01.02.09
Posted in Courtroom, Finance, GNU/Linux, Kernel, Microsoft, SCO, UNIX at 10:25 am by Dr. Roy Schestowitz
“…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.
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
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12.12.08
Posted in Finance, Microsoft, NetWare, Novell, SCO, UNIX at 2:12 pm by Dr. Roy Schestowitz
THE release of OpenSUSE 11.1 is less than a week away. While the project is marketed as though it’s independent from Novell (it’s not), the company is in poor shape following bad results (the partners at Microsoft are on the same boat). Here is a curious bit from the news:
“There are companies out there that used a huge chunk of their cash to make acquisitions recently, or they bought back their stock at two or three times its current level. Now that the time is finally right, they can’t do a buyback,” said Mark Murphy, a Piper Jaffray Companies analyst who follows Novell Inc. “They’re looking and saying, ‘Is this Armageddon? Is it the Great Depression, Part II?’ What exactly are they sinking into here? So they’re retrenching when ideally they should be doing the opposite.”
[...]
Novell’s stock buyback program has been a conservative one so far, designed to maintain value for shareholders as the company disburses stock-based compensation to employees, said CFO Dana Russell. But Russell acknowledged the company is feeling pressure from its shareholders to spend the cash it holds. In today’s interest market, cash earns only 1 to 2 percent, he pointed out. “People don’t invest in companies like Novell to get a 1 or 2 percent return,” he said.
Dana Russell is right. Some people invested in Novell only to see half of their money gone. That’s almost -50% ‘return’ to be precise, not “1 or 2 percent return.”
Then, there’s the series of acquisitions (recent example). That would be Novell trying to buy its way out of persistent losses while at the same time buying back its own stock [1, 2] to prevent shares from dropping into oblivion.
Novell is far too dependent on Netware [1, 2] and on Microsoft's mercy/giveaways. It’s very much like SCO with a dying UNIX business and cash infusions from Microsoft. SCO too used to contribute to Linux. █
“…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
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12.09.08
Posted in GNU/Linux, Hardware, Servers, SUN, UNIX at 8:42 am by Dr. Roy Schestowitz
IN the first part of this article we looked at the growth of GNU/Linux in areas which include high-performance computing (supercomputers), mobile phones, desktops, miniature laptops, consoles, and set-top boxes. There is a great deal of overlap between some of these areas, but they are certainly separable.
Herein we look at the growth of GNU/Linux in areas that were not covered before. This ought to demonstrate the tremendous presence which has been quietly gained throughout the year 2007.
Servers
The term “server” is very generic in the sense that covers a broad range of equipment and applications. For E-mail and Web services, for instance, there is a diverse set of systems which are operated so as to connect desktops and devices behind the scenes, so to speak. Application servers exist which blur the gap between the host (server) and the client. Even desktops and laptops can be compared to servers in terms of their function, but let’s try to sub-divide the domains at hand in a sensible fashion and begin with Web servers in particular.
Google is often cited as a major success story and a poster child for GNU/Linux. It is a pioneer capitalizing on disruptive trends as it concentrates on software as a service. In 2007, Google was believed to be using approximately one million GNU/Linux servers around the world, but nobody knows the real number for sure, except Google of course, which consistently keeps those cards close to its chest. Google uses GNU/Linux almost exclusively despite its short experimentation with OpenSolaris quite some time ago (circa 2006).
Other large companies have already chosen GNU/Linux to run various types of servers. Examples include eBay and Amazon for some of their Web services (in-house) and Oracle for its products (clients). They became more vocal about their use of GNU/Linux in the past couple of years. Many others began taking pride in GNU/Linux rather than hide it from the public eye. This trend can be generalized to account for other areas such as devices, which we will touch on in a moment.
The rise of the so-called ‘Web 2.0′ generation rationalized the need for high-capacity servers that are highly reliable and accessible (in terms of availability). Downtime is rarely acceptance when it comes to user-facing services which deliver and receive data almost in real time. Downtime is hardly affordable because it can drive customers away.
With growth in the server market in general and especially with the gradual decline of aging Unixes, GNU/Linux deployments kept rising in quantity. Being free software, however, it was impossible to keep track of the number of installations. Moreover, the number of servers does not say very much because actual server capacity depends a great deal on the available hardware and software which runs on it.
Modern hardware and resource-efficient software require less units to handle the same load. Additionally, there is the emergence of virtualisation to consider here. VMWare is the leading virtualisation company (IPOed in 2007) and it actually started up with GNU/Linux for quicker market penetration. Server virtualisation remains a GNU/Linux advantage where this platform is comfortably ahead of most counterparts. However, ironically enough when it comes to statistics, this also means better distribution and pooling of resources, which results in improved consolidation and therefore a decrease in the number of servers that are needed.
“Another important mistake is to assume that all GNU/Linux servers are sold, as opposed to deployed.”In servers, a great deal of disinformation is being spread to paint a deceiving picture. Despite the fact that not all server units are sold and shipped, GNU/Linux gets counted in this old-fashioned way. Another mistake which is commonly made involves counting only the revenue made through sales of servers, regardless of the number of servers sold. By adhering to such measures, more expensive servers will be viewed as more popular among users, who are always assumed to be buyers, i.e. paying customers. As a measure of popularity or ubiquity, this is incompatible with free software like GNU/Linux.
