SCO Turns Up the Heat on Linux Users

By Peter Galli  |  Posted 2003-08-18 Print this article Print

As SCO prepares to kick off its annual SCO Forum, the company's CEO Darl McBride issues his most definitive warning yet to corporate Linux users.

LAS VEGAS—The SCO Group on Sunday said that it has compiled a list of all the large companies with numerous servers running Linux and warned that it would not hesitate to drag them into court if they refused to pay for UnixWare licenses.

In his most definitive warning to corporate Linux users to date, SCO CEO Darl McBride told eWEEK here on Sunday ahead of the start of the companys annual SCO Forum 2003 on Monday that there are some 2.5 million servers running Linux and that SCO has "identified by name those companies running many of them.

"We are in the process of contacting them about coming into compliance and taking a UnixWare license from us. If they refuse to do so, we will sue them directly and see them in court," he said.

In March, SCO sued IBM for $3 billion, alleging that IBM has made efforts to "improperly destroy the economic value of Unix, particularly Unix on Intel [Corp.], to benefit IBMs new Linux services business." At the same time, SCO sent the CEOs of the top global companies letters warning them that Linux was an illegal derivative of Unix, to which it holds the intellectual property rights, and cautioning them they could face legal action.

SCO then announced a program where Linux users could buy licensesfor each of the servers they had running Linux that would bring them into compliance and protect them against any litigation.

When asked by eWEEK if SCO intended to first sue a large Linux user like a Wall Street financial firm or an enterprise-level Linux customer, McBride said that would probably be the case as smaller companies tend to settle when faced with litigation.

He also said SCO was expecting some enterprise Linux users to take the advice of IBM, Red Hat, SuSE and the other Linux vendors and refuse to pay for a UnixWare license. "We will take legal action against any company that violates our intellectual property. We have no fear about going to court as we have nothing to hide. The sooner the court hears and rules on the issues in this matter, the better for us," he said.

"In a nutshell, this litigation is essentially about the GNU General Public Licenseand all it stands for. That license has not yet been challenged or tested in court, but it is now going to be. We are also firmly and aggressively challenging the notion that Linux is a free operating system," McBride said.

Asked whether SCO could afford to start suing individual companies in addition to the costs of years of litigation against IBM, including defending itself against the recent countersuit brought against it by Big Blue as well as the preemptive suit brought against it by Red Hat, McBride said SCO had already set aside $10 million for legal fees and had so far only spent some $500,000 of this.

He also said SCO had expected IBM to countersue far earlier than they had, but that the delay was probably due to the fact that Big Blue was "hoping the matter would just go away. We expect them to throw everything they can at us before finally coming to the table to negotiate a settlement. Their countersuit is just part of that," he said.

But, McBride said, enterprise Linux customers are becoming increasingly unhappy about IBM and Red Hats unwillingness to indemnify them and are looking to move on. "We have already had one enterprise sign a license with us for this reason, and there are others in the pipeline," he said.

Next page: What to expect at SCO Forum 2003

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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