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

Network Plumbing
We hope it'll help speed things up
"My Hands Are Shaking While Writing" About IBM's Mass Layoffs at Red Hat (Bluewashing)
Shame, shame, shame on the corporate media for not covering Red Hat's layoffs this year
Taking a Look at the Last Articles of Bob Cringely at Forbes, They Were All About IBM and Its Collapse
It's all about IBM
What is "Computer Science"? It is What Broligarchs Reject.
Nowadays some people call themselves informal terms or made-up titles (with terms like "AI" or "big data" or "data" tossed into the mix)
Brigading Against Women - Part XXVII - Americans and Public Executions
"People who work for Facebook / Xitter / Bytedance's Tiktok / Microsoft / Oracle / IBM / Apple / Uber / Lyft / Wolt / DoorDash / AirBnB / Bolt / and so on are doing some world-class projection when they have the audacity to call others Bad People(tm)"
Gemini Links 12/10/2026: Westminster Quarters, Civilization, Luddites, and More
Links for the day
 
Mass Layoffs at Microsoft Again (October 2026), So-Called 'AI' Units Impacted Because Slop ('AI') Has No Real Future
So much for the future of Microsoft being "hey hi" (AI)
European Readers, Please Contact Representatives (in One's Nation) Attending the Administrative Council Meeting
Normalising cocaine in in Europe's largest institutions (the people running these) is a slippery slope
For Half a Year the European Patent Office (EPO), Europe's Second-Largest Institution, Has Had Water Problems in the Toilets
And it's not being fixed
Intercontinental Brigading - Part I - The Failed Attempt to 'Swat' Our Series About the Attacks and Crimes Committed Against Us
This coincided with threats to our lives
Links 12/10/2026: Strike on Riyadh and GOP Pays Voters ("Surprise $90 Social Security Payments")
Links for the day
Microsoft's XBox CEO Spoke of a "Return to Growth" Last Week, But XBox Sales Lowest in XBox History (Quarter of a Century)
Microsoft's XBox is dying. It's a countdown to nothingness.
Links 12/10/2026: Shopify (Slop Booster) Has Security Issues, "Russia’s Yandex Says Data Center in Vladimir Shut Down After Drone Attack"
Links for the day
Microsoft Windows Causes Problems (and Delays) to LibreOffice and The Document Foundation
Nothing would please Microsoft more than Windows curtailing the development of LibreOffice and adoption of ODF
So Far This Year Microsoft Windows Lost a Lot of Ground in China, GNU/Linux Gaining at Its Expense
GNU/Linux will soon exceed 10%
Lessons of Margaret Hamilton (Software Engineer)
Stop abetting men who attack women in the sciences
RIP, Bob Cringely
He was too young to leave us, his articles were still brilliant and his mind as lucid as ever
Linus Torvalds Has a Conflict of Interest Regarding Slop
Linus Torvalds is paid by the slop pushers
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Sunday, October 11, 2026
IRC logs for Sunday, October 11, 2026
Africa Sees GNU/Linux Exceeding 5% "Market Share"
It wasn't always like this. It used to be measured at 1 or 2 percent.
Slop-ware Is Not Newsworthy
LLMs are exceptionally loquacious and create large code bases
Links 11/10/2026: US Sides With Vladimir Putin, Convicted Felon Dubbed "Agent of a Foreign Power"
Links for the day
IRC Tracker Back in Order, Number of Known IRC Networks Continues to Increase
We don't know if our article helped trigger a resolution
Links 11/10/2026: "Execution TV" (Iran Aped by US) and ‘Digital Oblivion’ Caused by Slop Frenzy Online
Links for the day
Voice for the Impoverished
the country's leaders attack the country's own press
Gemini Links 11/10/2026: Adults Dressing Up as Animals, 44th Birthday, and More
Links for the day
Running a Country's Economy by Borrowing Over $400,000,000,000 Per Month
This is the hallmark of an economy in irreversible decline
Brigading Against Women - Part XXVI - Trying to Deplatform Critics of Microsoft's Restricted Boot
Like James Bottomley, Matthew Garrett served Microsoft's agenda while employed and salaried by other companies
Anderon Is Not a Real Company, It's an IBM Bailout Dressed Up or Wrapped Up In Buzzwords
It certainly does seem like they receive money from taxpayers for nothing, or for IBM to do mass layoffs/closure at Albany under the guise of "making a new spinoff"...
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Saturday, October 10, 2026
IRC logs for Saturday, October 10, 2026
Gemini Links 10/10/2026: Radio Romania International, Avoiding GAFAM, Open Camera, and Another Palm
Links for the day
The 2026 Slop Prediction (Slopfarms Perishing)
Morality in the "digital world" has deteriorated profoundly
netsplit.de (Survey of IRC Networks and History) Only Partly Functional This Month
Get well soon, netsplit.de
Microsoft Cuts
GAFAM enshittification
NVIDIA Acts Like It Cannot Pay Salaries (Too Many Obligations, Sales in Circular Financing, or Basically Accounting Fraud)
Masters of acting as clients of themselves
Paying for elections, Reform UK illegal confession in High Court
Reprinted with permission from Daniel Pocock
Contemptuous Law Firm Accusing Others of Contempt of Court
Keeping a running tally can help
Links 10/10/2026: Let's Encrypt Making Changes (Problem for Small Sites/Operations), Quartz is Officially a Slopfarm (Busted)
Links for the day
Microsoft Abuses PERM and Lays Off Workers in India
The US government has made it easier for Microsoft to hide the mass layoffs
The GAFAM Elections in the United States
If the election is run by platforms that have back doors "baked-in" and if the communications are overseen by GAFAM, you would not have to be a "nutty MAGAt" to dispute the outcome
More GAFAM Layoffs (Late on Friday Night)
They say they are worth trillions, but they don't even make money
Male-Dominated EPO Fails to Have "Concrete Measures to Support Female Staff"
Being a female at the EPO is exceptionally hard
Brigading Against Women - Part XXV - No Anonymity for People Who Did Illegal Things
"Empathy is the sunlight to the vampire of culture."
Production Freeze at the European Patent Office (Opposing Monarchy, Institutional Maladministration and Corruption)
Eight reasons to participate
Links 10/10/2026: Microsoft 'Open' 'AI' Silencing Critics, "Data Centres are the New Front Line in the Russia-Ukraine War"
Links for the day
Over at Tux Machines...
GNU/Linux news for the past day
IRC Proceedings: Friday, October 09, 2026
IRC logs for Friday, October 09, 2026
Gemini Links 10/10/2026: Optimism, Stargazing, "Life Without Smartphone", and Fairphone 4
Links for the day