Another important mistake is to assume that all GNU/Linux servers are sold, as opposed to deployed. As stated earlier, Google is estimated to have approximately one millions servers, but the number remains unknown due to corporate secrecy. Google is able to build and even distribute its own servers, so such server usage can easily go below the radar of industry analysts, whose definitions are strictly controlled by those who commission studies for vanity and marketing purposes. As pointed out earlier, there is also the issue of server capacity. If a Linux server can handle greater loads, then fewer such servers are required to handle the same amount of work.
Let’s quickly look at some numbers from 2007. Market estimates have claimed a growth of 34% annually for GNU/Linux shipments, with strong evidence of growth in Red Hat’s latest financial figures from mid-December. That is commercialized Linux alone; additional figures remain unknown and uncounted. Red Hat is still the leader in the Linux servers market. Looking at Red Hat’s year-to-year growth, the company boasts a rise of 28% in sales, a 24% rise in cash flow, and an improvement measured at 39% for net income. Red Hat’s shares rose 12% after these results were published. These figures, in general, put GNU/Linux ahead of everyone else when it comes to pace of growth.
Towards the end of the year, even the New York Stock Exchange adopted GNU/Linux as a server platform. It also talked about its decision openly in the press and this story served as an excellent sign of validation.
There are many other success stories which could be covered. Consider rendering farms and studios in Hollywood where Linux enjoys a de facto monopoly with virtually all desktops and servers running Linux underneath a proprietary software stack. The application layer often hides an underlying embodiment of openness and freedom, which sits just ‘under the hood’. This is one of the least-covered success stories of GNU/Linux and it truly deserves greater attention.
Mainframes
Another class of servers which can be considered separately is the mainframe. IBM leads the way in the area of mainframes where the use of Linux has become the natural path for most mainframe to follow and evolve along.
Progression is encouraging because IBM recently upgraded the z/VSE mainframe OS to accommodate Linux use in large- and medium-sized businesses. IBM also reported a surge of 390% when it comes to the number of sites running Linux in the mainframe. In fact, Linux is said to be driving a revival of mainframes, some of which have been prematurely buried.
In 2007, mainframes were seeing somewhat of a comeback which was driven by ISV support from many in the Linux arena. System integrators are involved as well and the number of supported applications doubled. Earlier last year, an agreement between Oracle and IBM actually helped strengthen mainframe computing. Both companies are known for their love for — and arguably a dependence on — GNU/Linux.
Cloud Computing
One of the more fascinating trends, whose potential was only realised in the past few years, is cloud computing. Large enterprises, including not just technology companies but anything from banks to healthcare, wish to deploy clouds. Such phenomenal deployments can soon reach as far as governments, according to sources.
“Free software appears to be at the heart of cloud computing with companies like Google already taking a lead too.”Due to some of Red Hat’s new products, which were only introduced a couple of months ago and are geared towards clouds, questions began to arise about their future collaborators. Will it be Amazon or will it be IBM? Red Hat has already set itself a goal which is to maintain presence in over half of the world’s servers by 2015. Free software appears to be at the heart of cloud computing with companies like Google already taking a lead too. There are other lesser-known contenders to consider, such as Xcerion, whose Internet cloud might quietly mature and help the company grow as rapidly as VMWare.
IBM’s Blue Cloud, which is bound to arrive within a few months, will be using BladeCenter servers and run GNU/Linux. It will rely on free software and utilization enhancers such as Xen-based virtualization. On top of it, IBM’s Tivoli is expected to run and manage the cloud, so this might not be a case of free software cloud top-to-bottom.
IBM’s datacenters are slowly evolving into ‘computing clouds’ and the significance of this, which is often underestimated, can be compared to the importance of the company’s embrace of GNU/Linux many years back. This was seen as a big endorsement (never mind the generous investment) at the time. It also helped Linux rid itself from damaging stereotypes.
Devices
In this context, devices would be a large family of mostly embedded software. These tend to be miniature, but they needn’t be. Topology of the different devices is probably a subjective matter.
According to a 2007 survey from VDC, Linux is set to grow 278% in the domain which includes embedded, mobile and real-time applications. Linux is used very quietly in this area. People often use it without being aware of this. The closed nature of many Linux devices contributes to apathy and several companies are too shy to admit their use of Linux due to potential (sometimes known) GPL violations.
According to another survey from 2007, 87% percent of those who built their devices using Linux plan to use Linux in their next project as well. In other words, only few of those with Linux experience are actually looking elsewhere and assess other options. This indicates great satisfaction from a developer’s point-of-view.
“In the year 2007 we saw many media players that run Linux.”Moreover, and further to the study above, the use of free distributions was favoured considerably in comparison with paid distributions. Trends indicate that more and more developers escape the dependency on commercialized distributions. This makes everything more affordable and hence attractive to both developers and prospective users.
In the year 2007 we saw many media players that run Linux. This includes Wizpy, new models of the portable media player from Archos, an iPod competitor from AOL (manufactured in Germany by Haier) and many lesser-known gadgets. There is a vast array of other devices, including networked-attached storage units, home servers, children’s toys and innovative gadgets with well-known examples like the Chumby, which makes a wonderful gift even to grown-up kids like ourselves. An extensive list of such devices is constantly being compiled at LinuxDevices, as well as in a few smaller Web sites. Many of the devices are designed and/or manufactured in the far east, which secures low (and thus highly competitive) costs that lure in less receptive markets.
