[wordup] Salt Lake City Weekly - Linux Code Red

[Adam Shand]

This is the most even handed article I've seen.  Especially interesting 
is that Darl McBride is Mormon and so this is coming from close to 
home.

From: http://www.slweekly.com/editorial/2004/feat_2004-01-22.cfm

Feature - January 22, 2004
Linux Code Red
by Shane Johnson

It’s taken more than a decade, millions of man hours and an 
international movement bent on software sovereignty to poise Linux as 
the fastest-growing player in information technology. Now, on the cusp 
of punching through proprietary software’s kung-fu grip on the market, 
a fuming little Utah County company threatens to stomp Linux dead in 
its tracks.

“I’ve been pounding the table here for a year or so saying there’s no 
free lunch, and there is going to be a day of reckoning for every 
company that thinks they are going to try and sell a free model.” 
That’s Darl McBride, president and CEO of the SCO Group, a perennial 
loser at selling UNIX and, until recently, Linux operating systems.

Filings with the Securities and Exchange Commission show that SCO 
posted hundreds of millions in losses from 1994 to 2002.

But ever since determining it owns the “ark and the covenant to the 
enterprise software industry,” says McBride, SCO’s bad fortune is on 
the upswing.

Through a series of intellectual property transfers, SCO wound up with 
the rights to certain dated distributions of UNIX, the proprietary 
software platform that Linux was patterned after. SCO asserts that code 
from its UNIXes was copied into recent Linux releases. Now the company 
is demanding that commercial Linux users cough up licensing fees for 
the UNIX in their Linux, or prepare for a tussle with SCO’s lawyers. 
And to show it means business, SCO has taken on computer giant IBM in a 
lawsuit that could reshape the balance of power among software makers. 
SCO insists Big Blue owes it billions for allegedly illegally 
contributing UNIX code to the Linux kernel—the core chunk of code 
underlying most distributions of the Linux operating system.

Should SCO prevail, besides reaping its own billions, software megalith 
Microsoft stands to win the war of enterprise operating systems. Linux 
has crept up on Microsoft, challenging its stranglehold on the server 
market by offering better prices, performance, security and 
reliability. And several Linux companies are positioning themselves to 
take a stab at Microsoft’s 94 percent hold on desktop operating 
systems. It’s a sign that the open-source software development model is 
edging out Microsoft’s proprietary model.

“People are tired of buying cars with their hoods welded shut. That’s 
what they’ve had in the software industry for years,” says Bruce 
Perens, a Linux cheerleader and open-source advocate.

With Linux software, source code is open for anyone to improve upon or 
add to, the premise being: the more heads you have working on each 
problem, the less likely something will be overlooked. Whereas 
proprietary software is locked up, accessible only to its owner, who 
isn’t necessarily driven to make the best product, but rather the 
easiest buck. And, as opposed to selling the operating system as a 
product in itself, open-source proponents see it as the infrastructure 
upon which valuable applications can be added, and services rendered.

Leading the charge against Linux is McBride, the blustering executive 
every Linux dweeb has come to loathe. “He’s no geek,” says Benjamin 
Choate, a self-trained Linux user living in Logan. “His tan’s too 
good.”

Choate is among the Linux devotees calling SCO’s claims ludicrous. 
What’s more, they say the company is embellishing its position to sow 
fear, uncertainty and doubt—FUD for short—in the minds of Linux 
developers, vendors and users. SCO opponents say it’s a mudslinging 
strategy to scare Linux users into paying up, and to make the slinger’s 
product look more inviting than the slingee’s.

See, SCO isn’t really even SCO. Its proprietary claims are for works it 
didn’t create. The veracity of those claims, many critics believe, 
hasn’t stood up to the most trivial scrutiny. And at every turn, those 
same critics say the company has revealed itself to be inconsistent and 
unforthcoming, leading them to conclude that SCO is merely extorting 
Linux users for unwarranted damages. A short history lesson is probably 
in order.

In June 2002, the copper-toned McBride took over the reigns of Caldera, 
a Linux and UNIX distributor desperately trying to find its place in 
the Information Technology world. Caldera broke out of Novell in 1994, 
betting on the potential of a “free” operating system, the foundation 
for which was developed by a quirky Finnish student, Linus Torvalds, in 
1991.

After pocketing a $250 million windfall settlement from Microsoft in 
January 2000, Caldera had garnered the clout it needed with investors 
to go public as a Linux company a couple months later. The irony isn’t 
wasted on the aggrieved Linux community, which now is staring down the 
cannon barrel of a former ally. And the settlement with Microsoft over 
an obsolete version of DOS gave a peek into Caldera’s only profitable 
division, the legal team.

The IPO was a headlong leap of faith into a saturated market that never 
panned out. Although Caldera was distributing some well-received Linux 
products, by mid-2000 its stock price was plummeting. Falling from an 
IPO high of about $30 per share, Caldera stock was trading at just 
above $5 when it found another horse to jockey. That horse was UNIX. 
With what was left of the IPO cash—the Microsoft dough floated up to 
the Canopy Group, a venture capital firm and Caldera’s primary 
shareholder—Caldera acquired the trademarks and UNIX division of the 
Santa Cruz Operation Inc. (SCO).

