Re: OT: SCO Extortion

----- Original Message -----
From: "Marc G. Fournier" <scrappy(at)postgresql(dot)org>
> We figure that SCO will either be bought out, or go bankrupt, before we
> have to worry about them :)

Especially since they don't reply to licensing inquiries. I know, I sent
them a letter asking what sort of licensing I needed and under what basis I
needed it. I suspect they are trying not to pick on anyone who seems to
have a cl (half a clue).

IANAL, but you might want to read this before you respond and possibly
consult with a lawyer as well. This is an attempt to understand where SCO
is coming from, and might be helpful in further research.

I am not sure where SCO is coming from or where its influences are.
However, I have noticed a number of interesting issues which makes me think
that this is a major problem at SCO which goes back quite a ways.

I remember Ransom Love (former Caldera CEO) writing that the GPL was bad for
business. At the time Caldera was a has-been Linux distributor who was
facing declining sales in part because they had never embraced
redistributable distros and was being crowded out by RedHat and others.
Caldera at the time was trying to sell per seat licenses for its Linux
distro and justifying this by bundling it with proprietary development
tools. Love left Caldera after they acquired the OS division of Tarantella
(formerly SCO) and headed the UnitedLinux project for a while. Sometime
afterward, Caldera renamed itself as The SCO Group.

I am not sure that Love gets it when it comes to the GPL, but he has double
backed on many of the harsher statements he made while at Caldera, which
leaves me wondering whether there was heavy pressure from the Board of
Directors (and Canopy) to try to make it as a proprietary software company.
They utterly failed in this regard, and were actually facing a shareholder
lawsuit sometime before Love stepped down.

To my knowledge Caldera was never profitable despite being an early favorite
among Linux distributions. I suspect that when Caldera was formed, they
understood that "Business" was not yet comfortable with open source, and so
they sought to provide a Linux solution which provided many of the benefits
that businesses saw in proprietary software at the time. Unfortunately,
Caldera IMO made a business mistake which has cost them their leading
position and may yet cost them what they have left (albeit not much). This
mistake was buying DR DOS from Novell and immediately filing suit against
Microsoft for Sherman and Clayton act violations (anti-trust law).

The suit dragged on for nearly 5 years and was settled the week before it
was due to start in court for an undisclosed (but by all accounts
substantial) sum. In the mean time, the landscape had changed and Caldera
had become a dinosaur. Caldera and others had outmanuvered them by allowing
redistribution of ISO images of their distros, and Caldera was facing losing
market share. Caldera's response was to tighten their control over
redistribution of their software and attempt to license the software per
seat. This failed miserably. So Caldera (with part of their settlement
money) bought SCO (another failing product with a limited market). They
continued to try to unify development on SCO Unix and Linux, but this did
not attract many customers either (who were now understanding that open
source was in itself a business benefit because it allowed for greater
flexibility in implementation). Linux was here but Caldera was not really a
part of it. This was the timeframe which defined Love's comments regarding
the GPL.

Later, the IBM suit was filed, with RedHat countersuing, and SCO later suing
Novell as well over the dispute of the copyrights it needs in order to sue
anyone else over copyright infringement. Their current CEO, Darl McBride,
has characterized the strategy as a success not because SCO is selling more,
but because greater publicity has raised their their market cap (by raising
their stock price).

How a litigation strategy is successful at building a business if one is not
really selling many products is entirely beyond me unless this is a stock
game. SCO wants the world to think that they are going to be successful and
be able to sell a product (licenses to run Linux), and because Linux is big,
they will be big too.

They have also stated or implied that they might consider looking into
infringement in BSD, Windows, and OS X, and have issued statements that they
believe that all other operating systems are derivatives of their IP. In
other words, it doesn't matter what OS you are using unless it is theirs,
and even there if they lose their suit with Novell, there might be unforseen
consequences (such as a lack of support as The SCO Group goes out of
business).

The SCO cases (SCO vs. IBM, Red Hat vs. SCO, and SCO vs. Novell) are worth
following, but I am not worried yet.

Best Wishes,
Chris Travers