Linux also gained a high status and earned a place in a large number of industrial components including controllers, automation solutions, meters and monitors. Switches and routers, which arguably fall under the domain of servers as well, have played a role in the growth of GNU/Linux. For example, in 2007 3Com announced that it is betting on Linux and an open strategy. We recently saw a router and switch from Korenix and Vyatta delivers a truly free open source server based on GNU/Linux. It runs free software and adheres to the Red Hat-type business model, which is seen as quite faithful to the ideals of free software.
On the same note, while also considering hybrid devices, it’s worth stressing the importance of and the different roles of Linux in telephony or — more generally — communication . This includes Asterisk and other software that handles VoIP. Towards the end of 2007, Asterisk boasted the millionth download of its software. John ‘maddog’ Hall, a Linux luminary who is also the Executive Director of Linux International, once said that open-source VoIP “will be bigger than Linux.”
Robotics
In a realm where customization is king, it is natural to expect advantages to be found in open systems. The robotics market in 2007 is said to have engendered roughly 10 general-purpose software development frameworks. 9 of these support Linux.
In 2007, Hanson Robotics found that in maintaining a mix of free software and proprietary software in robotics, the ideal ratio is 70% free open source software and only 30% proprietary. In this context, the Linux kernel is expected to play a major part. Linux is dominant in robotics in general. It is not just free open source software that gets chosen for its own separate merits.
Looking Into the Future
The ‘hidden agenda’ in this two-part article — as if there ever was an agenda — was to show that ways in which Linux success is typically measured are deeply flawed.
“Trends are sometimes more meaningful than absolute numbers when it comes to predicting trends.”Computing has a visible and a less visible presence in our lives. People perceive the desktop as very important because it is highly visible to the general population. This can be deceiving. It is important to remember that there is no “year of Linux on the desktop”. If there was, then it’s already behind us and it’s called “the tipping point”.
Any type of real-world usage grows gradually; it doesn’t balloon overnight and clearly not over the course of a single year. Trends are sometimes more meaningful than absolute numbers when it comes to predicting trends. Bearing that in mind, there is no going back as Linux will mature and its usage further expand in many areas.
Let us never be obsessed too much with the desktop. In fact, a desktop might cease to be a primary target by the time that mythical, so-called ‘Linux domination’ is finally reached. Many call this “inevitable” and such sooner-or-later destiny is at times recognized by those who have the most to lose. That inevitability may or may not include the desktop, whose future role is yet unknown. Mobile devices seem to gradually replace the desktop, at least in Japan.
Last but not least, it is important to remind ourselves not to be distracted by any single area of computing, which is one just among many. What sustains growth and fuels development is a market which is broader than local computer stores. As Linus Torvalds said recently, “Linux is much bigger than me.” Linux is also bigger than the desktop .█
Originally published in Datamation in 2007
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11.29.08
Posted in Courtroom, GNU/Linux, Novell, SCO, UNIX at 7:50 am by Dr. Roy Schestowitz
“…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
THERE IS already a selection of early coverages, but for future reference we decided to accumulate a fairly complete set of coverages of SCO’s last stand (potentially). As we show at the very bottom, SCO has not given up yet, but its chances of elevation are slim.
SCO Loses
Caitlyn Martin took over for one column after Ladislav had stepped down to improve and maintain DistroWatch for a while. Hers is the first reference from last Monday:
Novell wins and SCO loses, Linux netbooks hit store shelves
SCO can still appeal the decision. That means that the decision is final for Judge Kimball’s court but it does not necessarily mean the case is over and done with. If there is a next round, it will be in appellate court. According to Groklaw, SCO’s lawyer told a September bankruptcy hearing that an appeal could take anywhere from a year and a half to five years.
A heap of coverages followed the seminal reports from the end of the week beforehand.
[1] SCO v. Novell is Final – For Now
Way back in July, the word rang out that SCO — the arch-villains bent on squeezing every dime they can out of Linux — had been vanquished by the valiant legal team at Novell to the tune of $2.5+ million. Now comes word that the victory is final — or at least, as final as can be expected.
[2] The little SCO that cried wolf
Oh well, too late now. The bankrupt remains of SCO owes Novell $2.55 million for illegally selling Unix intellectual property rights to Sun. SCO could fight on and waste more money. Why anyone would give SCO more money to throw away on its frivolous lawsuits is beyond me, but I guess someone will always believe it when someone cries wolf no matter how many times they do it.
[3] Final Judgement: SCO Owes Novell $2.5 Mln
In what (we hope!) will be the final word on SCO’s dolorous infringement case over Unix, SCO must pay Novell more than $2.54 million…plus interest.
[4] SCO owes Novell $2.54 million for all that trolling
This garbage has been going on since 2003 and finally SCO is getting its final day in court although it’s not getting quite what it bargained for. SCO is currently going bankrupt and can’t pay the amount, but a trust has been set up containing $625,000 which Novell will receive once the company is dismantled.
[5] Kiss SCO Goodbye, Again
To me, the biggest sign that SCO never had much of a case to begin with is how the world simply chose to move on while all this ground its way through the courts. No one I’ve spoken to who uses Linux in a business capacity has cited the SCO case as a reason to be worried about Linux’s future. It simply wasn’t a realistic prospect for them, and now that I look back on it, it never should have been. It was all hot air, and there wasn’t even enough of it to fill a balloon.