California-based “old” SCO, as many refer to it today, was a waning 
UNIX distributor that finally hit the wall. Before tanking, however, 
old SCO bought the rights to UNIX from Novell, which acquired them from 
AT& . Without actually issuing a ruling, a judge gave his opinion in 
the early ‘90s that AT& had let many of those UNIX rights slip into the 
public domain, which the Linux community now argues made, and still 
makes, much of UNIX up for grabs.

The proprietary imbroglio mattered little at first, because Caldera was 
aiming to marry UNIX and Linux—not set them at odds. The novel strategy 
promised to synergize the two systems, plucking the strong points from 
each to yield visionary distributions. Caldera even collaborated on 
UnitedLinux, a Linux project it struck up with competing distributors 
Conectiva, SuSE and Turbolinux. Again, the key was synergy.

Enter McBride. Within months of his arrival, Caldera changed its name 
to the SCO Group in a re-branding effort. The resulting “new” SCO 
promptly turned on its UnitedLinux partners and dropped a megaton bomb 
on the Linux world at large. In March 2003, SCO filed a $1 billion 
lawsuit against IBM, charging it violated SCO’s contract agreements by 
contributing UNIX code to the Linux kernel. IBM ignored SCO’s order to 
stop distributing the allegedly infringing code, whereupon SCO upped 
its damage claims to $3 billion.

McBride has rankled the Linux rank-and-file ever since. As SCO’s legal 
strategy unfolded, its Website was repeatedly attacked and brought down 
by hackers, presumably of the Linux variety, McBride claims. And SCO 
executives have even taken to traveling with bodyguards, a necessary 
measure, they say, given numerous death threats.

SCO and McBride were the perfect fit, it seems. Both made their names 
suing deep-pocketed companies. In 1997, McBride settled a lawsuit with 
his then employer, IKON Office Solutions, for a reported $3 million in 
a dispute over McBride’s compensation package.

Initially, SCO denied it had ominous plans for Linux end-users, 
assuring that its fight was with IBM. But as 2003 progressed, SCO 
admitted that it intended to squeeze licensing fees out of anyone 
running a Linux distribution for commercial purposes.

“Listen real clearly to what’s happening here,” McBride said by 
telephone from his Lindon office in early January. “The situation is 
that we used to be the leader … we were where Red Hat [the No. 1 Linux 
distributor] is now. Linux then comes in, with Red Hat being the 
ringleader, and really attacks our [UNIX] market share and our 
marketplace. And they do it by simply taking our value and doing it for 
free. So, it’s really hard to compete with free. And so, then we come 
back in, and we start looking at this Linux beast, and we looked inside 
of it, and we realized, ‘Hey, wait a minute, this is actually us—this 
is a substantial amount of our intellectual property showing up inside 
of Linux itself.’ And that’s when we got our war paint on and said, ‘We 
gotta go back and take this thing head-on.’”

And there’s been no sign of letup. SCO has stepped-up efforts to 
aggressively pursue its intellectual property claims against all 
comers. By threatening legal action, SCO believes it can get end users 
licensed up on Linux. For the introductory rate of $199 per Linux box, 
and $699 per server, commercial end-users can protect themselves 
against future SCO litigation. For months, SCO has encouraged users to 
take advantage of the promotional price, but there haven’t been many 
takers.

“We haven’t published the exact number yet,” McBride said. “It’s not in 
the dozens, but it’s, you know, we’ve had some that have started to 
sign up.”

One company that didn’t contest SCO’s licensing shakedown was 
Microsoft. It signed a $10 million deal with SCO last May, padding 
SCO’s legal coffers, and signaling to the Linux community which dog 
Microsoft was throwing its weight behind. Some in the Linux community 
have theorized that Microsoft is pulling SCO’s strings, but more 
likely, it’s just a lucky coincidence that SCO’s push could crush 
Microsoft’s competition.

“It sounds to me as if Microsoft, when they had a chance to help this 
effort along, felt that SCO is a very good proxy to do things that 
Microsoft couldn’t get away with,” said Bruce Perens.

SCO has extended its cut-rate licensing window several times. Dec. 31 
was the latest deadline to come and go, but news outlets were reporting 
in mid-January that SCO is still charging the promotional fees. McBride 
says that a recent round of letters—demanding proof that companies are 
not running Linux or releasing UNIX code—sent to SCO’s 6,000 UNIX 
licensees and companies on the Fortune 1000 list, should boost 
compliance with the licensing program.

And SCO provides a compelling incentive to its current customers to 
stick with the company.

“Our customers that are buying [UNIX] from us today, we generally don’t 
have a problem with,” McBride said. “We have some former customers that 
have left that are running on Linux, and they are in the crosshairs.”

It’s a scorched-earth tactic intended to either attach an SCO tax to 
each copy of Linux and reap the benefits, or obliterate it completely. 
The ethic sickens open-source software adherents who see it as their 
mission to develop democratic software, free of proprietary constraints 
and for the good of humanity.

