A SCO loss would clear the air

SAN FRANCISCO (09/19/2003) - For corporate Linux users, open source developers, and IBM Corp., The SCO Group Inc.'s lawsuit remains a dark cloud on the horizon, threatening to spoil the party. Alleging its Unix code was illegally used in IBM's Linux, SCO has cast a pall over the industry. But there is always hope, and these groups see a good prospect for SCO losing its case, affirming open source principles in the process.

A SCO loss could clear the air and allow enterprise IT managers to feel more secure about using Linux. But according to some analysts, there is also a danger that, with a SCO loss, IBM will feel emboldened to pursue its own patent strategies.

One party that will not be breathing a deep sigh of relief -- and may not be breathing at all after an IBM win -- is SCO. Many believe the company will be driven into bankruptcy, be acquired, or slowly sink beneath the software waters without a ripple.

"They have effectively destroyed themselves as a Linux supplier because the open source community is so outraged with them and won't step in to help when they lose this," says Dan Kuznetsky, an analyst in charge of system software research at IDC. "Their Unix revenue streams are already in sharp decline from the assault by Windows. My sense is, SCO will be gone -- with people squabbling over their remaining assets."

Should SCO lose, the big winner will be IBM and, by extension, the dozens of small, underfunded open source companies who benefit from Big Blue's deep pockets. With the legal millstone taken from around its neck, the company will be free to pursue its ambitious, across-the-board Linux strategy against archrivals such as Hewlett-Packard Co. and Sun Microsystems Inc.

"Frankly, if SCO loses, IBM takes the poll position, with a number of different parties from the open source world cheering them on. And this nation of small companies with limited resources has a chance to get lifted up with IBM's economic and technical help," says Chris LeTocq, an analyst at Guernsey Research.

Many corporate users who depend on Linux-based servers and open source applications will benefit enormously from SCO losing. Otherwise, they will have to pay handsome licensing fees for their software or reimplement their Linux-based servers as far back as Version 2.2 of the Linux kernel, something that is not technically feasible to do.

"(SCO) feels the offending code is now so interspersed with the 2.4 and 2.5 kernels that it will be impossible to effectively remove it," says Al Gillen, vice president of systems software research at IDC. "They believe the only way for it to be rectified is to go back to the 2.2 kernel and start all over again from there, and that is never going to happen."

But even as open source advocates anticipate an IBM victory, others are already warning that IBM itself may become the next threat to open source in the aftermath of a SCO legal defeat.

Some believe the SCO-IBM suit is essentially a contractual dispute and will do little to alter IBM's traditionally strong advocacy in favor of software patents. The company continues to make close to $1 billion a year from its software-patent portfolio and is continuing to patent software whenever possible.

"We see some problems already on the horizon with IBM and how they view patents. Their long-term strategy there is not a positive one for open source," says Bruce Perens, president of Perens, a consultancy that specializes in open source policies and issues. "Open source companies are the indigenous people of software, and here comes IBM along to harvest the buffalo. I am starting to regret that we sold them Manhattan Island right now."

SCO's major competitors among Linux distributors, most notably Red Hat Inc. and SuSE Linux AG, will also be dancing in the streets. Some executives from these companies are not worried about similar suits in the wake of a SCO loss.

"With SCO losing this suit, it will be so much harder for potential future parties to raise a similar claim again, and that can be only good for Linux," says Juergen Geck, CTO of SuSE. "And even if they won, the outpouring from the open source community would replace whatever offending code there is very quickly."

And with a SCO loss, a positive outcome may be a deeper, industrywide re-examination of how software is created, distributed, and controlled, which could throw even more support behind the open source movement. It would figure to also turn the screws on a strong advocate of licensed software -- Microsoft. Some developers of both open source and proprietary software believe this sort of reassessment is long overdue.

"One scenario that will play out with SCO losing is a come-to-Jesus movement about how software is developed," says Dana Gardner, senior analyst at The Yankee Group. "It's been a rather messy area about who owns and controls software and to what degree. Many are debating to what degree software is intellectual property and think it should be closely guarded ... like patents."

Another impact of a loss for SCO could be the emergence of an independent central agency to serve as a technical and political guardian for issues involving the far-flung and very diverse open source community. Some believe that force could be Open Source Development Labs (OSDL), which has the backing of many open source players both large and small, and is the new corporate home of Linux creator Linus Torvalds.

"The open source community is seen as something that doesn't have a center or core, but rather a community of communities that are loosely connected," IDC's Kuznetzky says. "The SCO suit is a case where it could have used such a center. It would be nice to see something like OSDL emerge and assume that role."

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