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Linux vs. SCO—A Foregone Conclusion

Jim Ready

Issue #118, February 2004

Failure to embrace disruptive technology leads to bad behavior and worse business.

When a disruptive technology appears in an existing marketplace, established players initially take pains, ostrich-like, to ignore it. Disruptive technologies usually start out as underpowered or as answers in search of a question, making it easy to belittle and discount the interloper. However, once a disruptive technology gains traction and starts making in-roads to established territory, the powers-that-be wake to the fact with one of two responses—they either embrace the disrupter or attempt to crush it.

Linux is a disruptive technology par excellence. Linux began its life as a hobbyist novelty and a graduate school project. Even after it made its way into the world over the Internet, it lagged behind UNIX systems in terms of capabilities, documentation, support and the ability to leverage the hardware platforms on which it ran. What made (and still makes) Linux disruptive is that it works. The open-source development model, incremental but steady as the proverbial tortoise, relentlessly advanced the GNU/Linux operating system and tools to reach and then surpass the startled proprietary hare. The cooperative spirit of the Open Source community and the assurances provided by licenses such as the GPL, LGPL, BSD copyright, NPL/MPL and others help prevent the fragmentation endemic in proprietary UNIX and provide the legal basis for the open-source process.

The divide between the powers that embrace Linux and those that would crush it is wide and deep. Long-standing leaders, such as IBM, HP and Oracle, had the vision to build new businesses with and on the Linux platform, despite or because of their investment in proprietary software, including proprietary UNIX. Foremost in the opposite camp is of course Microsoft, longtime foe of UNIX and natural-born enemy of Linux, for both its open pedigree and the open-source model.

Poor misguided SCO meanders somewhere in the chasm between the two extremes. The SCO Group, reborn from Linux distributor Caldera and reminted with the SCO name, now feels rejected as its base of UNIX licensees migrate to Linux. With its claims against IBM and attempt to extort monies from Linux users, SCO is trying to turn Caldera's earlier enthusiastic embrace into a crushing clinch.

Outpaced technology companies have a long and sorry tradition of seeking in court what they cannot achieve in the open marketplace. Legal remedy in lieu of a successful business strategy always invokes the doctrine of unintended consequences. SCO's attempts to recover lost business from IBM AIX royalties will lead IBM and other licensees only to curtail their already declining proprietary UNIX shipments. Attempting to extract license fees from enterprise Linux users and embedded Linux deployers may delay Linux deployment in the short term, thereby stalling SCO's attempt to generate license revenues.

Self-deception is a typical response to disruptive technology. SCO's stated Linux Licensing Fees of $699 US for enterprise use and $32 US for embedded deployment represent a fantasy worldview that is out of line with the pricing and practices of both markets. On the enterprise side, this tidy sum is twice what Microsoft demands for its Windows products in comparable applications. For embedded systems, the SCO invoice outstrips typical low-volume royalties by a factor of at least three and is several orders of magnitude more for high-volume shipments in consumer electronics applications. For enterprise, the SCO fee quickly would exhaust available IT budgets; for embedded, it would overwhelm already slim margins on devices with bills of materials in the key $50–$200 US range.

None of these legal machinations would enhance the position of SCO UNIX one bit, nor would they garner Darl McBride any new Linux-based revenues. In SCO's imagined universe, where it prevails in the IBM suit or in its Linux licensing campaign, SCO still loses—does SCO imagine that it could capture, wound or even kill Linux as a commercial platform? It ain't gonna happen. A stuffed penguin in McBride's den would not lay any more golden eggs. Angry enterprise and embedded Linux users would not turn around and license SCO UNIX—it offers no technological advantage over Linux, even in high-end systems, and is completely inappropriate for embedded applications. Serious developers and users would wish a plague upon both SCO UNIX and SCO-licensed Linux. Diehards would stick with Linux and help to create a version scrubbed of any SCO detritus. Lesser souls might migrate to BSD or even end up in the clutches of Microsoft. None of these scenarios helps SCO, whose licensing-based revenue fantasy then reveals itself as a nightmare, first and foremost for SCO itself.

McBride and company need to realize that in the long term, SCO's claims would ensure that all SCO code, whether (temporarily) in Linux or in SCO UNIX, becomes untouchable and unmarketable, in any form.

So, McBride, Boies, et al. —go ahead, continue gunning for Linux and open source. Ready. Aim. Shoot yourself in the foot. Then, please hobble out of the way. Some of us are trying to do business.

James Ready is president and CEO of MontaVista Software, Inc., and has more than 25 years of technical and entrepreneurial experience. Cofounder of Ready Systems, he pioneered the development of the first commercially viable, real-time operating system (RTOS) product—the VRTX real-time kernel.

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