[6] SCO ordered to pay Novell $2.5m in Unix royalties (again)
Nearly a decade earlier, Novell sold its Unix trademarks and other assets to SCO, and SCO was quite sure that the deal included the Unix copyrights as well – so sure that it started waving them at the Linux industry, entering licensing agreements with the likes of Sun and suing everyone from IBM to DaimlerChrysler.
[7] Final Judgment: SCO Owes Novell Millions (Plus Interest) (comments on Ars Technica article)
“Federal district judge Dale A. Kimball has handed down the final judgment in the SCO case. The decision dismisses SCO’s latest claims, grants declaratory relief to Novell, and sustains the court’s previous judgment that SCO owes Novell over $2.54 million (plus interest) for unjust enrichment.”
[8] SCO loses big time
It’s finally over. After more than five years of legal wranglings, courtroom antics and FUD, The SCO Group has received a final judgement. In short, SCO owes Novell over $2.54 million (plus interest) for unjust enrichment. Novell is the rightful owner of the UNIX SVRX copyrights. Pretty much everyone in the Linux community expected this, but we’re all glad it has come to an end.
[9] Final judgment: SCO owes Novell millions (plus interest)
SCO managed to use its false claims to extract licensing revenue out of companies that were apparently uninterested in contesting its claims. Novell took SCO’s claims to court and eventually triumphed, which pushed SCO off of the precipice and into bankruptcy.
[10] SCO vs. Linux: case against Novell closed
If, following this verdict, SCO lodges an appeal, it will not be able to renew its claims for breach of contract, copyright infringement and unfair competition, which it had added to the original action for slander, to form a fundamental dispute over the rights to Unix. The final judgement does not affect litigation between SCO and IBM on the subject of Unix source code that may have been copied into Linux, or Red Hat’s complaint of restraint of trade by SCO. It does however affect the Chapter 11 bankruptcy proceedings in which SCO is seeking to reorganise its affairs. Novell is SCO’s major creditor here.
[11] SCO loses Linux legal fight
The long-running saga of SCO versus everyone who ever so much as looked sideways at Linux – but especially Novell and IBM – has drawn to a close with the news that Federal District Judge Dale A. Kimball has dismissed all the company’s claims.
[12] Is the era of open source legal stupidity over?
Some SCO partisans still don’t believe it, and lawyers like to get paid, but at some point in the economic cycle such arguments become an unaffordable luxury and we may well be at that point.
The legal status of open source and Linux now seems clear. The contracts are legal, the software is legit.
[13] Game Over for SCO: Company Ordered to Pay Novell More than $3.4M
Using its mistaken claims of ownership, SCO introduced the SCOSource licensing program and filed lawsuits against companies like IBM, DaimlerChrysler, and AutoZone, among others, for employing unlicensed SCO intellectual property in their Linux deployments.
Kimball’s November 20 ruling orders both SCO and Novell to release SCO’s infringement claims against SVRx licensees, and strikes down SCO’s 2003 amendments to a SVRx deal originally between Novell and Sun Microsystems.
[14] SCO owes Novell: final ruling
This final ruling quashes SCO’s attempts to waive some of the claims in case of any appeal and reiterates his order this July to pay Novell the damages in restitution for Unix royalties SCO collected from Sun Microsystems without Novell’s permission.
The original ruling sent SCO’s fortunes into freefall, as it was first delisted from the Nasdaq, then involved in a failed £100-million (£66.03-million) capital investment injection while trying to sell of the Unix business, and finally file for Chapter 11 bankruptcy late last year.
[15] Global News Update: Monday, November 24, 2008
Another chapter in the lengthy legal saga between SCO and Novell is closed, with the release of a final judgment by a Utah court on Thursday. The judgment largely reiterates earlier orders dismissing copyright-infringement, slander and breach-of-contract claims brought by SCO, but it also prevents SCO from being able to dismiss certain claims and then revive those same claims in potential future appeals. SCO has lost a number of rulings in the ongoing battle with Novell, including a major loss last year when a judge decided that SCO owes Novell for licensing revenues SCO received from Sun Microsystems and Microsoft.
[16] Judgment favors Novell in ongoing SCO case (IDG spread-about; also in [1, 2, 3, 4])
Another chapter in the lengthy legal saga between SCO and Novell is closed, with the release of a final judgment by a Utah court on Thursday.
[17] Novell Wins! Linux Wins! (SCO doesn’t)
Everywhere I read, commentators say the same thing. SCO is dead and buried – they have no chance of raising enough money to take this any further.
[18] Judge issues final judgment in case involving SCO, Novell
The Novell-SCO dispute was an offshoot of another SCO lawsuit, against International Business Machines Corp., filed in 2003. SCO accused IBM of improperly placing proprietary Unix code into Linux, an open-source operating system that competes with Unix.
[19] SCO hit with final ruling
The original ruling sent SCO’s fortunes into freefall. It was first delisted from the Nasdaq, then involved in a failed £100-million capital investment injection while trying to sell of the Unix business. It finally filed for Chapter 11 bankruptcy late last year.
[20] Court finds against SCO in Novel Unix case (also in Yahoo!)
A court in Utah has ruled that SCO will have to pay over $2.5m (£1.62m) in damages to Novell, and has reasserted Novell’s ownership of Unix.
[...]
The judge did, however, leave the way open for SCO to appeal against certain aspects of the case.
