Reprinted with permission from Alex Oliva
What Microsoft Hides Underneath
In recent years a lot of this shell game was played via "Open" "AI" [sic]
A Lot of Slopfarms Died, Google News Feeds the Few Which Survived and Still Target "Linux"
Many just simply died
Links 25/02/2026: Fifth Year of War in Ukraine, Dihydroxyacetone Man Looking to Start More Wars
Links for the day
Gemini Links 25/02/2026: Retired a Year, Illness, Losing a Lung, and "Back to Gemini"
Links for the day
The Register MS Published a Ponzi Scheme-Boosting Fake Article This Morning. It Mentions "AI" 30 Times.
Will credibility be left after the bubble pops entirely?
They Try to Ruin Linux, Too ("Attestation" in GNU/Linux)
In the context of Web browsers, this isn't unprecedented and we wrote a lot about it
Mozzarella Company: All Our Cheese Comes With Mold Now, But You Can Ask the Seller to Remove the Mold
If you reject and oppose slop, do not download/use Firefox
Stallman Was Right About Back Doors
I had some conversations with Dr. Stallman about security and back doors
Australian Signals Directorate ex-employee sold back doors to Russia
Reprinted with permission from Daniel Pocock
IBM Debt-Loading and Liability (Toxic Asset) Offloading
One can hope that IBM will be subjected to the same attention Kyndryl received, but this boils down to politics
Links 25/02/2026: 'Hybrid Warfare' and "Boycott the State of the Union"
Links for the day
IBM (and Red Hat) Can Disappear in the Coming Years, Along With Kyndryl (Debt Twice as Big as Its 'Worth')
No wonder Red Hat workers tell us they hate IBM
Software Freedom is Science, But It Also Sustains Life
In some sense, Software Freedom can be explained in the context of nourishing people
“Xbox, like a lot of businesses that aren’t the core AI business, is being sunsetted."
There has been a lot of narrative control lately, including at 9PM on a Friday
3,300 Capsules Known to Lupa and Currently Accessible
Gemini Protocol turns 7 this summer
When it Comes to Firmware, the FSF and Its Founder RMS Won the Argument (But Not the Fight, Yet)
The "whataboutism" tactics are physiological manipulation means of discouraging those who move in the correct direction
Austria Tackles Digital Weapon Disguised as "Social" and/or "Media"
Are we seeing the end days of Social Control Media?
Nothing Over the Horizon for XBox
XBox is not even being sold in many places anymore
Solicitors Regulation Authority (SRA) Contradicting Itself: You Can Use Slop to Cheat Clients, But You Can Also Face Disciplinary Actions Over Slop
Where does the SRA stand on the matter?
In Praise of Eben Moglen
Hopefully Professor Moglen will be with us for many decades to come and become an active speaker on issues such as Software Freedom
Sunsetting IBM (for the Benefit of Few Corrupt Officials and Wall Street Speculators)
IBM will not (and cannot) survive for much longer [...] The issue is bad leadership, not any particular nationality/race
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Tuesday, February 24, 2026
IRC logs for Tuesday, February 24, 2026
Gemini Links 25/02/2026: Rise of Solar in 2025 and Smallnet Protocols
Links for the day
HR Blunder at IBM or IBM Struggling With Money?
Weird for such an allegedly rich company to be so stingy
Gemini Links 24/02/2026: x86 Computer In-Browser and Administration
Links for the day
Envy is the #1 Enemy of Richard Stallman
Whenever you see someone mocking Richard Stallman, ask yourself: does this person have a reason to be jealous of Richard Stallman?
Life is Sweeter When Less Means More
People need to think "small", not "big" (as in capital)
Championing a Cause
Probably over 100 million GNU/Linux users on laptops/desktops
Balmoral rape cult & Debian suicide cluster indifference, community
Reprinted with permission from Daniel Pocock
Father of XBox Says What Microsoft Does Not Want to Hear About XBox (They All Know It's Dead)
Microsoft just worried shareholders will find out Sharma is "just a face" and an undertaker
Can Much Longer Can the Financial 'Press' (Pump-n-Dump Megaphone) Cheer for IBM's Accounting Enigma?
IBM has fallen almost 25%
France Needs to Focus on Software Freedom, Not Flags
We need more SIP advocacy!
Combatting Censorship in the "Civilised World": The Media Blackout Surrounding EPO Strikes and Other Large-Scale Actions
We - collectively speaking - cannot afford to keep the Office in the hands of a "Mafia"
Religious or Not, Consider Quitting Social Control Networks (All of Them) This Season
Lent is a good time to quit addiction such as social control media
EPO Strike Actions and Other Industrial Actions Are Effective When Management Fears the Staff and Staff No Longer Fears Any Managers
'António the unready' should get ready to be ousted
Liberating the Self From the Invisible Prison of Plutocrats-Controlled Media and Social Control Media
Can you always see the full picture or does something (someone powerful) obstruct it?
Links 24/02/2026: Drug Cartel Decapitated, Jeffrey Epstein-Connected 'Linux' Foundation Promotes Slop and Buzzwords at MWC Barcelona 2026
Links for the day
2023: Layoffs Are Because of "AI". 2024: Shares Up Owing to "AI". 2025: Shares Recently Fell Due to "AI". 2026 Forbes (Paid by IBM): Shares Falling is Good!
"AI" is smoke and mirrors
Bitcoin: Code of Conduct stifled open source concerns
Reprinted with permission from Daniel Pocock
Slop Boosters and 'Hype Agents' Render Themselves Irrelevant and the General Public Becomes Incredulous Due to "Bros Who Cry Wolf!"
It won't age well
"Half-baked Vibe Code Shipped Full of Errors"
Seems timely after our latest article
IBM Did Not Fall Because of COBOL Vapourware, IBM Still Collapses Because It's Worthless, Way Overvalued, and Very Likely Cooks the Books
language-to-language conversion (in the context of programming) is nothing new
Links 24/02/2026: Copyright Litigation Over Anne Frank’s Diary, "Arrogance of Developers"
Links for the day
Another New Low for Solicitors Regulation Authority (SRA): Authorising Slop Disguised as "Legal Advice"
SRA is a lapdog - not a watchdog - of the "litigation industry"
EPO "Cocaine Communication Manager" - Part IV - "Many Jobs Were Given to Spanish Employees for No Related Skills At All"
The EPO's fate might be similar to that of the XBox
Gemini Links 24/02/2026: Hardware Tinkering and Slop Bots Attacking the "Small Web"
Links for the day
Quitting Reddit (Social Control Media Controlled by Conde Nast)
There is a new post in Reddit
IBM is the World Champion at Layoffs and There Are Reportedly More Layoffs in IBM This Month (EU)
IBM fired 60,000 in 1993
Free Software is for Everyone
Young and old, rich and poor etc.
Gemini Links 24/02/2026: Voltage Divider on Slide Rule and Many Raspberry Pi Projects
Links for the day
Links 24/02/2026: Telephone Turns 150, Political News Catchup, and Rearmament
Links for the day
Asha Sharma "a Palliative Care Doctor Who Slides Xbox Gently Into the Night"
2026 will probably be the last year of XBox
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Monday, February 23, 2026
IRC logs for Monday, February 23, 2026