01.02.09

Linux Scrutiny Awakens an Interesting Science of Battling by Proxy

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.

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

Share in other sites/networks: These icons link to social bookmarking sites where readers can share and discover new web pages.
  • Reddit
  • email

This post is also available in Gemini over at:

gemini://gemini.techrights.org/2009/01/02/battling-by-proxy-sco/

If you liked this post, consider subscribing to the RSS feed or join us now at the IRC channels.

Pages that cross-reference this one

2 Comments

  1. The Mad Hatter said,

    January 3, 2009 at 11:33 am

    Gravatar

    But it’s such a good investment . Ask Darl.

    Seriously though, if it was possible to read minds, and prove what you’d read, I’d bet that any mind readers who approached Bill Gates or Darl McBride would somehow be accidentally shot to death.

  2. Roy Schestowitz said,

    January 3, 2009 at 11:45 am

    Gravatar

    Gates claims he doesn’t know BayStar, but he lies a lot.

What Else is New


  1. Links 18/6/2021: Mir 2.4, ActivityWatch 0.11, Microsoft Breaks Its Own Repos

    Links for the day



  2. [Meme] When the 'Court' Drops

    As the EPO sneakily outsourced courts to American companies and parties in dispute depend on their ISP for “access to justice” there’s a catastrophic impact on the very concept of justice or the right to be heard (sometimes you don’t hear anything and/or cannot be heard)



  3. The EPO's Virtual Injustice and Virtual ('News') Media

    A discussion of this morning's post (part 10 in a series) about the shallow media/blog coverage that followed or accompanied last month's notorious EPO hearing



  4. Links 18/6/2021: LibreOffice 7.2 Beta, Elementary OS 6.0 Beta 2, and Linux Mint 20.2 “Uma” Beta

    Links for the day



  5. The Self-Hosting Song

    Cautionary tales about outsourcing one's systems to companies that could not care less about anyone but themselves



  6. IRC Proceedings: Thursday, June 17, 2021

    IRC logs for Thursday, June 17, 2021



  7. [Meme] Swedish Justice

    The EPO‘s patent tribunals have been mostly symbolic under the Benoît Battistelli and António Campinos regimes; giving them back their autonomy (and removing those who help Battistelli and Campinos attack their autonomy) is the only way to go now



  8. Virtual Injustice -- Part 10: Vapid and Superficial Coverage in the 'IP' Blogosphere

    The media has come under attack by Benoît Battistelli; during the term of António Campinos most of the media critical of the EPO has mostly vanished already; so one needs to look carefully at comments and social control media



  9. Links 18/6/2021: RasPad 3 and Pushing Rust Into the Linux Kernel

    Links for the day



  10. Heli Pihlajamaa Promoting Software Patents to Patent Maximalists

    "Ms Pyjamas" from the EPO is promoting illegal software patents to a bunch of patent zealots (CIPA)



  11. The Lying by Team UPC, Led Again by Kevin Mooney

    Team UPC, or specifically Mr. Mooney, lies to the public about the prospects of the UPC; similarly, EPO and EU officials keep bringing up false claims about the UPC, so while the UPC itself has likely died for good the lies have not



  12. Links 17/6/2021: Cutelyst 3 and Lenovo Move Towards ThinkPad BIOS Configuration From Within Linux

    Links for the day



  13. Too Much Noise and/or Distraction and General Loss of Focus (on the Real and Urgent Issues, Such as the Ongoing Anti-FSF 'Coup')

    The media is full of Microsoft fluff and technical blog posts still focus on the Freenode fiasco, among other things that don't matter all that much; but we certainly need to talk about steps undertaken to undermine the FSF's power because long-term ramifications may be huge



  14. [Meme] The Enlarged Bored People With Presidential Decrees

    The laughable state of the EPO‘s EBA (or EBoA) is rarely commented on anymore, not even in so-called ‘IP’ blogs; maybe they’re just so eager to see patents on everything, even European software patents, so tyrants who destroy the courts (with UPC lobbying and removal of EBA independence) don’t bother them so much anymore



  15. Response to Misinformation From EPO Officials

    Opponents of European software patents are clearly being mischaracterised by EPO officials, who also use meaningless buzzwords to promote such patents; as an aside or footnote that relates to our ongoing series we’re making this quick video, which is days late



  16. [Meme] Tilting the Scales for Software Patents

    Shovelling up lots of patents, even worthless patents such as software patents, dooms the EPO (EPC violations, lawlessness), dooms European professionals, but the wrong people have been put in charge and courts are being intimidated by them



  17. Virtual Injustice -- Part 9: Heli, the EPO's Nordic Ice-Queen

    Team Campinos is full of people who instead of grasping and working to promote innovation are boosting the agenda of litigation (scientists are not being employed)



  18. IRC Proceedings: Wednesday, June 16, 2021

    IRC logs for Wednesday, June 16, 2021



  19. Links 17/6/2021: elementary OS 6 Beta 2 and JingPad Linux Tablet Crowdfunding

    Links for the day



  20. Techrights Statement on IRC

    Freenode needs to explain what the hell happened this week and why communities that make up the network weren't informed or consulted



  21. IRC Proceedings: Tuesday, June 15, 2021

    IRC logs for Tuesday, June 15, 2021



  22. Virtual Injustice -- Part 8: A Well-Connected 'IP' Maximalist

    The EPO‘s lobbying for European software patents goes all the way to the top, including António Campinos and his circle



  23. Links 16/6/2021: Alpine 3.14.0 and DXVK 1.9

    Links for the day



  24. Links 15/6/2021: Debian Installer Bullseye RC 2 and Zink Updates

    Links for the day



  25. IRC Proceedings: Monday, June 14, 2021

    IRC logs for Monday, June 14, 2021



  26. Virtual Injustice -- Part 7: Musical Chairs and Revolving Doors

    Cross pollination in Alicante and Munich serves to show that people aren't picked for their skills and experience; it's like a private club or a clique



  27. Hardly Shocking and Not At All Surprising That Thugs Who Run the EPO Hired External Thugs to Help Them Oppress Aggrieved Staff

    With the EPO's management flooding the bank accounts of aggressive law firms (at our expense) we need to ask serious questions about how such a "Mafia" (what EPO staff calls the management) managed to metastasise inside Europe's second-largest institution and how to remove this "Mafia" as soon as possible (some arrests too are well overdue)



  28. [Meme] There Are No Elections in Mafia-Type Regimes; It's About Family and Friends...

    With no real concept or notion of "elections" (the so-called 'mafia' members choose their successors and colleagues) the EPO's patent examiners clearly need outside intervention, e.g. inquest by the EU authorities (the EPC died and maybe the EPO too; it's unregulated and it grants false patents that harm Europe because the courts don't function, either)



  29. Today's Linux Standing for the Opposite of What Linux Users Stand for

    The so-called 'Linux' Foundation or the "Corporate Linux Foundation" is alienating many of the original users of GNU/Linux and it still insults their intelligence; it's rewriting history, it still distorts the objectives, and before we know Linux will perish and lose momentum because all the excitement associated with the brand will fizzle away



  30. Links 14/6/2021: Kdenlive 21.04.2 and Raspberry Pi 400 Support in Linux

    Links for the day


RSS 64x64RSS Feed: subscribe to the RSS feed for regular updates

Home iconSite Wiki: You can improve this site by helping the extension of the site's content

Home iconSite Home: Background about the site and some key features in the front page

Chat iconIRC Channel: Come and chat with us in real time

Recent Posts