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

Turns Out LLMs for Code Don't Save Time and Don't Improve Quality
Neither legal nor useful
 
Pissing Contests and Pissing Off Everyone
people who came from Microsoft are trying to vex and divide the community
Microsoft Repeats the Mistakes Made by the EPO After We Exposed a Major Microsoft/EPO Scandal 10 Years Ago
That scandal was all over the media, not just in English
The Demise of LLMs
We've just checked BetaNews again. They've dropped all the slop and went back to human authors.
Gemini Links 13/07/2025: Sonpo Museum of Art and FCEUX
Links for the day
Links 13/07/2025: UnitedHealth's Censorship Campaign, Australia Wary of China
Links for the day
Firing Away With Nonsense
Or fighting fire with fire
Links 13/07/2025: Climate Crisis, GAFAM Poisoning the Water
Links for the day
The Microsofters Will Have an Obligation to Compensate Us
This story isn't just about Microsoft. It's also about corruption, there are many women victims, there is abject "abuse of process", and many more scandals to be illuminated in years to come.
Reproducing at the EPO Instead of Producing Monopolies for Foreign Monopolies With Their Price-Fixing Cartels
Does the EPO recognise the need of well-educated Europeans to bear kids?
Valnet Inc. Dominates Real (Not LLM Slop) GNU/Linux Coverage in 2025
And likely in prior years, too
Free Software Foundation (FSF) Fund Raiser Goes on
Later this month we'll expose another OSI scandal
EPO Staff Representatives Issue a Warning About Staff's Health and Inadequate Care
Even the EPO's own stakeholders (money sources) are openly protesting against what the EPO became
Links 13/07/2025: Partly Assorted News From Deutsche Welle and CBC
Links for the day
Gemini Links 13/07/2025: Board Games and Battle Styles
Gemini Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, July 12, 2025
IRC logs for Saturday, July 12, 2025
Plunder at the Second-Largest Institution in Europe
cuts, neglect, health problems, even early deaths
Links 12/07/2025: Political Developments, Attack on Opposition, Climate Actions
Links for the day
Gemini Links 12/07/2025: Melodic Musings and Small Web July
Links for the day
Links 12/07/2025: Jail in China for Homoerotica, South Korea Discriminates Against Old Workers
Links for the day
If Only Everything Was Rewritten in Rust, We'd Have No More Security Issues?
Nope.
Links 12/07/2025: Birdwatching and Fake/Misleading Wall Street 'Valuation' Figures
Links for the day
Gemini Links 12/07/2025: How to Avoid Writing, Apps for Android
Links for the day
Using SLAPPs to Cover Up Sexual Abuse and Strangulation
The exact same legal team of the Serial Strangler from Microsoft and Garrett already has a history fighting against "metoo"
EPO Staff Committee on Harassment in the Workplace
slides
Adding the Voice of Writers to UK SLAPP Reform
The journey to repair antiquated (monarchy era) laws will likely be long
EPO Takes More Money From Staff for Speculation (Pensions), Actuarial Study Explains the Impact
"The key change in this year’s Actuarial Study, due to cascading the new “risk appetite” from the financial study, is a significant increase of the total pension contribution rate of 5.7 percentage points, up to a total of 37.8%. This is driven by an unprecedented decrease in the discount rate of 105 bps down to 2.2%."
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, July 11, 2025
IRC logs for Friday, July 11, 2025
Microsoft - Like IBM - Does the "Relocation" Tricks (Start Over Elsewhere, Then Get Sacked by Microsoft)
It is a "low blow" or a "dick move"
After the Free Software Foundation's Campaign to Raise Money Let's See Campaigns to Finish Off Microsoft (Vista 11, GitHub etc.)
Microsoft is in effect collapsing
Your Publications Have No Major Impact Unless or Until You "Get Some Heat"
we're on the right track
Slopwatch: A Cause for Hope, the Hype is Dying
For about a month we showed that becoming a slopfarm - for several weeks - resulted in utter failure and ruin for BetaNews
Links 11/07/2025: Censorship Worsening, 3D Printing Success Stories, UK and France Unite Around Nukes
Links for the day
Gemini Links 11/07/2025: Zorin OS and Scriptonite Updates
Links for the day
Links 11/07/2025: Hardware, Russia, and China
Links for the day
Links 11/07/2025: Intel Collapsing and Microsoft Resorts to Bribery to Push Slop Via Obligatory Education
Links for the day
The EFF Sided With the Team That Strangles Women and Tells Women to Kill Themselves
They say that apathy and inaction are a form of a "stance"
"Nat [Friedman] and [the Serial Strangler From Microsoft] Were Always Exceptionally Close," Says Former Housemate and Colleague
Now Alex (hiding behind another name when that suits him) not only attacks women but also people who merely report what he did to women
Exemplary List of Things That Are Not Artificial Intelligence or Even Intelligence
The "age of AI" or "era of AI" or "AI revolution" mostly boils down to rebranding, just like "the cloud"
New Letter From the European Patent Office Explains How the Office Plots to Grant Many Illegal Patents, a Self-Fulfilling Prophecy of 'Growth'
Open letter to Mr Rowan (VP1) and Mr Aledo Lopez (COO)
Abuse of Process
5RB is employing people who help violent men
What Microsoft's Nat Friedman and Microsoft Lunduke Have in Common
"Get in da car; No time to explain, loser"
Microsoft and IBM Don't Have Much of a Future (They Mostly Pretend at This Point)
IBM and Microsoft are in some ways alike but in many ways different
It's Not Just Twitter (or X.com) That's Dying, Microsoft's Equivalent is Dying Also
Unable to find a business model
GitHub Copilot Can Cause the Bankruptcy of GitHub to Come Sooner and GitHub to be Shut Down Just Like Skype
Some publicly available information suggests that even for each paid subscriber for plagiarism (LLM 'coding') GitHub Copilot still loses more money than it makes
Wayland is Bad for the Planet
If you use Wayland, it'll take you longer to accomplish tasks and you will consume more energy (or battery life)
Legitimising Those Who Sabotage You
Microsoft is a very malicious company
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Thursday, July 10, 2025
IRC logs for Thursday, July 10, 2025
On Microsoft Layoffs
we might be looking at about 60,000 Microsoft layoffs since 2023
EPO Management Already Breaks Its Own Promise (Lie) on "Bringing Teams Together"
This gut-punching move happened just 2 days ago
Gemini Links 11/07/2025: Occupation of 2025 and "Old Man Yells At Soundcloud"
Links for the day
Our Lawsuits Against the 'Cancel Mob' (Ringleaders) Helped Reduce Anti-Free Software Online Abuse
That's not to say that lawsuits are the best way to handle terrible people. But that can help.