The company has reportedly said that it will continue to fight but, as it is in Chapter 11 bankruptcy, and has yet to file a refinancing plan that must be registered by 31 December, funding such action may be problematic.
[21] Bankrupt SCO loses appeal over Novell Unix damages
A court has upheld judgements in the SCO/Novell Unix case, which said Novell owned Unix, not SCO.
SCO, which also claims it owns Linux, is now in Chapter 11 bankruptcy. SCO has already filed an appeal to this “final judgement”.
[22] Ding, dong SCO is dead
The largely unsung hero in all this? Novell. Novell has stuck with the litigation for five years. Thank you, Novell. I may disagree with the company on other issues, but on SCO and other patent trolls we can agree.
Marcel covered this in his show.
Direct link
Novell’s PR Director, Ian Bruce, issued a statement on behalf of Novell.
SCO ruling is more good news
[...]
The judgment restates earlier orders dismissing copyright infringement, slander and breach-of-contract claims brought by SCO, but in addition provides for the dismissal of certain of SCO’s claims without the opportunity for SCO to revive those claims after any appeal.
SCO Appeals
Tom Harvey, who some consider biased in SCO’s favour, was probably the first to cover this:
SCO cleared for appeal in computer code case
The Utah-based SCO Group has been cleared to appeal a court ruling that might lead to a revival of its dispute with IBM over copyright claims to the freely distributed Linux operating system.
Utah Federal Judge Dale A. Kimball has signed a final judgment in a case involving Novell, in which he had awarded Novell $2.5 million for some of the revenues The SCO Group obtained in licensing the Unix computer operating system.
This article was also put in ECT, which some consider to be anti-Linux (particularly following an acquisition of LinuxInsider some years ago).
Additionally, it was covered in:
[23] SCO files for appeal of loss to Novell (also in ITNews)
SCO FILED NOTICE on Tuesday that it will appeal Judge Kimball’s final judgment in its unsuccessful lawsuit against Novell, wherein it tried to claim ownership of the copyrights to UNIX SVRx.
Refusing to admit its resounding defeat in US District Court, SCO hopes to persuade the 10th Circuit US Court of Appeals that it deserved a jury trial in SCO v. Novell. In order to do that, it will have to convince the appellate court that Judge Kimball improperly ruled that: Novell’s counterclaims sought merely equitable relief rather than damages, and that the plain language of SCO’s UNIX SVRx asset purchase agreement with Novell was clear and unambiguous, and therefore that no substantive facts were in dispute between the parties.
[24] SCO Files Notice of Appeal in Novell Litigation – Updated
I was trying to think of a single person involved in any way in this litigation, even peripherally, who hasn’t ended up with his or her reputation slimed by SCO or their supporters. How glad I will be when there is nothing left of SCO but an old blues song!
[25] SCO vs. Novell Continues
Cade Metz reported Monday that the federal judge overseeing the case entered a final judgment that, among other things, reiterated a previous order that SCO owes the Linux distributor more than $2.5 million. But the thing is, SCO doesn’t have the money. The investors that once offered to bail SCO out of bankruptcy backed out of the deal. Metz says the judge may have finally “shoved SCO into the grave.”
There is also a nice cartoon about this whole thing.
Next Steps and Miscellanea
[26] The Appeals Paperwork Begins
The clerk that handles sending on notices of appeals for the US District Court for the District of Utah has sent SCO a letter, letting it know that the notice of appeal has been filed with the US Court of Appeals for the 10th Circuit and providing SCO with instructions, including to download the rules and forms from here. Just read the letter, and you’ll immediately understand what appeals are like.
[27] Top 10 worst chief executives
Shaun Nichols: McBride has no shortage of chutzpah, I’ll grant him that much. Taking on IBM’s legal team for the rights to Linux is a bit like trying to storm Fort Knox with two trained monkeys and a slingshot.
The SCO case did accomplish one good thing, however. It united once disparate groups of Linux advocates in a common cause, and watching the company slowly get the life choked out of it in the courts was poetic justice in the eyes of many.
[28] Minutes from the Bankruptcy Hearing, an Order on 1st Omnibus Objections, and Other Filings – Updated
The SCO bankruptcy plods right along. I predicted that the SCO bankruptcy hearing on SCO’s First Omnibus Objections to Claims would be short, sweet, and simple, and the minutes of the hearing [PDF] indicate that is exactly how it went.
This hopefully proves helpful. █
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11.23.08
Posted in GNU/Linux, Microsoft, Novell, SCO, UNIX at 7:09 am by Dr. Roy Schestowitz
“[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
THE END OF AN ERA SEEMS NEAR AS SCO CASE EXPERTS over at Groklaw continue to track and record the company’s every move, not just in the courtroom. From the latest account:
SCO Files an Amended Schedule F
SCO, or more precisely, SCO Operations has filed an amended Schedule F [PDF], its list of unsecured nonpriority creditors, or in bankruptcy lingo “creditors holding unsecured nonpriority claims”.
[...]
SUSE? I wonder what they owe to them and why.
Then came the preparation for bankruptcy and the ruling.
There is a bankruptcy hearing scheduled for November 20th, and there’s a Notice of Matters Scheduled for Hearing [PDF] just filed that tells us that the issue of the constructive trust has been resolved “in principal” and there will be a stipulation or consensual order filed. Good Golly, Miss Molly. Is Novell finally going to see some of its money from SCO? Has somebody sprinkled fairy dust in the air or something?
