Analysts said the deal is a smart legal move for Microsoft because it deflects any potential suit that SCO could make against the company on intellectual-property grounds. Microsoft developed its own version of Unix for Intel processors in the 1980s, and it still has Windows software that interoperates with Unix-based software. Microsoft and the Santa Cruz Operation, predecessor to the SCO Group, have a history of legal entanglements. In 1997, the two companies settled a dispute, brought before the European Commission in 1996, over royalties that SCO had been paying to Microsoft for technology related to Xenix, a version of Unix for personal computers developed by Microsoft in the 1980s. "Microsoft is trying to position themselves as lily-white in regards to intellectual property," Gartner analyst Tom Bittman said. "They're basically saying that they want nothing to do with this (suit)." More subtly, Microsoft's maneuver takes a dig at the open-source software business model and the companies that are backing. Microsoft general counsel and senior vice president Brad Smith said in a statement that the licence represents the company's "ongoing commitment to respecting intellectual property (IP) and the IT community's healthy exchange of IP through licensing". Microsoft has been troubled by the rise of the Linux operating system and of open-source software in general, which are maintained by independent software developers and given away at no charge. The GNU general public licence (GPL) associated with open source is anathema to Microsoft's business model, which is based on commercial software licences. Linux is now installed on roughly 27 percent of corporate servers and more than half of all Web servers, according to market researcher IDC. By licensing Unix two months after SCO sued IBM, Microsoft can also draw attention to the legal issues that the SCO suit has triggered, analysts said. Illuminating potential legal hitches associated with open-source software allows the software giant to ally itself with SCO without having to criticise the use of Linux, a tactic that has backfired for the company in the past. "Microsoft has been warning people about IP issues for a long time," Gartner analyst David Smith said. "In many ways they're looking back and able to say 'I told you so.'" News.com's Ian Fried contributed to this report.
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