SCO Reveals Its First Linux Licensee

By Steven Vaughan-Nichols  |  Posted 2004-03-01

SCO Reveals Its First Linux Licensee

For many months, officials of The SCO Group Inc. have asserted that companies were ready to sign its Linux intellectual-property license. SCO on Monday made public one of those names: a dedicated hosting firm.

The company said EV1Servers.Net, the dedicated hosting division of Houston-based Everyones Internet, had signed an intellectual-property-licensing agreement granting the firm the right to use Linux.

At the same time, Univention GmbH, a Bremen, Germany-based Linux reseller and integrator, announced it had reached an out of court settlement with SCOs German division, SCO Group GmbH. Under the terms of the agreement, SCO agreed to stop claims that Univentions Linux contains unauthorized SCO-owned Unix intellectual property and halt threats of legal actions against German Linux users.

SCO has claimed for months that companies signed up for a Linux license, but until today it declined to provide an example. Although SCO first stated last summer that Linux users must purchase a license, it took some months before customers could actually buy it. It wasnt until mid-January, that the company made its IP license easily accessible via its Web site.

Under EV1Servers.Net agreements terms, SCO will provide the hosting business with a site license that allows the use of SCO intellectual property in binary form on all Linux servers managed by EV1Servers.Net for each of its hosting facilities. According to SCO, the "site license allows EV1Servers.Net and its customers to continue running business operations on Linux servers without interruption or concern regarding SCO IP issues."

Blake Stowell, SCOs director of public relations, said that EV1Servers.Net had made the deal because its "CEO felt that there was uncertainty about Linuxs legal standing and they made a business decision to avoid any possible doubts about their use of Linux for both themselves and their customers."

Stowell added, "They didnt pay full retail price on each server, but the deal was still worth seven figures all together for SCO."

EV1Servers.Net, formerly, was founded in 2000 as a low-cost Web hosting business. According to NetCraft Ltd., the Bath, England-based Net performance and security firm, EV1Servers.Net is one of its top ten hosting providers.

EV1Servers.Net currently uses Red Hat Enterprise Linux, Red Hat 9 and Red Hat 7.2 for its thousands of Linux servers.

Red Hat Inc. spokesperson Leigh Day said that the Raleigh, N.C., company had "no comment" that a customer was paying SCO to use Red Hats Linux. Red Hat sued SCO in August, seeking pre-emptive relief against SCO, and against the IP claims that are the basis for SCOs Linux license.

However, that legal action wasnt enough assurance for Everyones Internet. "The SCO agreement eliminates uncertainty from our clients hosting infrastructure," said Robert Marsh, CEO of Everyones Internet, in a statement. "Our current and future users now enjoy the peace of mind of knowing that their websites and data are hosted on a SCO IP compliant platform. This agreement demonstrates EV1s commitment to providing customers with stable, long term solutions that they can depend on for their growth."

Next Page: Trend Ahead for SCOs Linux License?

Trend Ahead for SCOs

Linux License?">

SCO said other companies have signed up for a SCO IP license. However, analysts disputed the claim.

Dan Kusnetzky, vice president for system software research at Framingham, Mass.-based IDC, said a trend was difficult to see from todays announcement. "SCO had been hinting that wed see a big, well-known name and this wasnt it," he said. Furthermore, "I dont think a single licensee or even a small handful of licenses indicate a trend. For every one that might sign an SCO license there are hundreds waiting to see what happens with the SCO Unix and Linux litigations.

Kusnetzky also wondered what other companies and individuals who have contributed to the Linux kernel will make of this move. "The Linux kernel contains a lot of things that contains IP from a lot of people, what are they going to do now? Will they be pleased that the SCO group is now charging a fee for their work? Can we expect litigation from all over the planet aimed at SCO because theyre not being paid or consulted for SCOs use of their IP work?" he said.

Bill Claybrook, vice president of Linux strategy at the Harvard Research Group Inc. also didnt see trend growing. "This was probably a once-in-a-lifetime thing based on SCO making them a heck of a good deal so SCO could have something to talk about. I dont think were going to see a run on buying SCO licenses. If it was a big, important company instead of a relatively unknown Web hosting company, SCO might have something to talk about."

Meanwhile, SCOs Univention agreement follows an injunction delivered in May from a German court that prevented SCO from claiming that Linux contains illegally-obtained SCO intellectual property, a k a Unix source code.

Under the agreement, SCO GmbH agreed to stop alleging that Linux contains SCOs unlawfully acquired intellectual property; to stop claiming that Linux users might be liable for breaches of SCOs intellectual property; and to cease claims that Linux is an unauthorized Unix derivative. SCO GmbH also said it would not threaten to sue non-SCO Linux customers.

Check out eWEEK.coms Linux & Open Source Center at for the latest open-source news, reviews and analysis.

Be sure to add our Linux feed to your RSS newsreader:

Rocket Fuel