Novell will hopefully receive no money because the company continues to just hurt GNU/Linux as a whole. The final judgment soon arrived, claiming Novell victorious.
The final judgment [PDF] from Utah is here at last. It recites what the August 10, 2007 and July 16, 2008 orders said, but it also resolves the recent dispute over SCO’s desire to voluntarily waive some claims and then bring them back to the table after an appeal, should it prove successful. Here’s SCO’s motion to voluntarily dismiss, and Novell’s response, so you can verify that this judgment indeed represents another loss for SCO. You’ll see that it was Novell that suggested the wording regarding SCO’s voluntarily dismissed claims that we see in the judgment, that they be dismissed “without the possibility of renewal following appeal.”
This was also covered by IDG, which cites Groklaw as its primary source.
Another chapter in the lengthy legal saga between SCO and Novell is closed, with the release of a final judgment by a Utah court on Thursday.
[...]
Prior to that ruling, the long-running dispute served as a threat to Linux users who might have feared legal action from SCO. SCO had charged IBM with copyright infringement over the use of Unix, a charge the court essentially said wasn’t valid.
Don’t ever allow the revisionist interpretation that Novell entered this to ‘rescue’ Linux. It was pulled into it by SCO. Either way, Groklaw also believes that SCO is going nowhere fast.
SCO Bankruptcy: SCO Withdraws Motion Re Confidentiality
[...]
Without prejudice. Lovely SCO touch. If a creditors committee is suddenly formed, SCO is ready. Why now? I’m only guessing but probably they are tying off loose ends, because their time to file a reorganization plan is almost up. And despite investors being “so excited about the business prospects of working with SCO” that Stephen Norris mentioned at SCO’s Tec Forum, so far nothing in writing to file with the court, so it does begin to look like the clock may run out first. What a surprise. Look for a December 31st filing. Oh, wait. SCO shuts down for Christmas, I seem to recall, and recovers slowly. They are “officially” closed from December 24th until January 1st, so I’m thinking we might look for something by the 24th, unless SCO’s participation isn’t required to file later.
The funny stories around Norris and some possible connections with Microsoft were previously discussed in [1, 2, 3, 4, 5, 6, 7]. UserFriendly seems to be celebrating already (see image below), but this does not rule out Novell/Microsoft, which play a similar game to SCO', albeit at a patents level (as opposed to copyrights). █
Source: UserFriendly
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11.19.08
Posted in Europe, Law, Microsoft, Security, UNIX, Windows at 9:48 am by Dr. Roy Schestowitz
A few months ago we used the London Stock Exchange (LSE) as an example of hugely costly Microsoft failures. The stock market crashed in the technical sense and Microsoft, along with those who are informed or responsible, dodged questions about the problem, which recurs once in several months. That was about money, but this time around it’s about people’s welfare, health, and even lives.
With roughly 320,000,000 zombie PCs out there, how can any sane person put Windows in mission-critical settings like a hospital? Well, that’s just what some people do. They apparently learned nothing from a hospital near Microsoft Corporation turning into a massive botnet and it’s happening again, this time in London. Yesterday’s reports indicate that 3 hospitals were shut down due to Windows virus infections:
BBC: Computer virus affects hospitals
Three London hospitals have been forced to shut down their entire computer systems for at least 24 hours after being hit by a virus.
The Register: PC virus forces three London hospitals into computer shutdown
Three London Hospitals shut down their computer systems on Tuesday in response to a computer virus infection.
[...]
The infection at Barts and London Trust was reportedly caused by the Mytob worm, which contains built-in spyware functionality. Mytob spreads by email and has the ability to plant backdoor software on compromised Windows PCs.
Database leaks are only natural to expect. This means that any person’s personal information and health record can make its way into a hot BitTorrent within hours. It’s wonderful, is it not?
“This means that any person’s personal information and health record can make its way into a hot BitTorrent within hours.”We have already produced and provided some evidence to show that Windows is insecure by design and probably irreparable. Unless it’s overhauled radically or reimplemented from scratch, it can never benefit from several decades of UNIX doctrine, mostly trials and errors which made a robust, scientifically-backed model.
With Microsoft whistleblowers crying foul about critical failures and then getting sacked, one can’t help wondering how Microsoft perceives liability. Appended below are several fairly recent articles about liability, bad software, dangers in healthcare, and questionable EULAs.
For information about the NHS and Microsoft, see this page (to avoid needlessly repeating old references). █
_____
[1] Experts are calling for product liability for software
“Product liability does not apply to software,” Gerald Spindler of the Faculty of Law of the University of Göttingen complained. “But what if a whole company comes to a standstill due to faulty software?” he mused.
[2] “Microsoft’s 10Q Risk Factors Lists Conceivable Liability for Data Leaks
Improper disclosure of personal data could result in liability and harm our reputation. We store and process significant amounts of personally identifiable information. It is possible that our security controls over personal data, our training of employees and vendors on data security, and other practices we follow may not prevent the improper disclosure of personally identifiable information. Such disclosure could harm our reputation and subject us to liability under laws that protect personal data, resulting in increased costs or loss of revenue. Our software products also enable our customers to store and process personal data. Perceptions that our products do not adequately protect the privacy of personal information could inhibit sales of our products.
[3] Linux guru argues against security liability
Alan Cox, one of the leading Linux kernel developers, has told a House of Lords hearing that neither open- nor closed-source developers should be liable for the security of the code they write.
