Industry nervous, not afraid of SCO suit

By Alorie Gilbert, CNET News, 27 May, 2003 11:24

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Information technology managers are moving ahead with their Linux installation plans while nervously watching for the legal implications of SCO Group's infringement claims against the upstart operating system. Linux has steadily gained a foothold in corporate servers during the past few years as companies have sought to save money and Linux functionality has improved. But that upward trend could stall if IT managers fear the legal dispute between SCO and IBM -- a tussle that was escalated last week when Microsoft sided with SCO. Already, some IT research analysts are advising companies to take extra caution in deploying Linux. "Minimise Linux in complex, mission-critical systems until the merits of SCO's claims or any resulting judgments become clear," said research firm Gartner in a report it released last week. Gartner added that the legal disputes could take a year or more to be resolved. The research company also recommended IT managers seek advice from their legal departments and perform "due diligence" on Linux or other open-source code by exploring its source and integrity. SCO filed a suit against IBM in March charging Big Blue with misappropriating some Unix technology and building it into Linux, an open-source operating system now installed on roughly 27 percent of corporate servers and more than half of all Web severs, according to market researcher IDC. Initially, some in the open-source software community laughed off the suit against IBM, which seeks $1bn in damages, as a desperate act by a company sidelined by financial losses and shrinking sales. But last week, Microsoft added fuel to the fire by licensing SCO's Unix technology, thereby bolstering SCO's claims and helping SCO financially as it presses its case against IBM. Because Linux is viewed as an appealing alternative to Windows, Microsoft considers it a threat to its dominant Windows franchise. Microsoft chairman Bill Gates, for example, said last year he considers IBM and Linux as the company's biggest competitors. And in a survey of 225 chief information officers last year, 29 percent said they owned Linux servers, nearly one-third of whom recently purchased the low-cost machines to replace servers running Windows. Adding to the turmoil, SCO has actively sought to make IT buyers think twice about their Linux investments. SCO, based in Lindon, Utah, sent letters earlier this month to 1,500 corporations warning them they could be liable for using Linux. So far, the warning appears to be going unheeded. "It's not giving us any kind of pause," said Darin Sennett, who handles Web-related work for Powell's City of Books, a bookstore in Portland, Oregon. "If there were court findings that would make anything we're doing illegal, then yes, we would make some changes, but we're rolled out, and we're not about to start taking things down because of this claim." Powell's, which operates seven stores and employs a staff of 400, runs Linux on about a dozen severs, Sennett said. While moving forward with their Linux deployments, some say they are seeking legal advice, carefully monitoring the situation and actively discussing it with company executives. "We will study this to death and watch it like a hawk and do what it takes to ensure we're in compliance with any intellectual property rights," said Mike Prince, chief information officer of Burlington Coat Factory in Burlington, New Jersey. "Having said that, we don't think we are (infringing on any intellectual property rights) and don't think SCO will prove we are." Prince said he has exchanged email with Burlington's attorneys about the SCO suit, but is moving forward with plans to expand the company's Linux deployment to 4,000 machines by the end of the year. The company, which operates more than 300 stores across the US, began installing Linux desktops and point-of-sales systems in its stores in 2000 and is adding Linux servers in its data centre, Prince said. Boscov's Department Store, a retail chain is likewise staying committed to Linux, while carefully assessing the situation, said chief information officer Harry Roberts. "I think the advice certainly for every CIO who has any level of Linux implementation is to gather as many facts as they can and seek legal counsel." Others say there's nothing they can do until SCO discloses details about the parts of Linux it claims IBM copied from its Unix technology. SCO said it plans to disclose specifics in court and to credible third parties who sign nondisclosure agreements. Asked if he was taking the issue seriously, Ed Wojciechowski, chief information officer of Menasha, a packaging manufacturer, said, "I don't know what to be serious about. There are claims, but I haven't seen supporting documentation or evidence. Until that happens, I don't know what response to make." SCO has claimed parts of Linux have been cut and pasted from Unix intellectual property owned by SCO, but the company has not presented its evidence. In the meantime, the shroud of secrecy and Microsoft's backing of SCO's position is creating ill will among business users who suspect SCO and its Redmond licensee of trying to squash the open-source movement. "One thing that troubles me is the instant alliance with Microsoft through its licensing the SCO code and posturing in a way that makes you wonder if they're trying to weaken Linux to strengthen Windows," said Burlington's Prince. "One has to wonder if there's a connection there." Microsoft representatives say the company licensed the SCO technology in response to SCO's request and to honour an "ongoing commitment to respecting intellectual property and the IT community's healthy exchange of IP through licensing." While many companies already invested in Linux may thumb their noses at SCO, the confusion created by its claims may muddy the waters for companies that are considering Linux but have yet to take the plunge. IT managers say the so-called fear, uncertainty and doubt, known in the computing world as FUD, raised by the suit could slow development and adoption of open-source software. "I can just imagine that there will be corporations where a proposal to embrace Linux will be put on hold now," Prince said. "If I were starting from scratch, (SCO's claims) might be something to tip a decision or cause a delay."

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