IBM Is Sticking to Indemnification Guns

By Peter Galli  |  Posted 2004-02-02 Print this article Print

IBM won't indemnify Linux customers and says court decision on SCO is needed.

IBM is holding firm to its plan to not indemnify its Linux customers.

Despite recent efforts announced by Hewlett-Packard Co. and Linux distributors Red Hat Inc. and Novell Inc., IBM officials say that indemnification will not resolve the underlying dispute with The SCO Group Inc.

"Weve said all along that you can indemnify, but it doesnt resolve the major issue, which is what were dealing with in the courtroom," said Jim Stallings, general manager of Linux at IBM, in an interview here recently.

IBM will continue to fight the lawsuit brought by SCO, of Lindon, Utah, Stallings said, arguing that the only way to end the matter is to get a judgment in a court.

"You get a judge to state the facts and deliver a decision so we can all move forward based on that," Stallings said. "We are leading that charge. We are the one in court fighting this through the process. You should just know that we are going to continue that."

Stallings suggested that it is not necessary for IBM to indemnify its customers because several layers of protection are already available to them. "If Im a customer and Ive made a Linux buy decision, I have the two distributors, Red Hat and Novells SuSE Linux, saying they are going to protect me, the customer.

"The OSDL [Open Source Development Labs Inc.] has also said it is going to protect the customer, and, by the way, IBM is in the OSDLs defense fund, along with Intel [Corp.] and other members. So we are all in this. IBMs in court fighting the major fight, were protecting customers through OSDL, while Red Hat and SuSE are also protecting them. If Im a customer, I have layers of protection," Stallings said.

Last month, Novell, of Provo, Utah, and Red Hat, of Raleigh, N.C., announced programs to protect their Linux customers. Novell announced an indemnification program against possible legal actions for SuSE Linux 8 customers that signed an upgrade protection and qualifying technical support contract.

Red Hat launched the Open Source Assurance Plan, which is designed to protect customers Linux investments and ensure they are legally able to continue to run Red Hat Enterprise Linux without interruption.

But Stallings said that few of the companys customers are calling for indemnification and pointed out the accelerating momentum and adoption of the open-source operating system.

"Customers are deploying Linux; governments are deploying Linux. Most of the customers I talk to dont ask about indemnification, and customers dont call and ask for indemnification as if its a product," he said.

Peter Galli has been a financial/technology reporter for 12 years at leading publications in South Africa, the UK and the US. He has been Investment Editor of South Africa's Business Day Newspaper, the sister publication of the Financial Times of London.

He was also Group Financial Communications Manager for First National Bank, the second largest banking group in South Africa before moving on to become Executive News Editor of Business Report, the largest daily financial newspaper in South Africa, owned by the global Independent Newspapers group.

He was responsible for a national reporting team of 20 based in four bureaus. He also edited and contributed to its weekly technology page, and launched a financial and technology radio service supplying daily news bulletins to the national broadcaster, the South African Broadcasting Corporation, which were then distributed to some 50 radio stations across the country.

He was then transferred to San Francisco as Business Report's U.S. Correspondent to cover Silicon Valley, trade and finance between the US, Europe and emerging markets like South Africa. After serving that role for more than two years, he joined eWeek as a Senior Editor, covering software platforms in August 2000.

He has comprehensively covered Microsoft and its Windows and .Net platforms, as well as the many legal challenges it has faced. He has also focused on Sun Microsystems and its Solaris operating environment, Java and Unix offerings. He covers developments in the open source community, particularly around the Linux kernel and the effects it will have on the enterprise.

He has written extensively about new products for the Linux and Unix platforms, the development of open standards and critically looked at the potential Linux has to offer an alternative operating system and platform to Windows, .Net and Unix-based solutions like Solaris.

His interviews with senior industry executives include Microsoft CEO Steve Ballmer, Linus Torvalds, the original developer of the Linux operating system, Sun CEO Scot McNealy, and Bill Zeitler, a senior vice president at IBM.

For numerous examples of his writing you can search under his name at the eWEEK Website at


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