[4] New banking code cracks down on out-of-date software
The banking industry has re-affirmed a policy that makes online banking customers responsible for losses if they have out of date anti-virus or anti-phishing protection. New Banking Codes for consumers and businesses took effect on Monday.
[5] Secure web browsing through Live Linux distros
Banking isn’t the be-all and end-all: there’s many other reasons you’d want a secure system, separate from what’s on the hard disk, besides Internet banking. Traveller’s can’t necessarily trust the integrity of a computer in an Internet cafe.
[6] Online banking fraud ‘up 8,000%’
The UK has seen an 8,000% increase in fake internet banking scams in the past two years, the government’s financial watchdog has warned.
The Financial Services Authority (FSA) told peers it was “very concerned” about the growth in “phishing”.
[7] Swedish bank hit by ‘biggest ever’ online heist
Haxdoor typically installs keyloggers to record keystrokes, and hides itself using a rootkit. The payload of the .ki variant of the Trojan was activated when users attempted to log in to the Nordea online banking site. According to the bank, users were redirected to a false home page, where they entered important log-in information, including log-in numbers.
[8] Microsoft confirms OneCare zaps Outlook, Outlook Express e-mail
Microsoft Corp. has acknowledged that a bug in its Windows Live OneCare security suite has been causing users’ e-mail to vanish from Outlook and Outlook Express.
[9] In zombies we trust
A little over a year ago, I wrote an editorial where in back-of-the-envelope style (.pdf) I estimated that perhaps 15-30% of all privately owned computers were no longer under the sole control of their owner. In the intervening months, I received a certain amount of hate mail but in those intervening months Vint Cert guessed 20-40%, Microsoft said 2/3rds, and IDC suggested 3/4ths. It is thus a conservative risk position to assume that any random counterparty stands a fair chance of being already compromised.
[10] Your data or your life
As unlikely and alarmist as this sounds, it could really happen. Intracare is the publisher of a popular practice management system called Dr. Notes. When some doctors balked at a drastic increase in their annual software lease, they were cut off from accessing their own patients? information.
This situation is completely unconscionable. There can be no truly open doctor-patient relationship when an unrelated third party is the de facto owner of and gatekeeper to all related data.
[11] Use Health Vault, Lose Your Rights
Microsoft has announced (NY Times Article) Health Vault. What should have followed here is a review of the service by my actually trying it.
[...]
Heard enough? So had I. I’m absolutely going to pass on Health Vault. In addition to looking like the Microsoft Passport debacle redux, this is a very one-sided contract. They can harm you but you cannot harm them. There is no way for any 3rd party to verify that their privacy and security software works.
[12] Microsoft Healthvault Patient Safety in Question
One topic I’ve not seen addressed is the safety and effectiveness of the data within HV – and I don’t mean “safety” as in the data is secure from unauthorized access or misuse. I mean “safety” as in the utilization of data stored in HV by other applications won’t result in an unsatisfactory patient outcome, you know, like death or injury.
[13] HealthVault: No Commitments and a Sleeping Watchdog.
Has Microsoft committed to keeping the promises that it has already made? No, just the opposite. Their privacy policy concludes:“We may occasionally update this privacy statement”
Which means that when the commitments that Microsoft has made regarding HealthVault become inconvenient, they will simply change them.
[14] HealthVault: Failing the seven generations test
…My mother died of ovarian cancer. My grandmother took a drug while my mother was in utero that increase the chances that my mother would get ovarian cancer. Any consideration given to my mothers genetic propensity to get cancer must take into account this environmental influence…My grandmothers medical record will remain relevant for at least five generations…How long should we be keeping our electronic medical records? We should ensure that they are available for the next seven generations…A private, for-profit, corporation is an inappropriate storehouse for records that the next seven generations will need. Corporations do not last long enough. Consider the Dow Jones Industrial Average, of the original 12 companies that made up the index, only one is still listed…
[...]
But this is still Microsoft we are talking about, which all things being equal, is especially bad. Microsoft has a history of abusing standards, and using those abuses to enable and extend its monopolies. In short they have a history of “being evil” in exactly the sort of way that we cannot afford to have impact our healthcare records.
[15] Bill Gates: Vista is so secure it could run life support systems
While on a visit in Romania, where Bill Gates participated in the celebration of 10 years since the Microsoft branch has been running there, and the launch of Vista, Microsoft?s president declared that, with the right ammount of administration, the new Vista could run life support systems in hospitals.
[16] Do Microsoft’s EULAs have any real legal basis?
“Microsoft has no special exemption from the sale of goods act.” Well, no, probably not – but it might still be selling you “services” instead of “goods”. But the real point to remember is that it doesn’t matter a jot what the “logical” position is, it is what the courts decide that matters.
As far as I know, no one has tested Microsoft’s EULAs in a UK court and, until someone does, Microsoft will just go on assuming that they work. And I don’t fancy the risk of taking on Microsoft’s expensive lawyers in court myself…
[17] EULA La Vista, Baby
Well, I’ve taken a good look at the license agreement — I had insomnia — and I’ve discovered some clauses that will freeze your blood, curl your hair, and do your nails.
[18] Vista’s EULA Product Activation Worries
Mark Rasch looks at the license agreement for Windows Vista and how its product activation component, which can disable operation of the computer, may be like walking on thin ice.
[...]
“Does the Microsoft EULA adequately tell you what will happen if you don’t activate the product or if you can’t establish that it is genuine? Well, not exactly. It does tell you that some parts of the product won’t work – but it also ambiguously says that the product itself won’t work. Moreover, it allows Microsoft, through fine print in a generally unread and non negotiable agreement, to create an opportunity for economic extortion.”
[19] MSN Music Debacle Highlights EULA Dangers
MSN Music’s EULA is a case in point. When active, MSN Music’s webpage touted that customers could “choose their device and know its going to work”.
But when customers went to purchase songs, they were shown legalese that stated the download service and the content provided were sold without warrantee. In other words, Microsoft doesn’t promise you that the service or the music will work, or that you will always have access to music you bought. The flashy advertising promised your music, your way, but the fine print said, our way or the highway.
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11.08.08
Posted in Courtroom, GNU/Linux, Novell, SCO, UNIX at 12:15 pm by Dr. Roy Schestowitz
“We do the UNIX, you do the lawsuits…”
Remember attempts to rename Office Open XML just “Open XML” (ISO participated in these attempts)? Or call the embattled Longhorn just “Vista”? Or do another iteration of Vista, then calling it “Windows 7″? Well, it's always about the name.
According to Groklaw, SCO might be trying to dodge into another trademark where it suffers none of the same poor reputation. It’s almost like a shell game that follows mysterious funneling (or channeling) of funds, not to mention the ongoing flirt with Sugar Daddies. Here is the seminal analysis.
We need to take a quick break from the Bilski series because there are a number of filings in the SCO bankruptcy, including a notation in one filing that seems to indicate that SCO is considering resurrecting the name Caldera International.
Anonymous writes: “They’re going to market a new Linux distro unified with UNIX! They could call it, hmm… Caldera Linux!”
Sarcasm considered, check out caldera.eu and the “RIP” line. Does that stand for “rest in peace”? Or “Recovery is Possible”?
This attempted resurrection — if true– got Sean’s attention.
SCO – the company best known in the Linux community for its legal challenges could be dipping into its own intellectual property well to bring back a name from the past.
OStatic wrote about this also.
Apart from this, nothing really stood out in the Novell/SCO case. Here are the remaining articles about this lawsuit (only from Groklaw):
1. SCO’s Statement on Final Judgment & the Melaugh-Gonzalez Emails
SCO has filed a Statement Regarding Entry of Final Judgment [PDF], responding to Novell’s Response to SCO’s Notice of Voluntary Dismissal , which asked the court to confirm the amount of the constructive trust the parties have agreed to and to make SCO pay it now, which in turn followed SCO’s Notice of Voluntary Dismissal.
It’s breathtaking to me. SCO actually argues, quoting selectively from the trial order’s wording, that while one clause of the 2003 Sun agreement was not authorized, the rest of the agreement was, and in fact in the judge’s “nuanced” trial order, that’s what he meant, that SCO was authorized to enter into the agreement except for that one itsy bitsy part. Just excise that one clause, and what do you get? An *authorized* agreement. What? Don’t hyperventilate. SCO does this.
2. Novell Responds to SCO’s Notice of Voluntary Dismissal/Final Judgment Language
Novell has filed its Response to SCO’s Notice of Voluntary Dismissal. It’s ascerbic and funny as can be. It shows the court each and every tricky bit it thinks SCO might just be angling for.
I saw in the email exchange between the SCO and Novell attorneys that were attached to the David Melaugh Declaration that SCO has stepped on Novell’s last nerve with its trickiness. And here we see the result. Novell points out each and every conceivable thing SCO might be trying for, leaving nothing for SCO to try later.
3. SCO v Linux: Novell demands payment of withheld income
In the legal battle between Novell and the SCO Group over SCO’s claims concerning ideas and concepts in Linux and Unix, Novell is demanding that the SCO Group immediately transfer to it a payment of $625,486.90. The Groklaw site has published the motion by Novell on which the relevant bankruptcy court now has to decide; SCO is operating under Chapter 11 of the American bankruptcy laws
Why is this battle not over yet? And when will the press report the truth, if ever? █
“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
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10.01.08
Posted in GNU/Linux, Microsoft, Novell, UNIX at 6:32 pm by Dr. Roy Schestowitz
We have already shown that Novell supports ActiveX, Windows Vista, Internet Explorer, .NET, and even XAML. Earlier on we thought we had found Novell blocking Firefox as well, but it turned out that pop-ups, Flash-only content and JavaScript were to blame (i.e. poor design decisions). Details will appear in tomorrow’s IRC log.
Either way, later on today it turned out that Novell only advertises migrations from UNIX to Linux. As the site states: “Move it: the time to migrate is now [...] rock solid reliability at a lower TCO than UNIX.” Further it says: “Take the TCO Challenge: Learn how SUSE, Linux Enterprise Server delivers UNIX reliability for up to 75% less.”
“No TCO costs comparing SuSE to Vista,” says our reader Doug. It’s as true as it gets — going to Novell’s solutions page, one finds:
SUSE Linux Enterprise
* UNIX to Linux Migration
* Virtualization
* Desktop Linux
* Real Time Linux
* Linux for Mainframes
* Linux and Windows Interoperability
Novell harmonises with Windows rather than compete against it. This might also explain the GNU/Linux deemphasis, especially on the desktop. As we wrote last month, Novell must keep the Beast happy. Novell’s survival might depend on it. █
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