Linus Torvalds is the embodiment of that movement. Tired of UNIXes that 
crashed on cue and wouldn’t run his software, Torvalds began work on 
Linux in 1991. A cult-hero to legions of open-source software 
followers, Torvalds freely admits the Linux kernel never could have 
popped into the dynamo it is today but for a dedicated bunch of 
anti-establishment programmers.

At the project’s inception, Torvalds sent out a call to arms to 
programmers interested in spawning an alternative to UNIX, which at the 
time had its code locked up in universities and corporations. The 
open-development model allowed hackers to modify and add to the kernel 
via computer terminals linked around the world, each new chunk of code 
enabling the next.

Contrary to proprietary software copyrights, which keep source code 
hidden, Linux code is distributed openly under a “copyleft,” better 
known as the GNU General Public License (GPL).

The GPL lets anyone tinker with Linux, as long as they include the 
source code if they sell or otherwise distribute the altered work. It’s 
the principle of “share, and share alike.” Today, 12 years later, only 
about 2 percent of the Linux kernel is code personally written by 
Torvalds. The rest has been contributed by a loosely organized network 
of developers: some working alone, others working on commercial Linux 
implementations for corporations. But Torvalds remains the gatekeeper. 
Nothing gets into the kernel without his approval.

It’s no surprise, then, that the usually mild-mannered Torvalds gets a 
tad steamed each time SCO repeats its mantra that he’s rearing a 
tainted baby.

“I have to say, [SCO’s claims] all look entirely bogus in every way,” 
Torvalds said by telephone from his home in Santa Clara, Calif. “Not 
only does it appear that SCO doesn’t even own the copyrights to UNIX at 
all … [b]ut further copyright claims that they made in public with 
regards to Linux have all been proved to be complete and utter 
garbage,” he said.

As Torvalds alluded, SCO isn’t the only software outfit claiming UNIX 
as its own. Novell has recently registered copyrights for some of the 
same UNIX code SCO is claiming. Industry analysts speculate it could be 
a monkey wrench in SCO’s legal cogs, since a judge likely wouldn’t rule 
on copyright violations where the ownership is in question. McBride, as 
ever, seems unfazed.

“[T]he ownership with Novell has absolutely been legally decided. We’ve 
got all the documents in front of us. Anybody who has any legal sense 
here says ‘I don’t get it, can Novell not read the English language?’” 
McBride said.

But Novell isn’t hedging. So confident that its UNIX rights trump 
SCO’s, Novell bought the world’s second-leading Linux distributor, 
SuSE, in a deal that solidified Novell’s commitment to open source. 
Novell went so far as to indemnify its SuSE Linux clients against any 
future SCO legal action. Barring such an indemnity, under the GPL, all 
Linux intellectual property liabilities reside with the end user.

McBride and company are quick to tout the warranty advantages of 
proprietary software over public systems like Linux. Ever since taking 
on IBM, SCO has persistently goaded Linux distributors to protect their 
end users by offering indemnification—that is, agreeing to foot the 
bill if some company, say SCO, sues for intellectual property 
violations. As recently as October, SCO spokesman Blake Stowell 
reiterated the talking point. “If IBM is so confident that Linux is 
free and clear, why don’t they indemnify their users against any 
lawsuit SCO could bring against them?” he asked.

That was then. Novell and Hewlett Packard (HP) have since announced 
that they will indemnify their Linux customers. However, McBride 
managed to spin the implications of those announcements 180 degrees to 
SCO’s favor. “By announcing the programme they are acknowledging the 
problems with Linux. Through the restrictions and the limitations on 
the programme, they are showing their unwillingness to bet very much on 
their position,” McBride told the online British technology magazine 
VNUnet.

In other words, regardless of whether other companies indemnify their 
customers against lawsuits, SCO sees itself as having the upper hand. 
Can SCO have it both ways?

It’s par for the SCO course, according to Torvalds. Take McBride’s 
contention that the GPL and Linux undermine business interests and 
possibly violate the U.S. Constitution’s Article One copyright 
provisions. In an open letter to the open-source community, McBride 
questioned the legality of the GPL, arguing that the Constitution 
intended a profit motive for copyright works.

“[T]hose who believe ‘software should be free’ cannot prevail against 
the U.S. Congress and voices of seven U.S. Supreme Court justices who 
believe that ‘the motive of profit is the engine that ensures the 
progress of science,’” McBride wrote.

Not mentioning the fact that SCO used the GPL to its advantage for 
years, Torvalds notes that U.S. copyright law explicitly regards 
“financial gain” to include the exchange of other copyright works—the 
share and share alike principle. As for the notion that Linux 
undermines business interests, Torvalds argues just the opposite.

“The GPL makes money by making infrastructure available and having an 
open competition in that infrastructure space,” he said. “I would liken 
the Linux kernel to the roadway system. It’s not necessarily generating 
money in itself. But everybody wants to maintain good roads, because 
having good roads is really important to having a flourishing business.

“So everybody is willing to chip in a bit. And the GPL … works on that 
principle, that if you have a lot of people willing to chip in a bit to 
the end result, it’s going to be much, much bigger than any of the 
individual contributors could have done alone.”

There must be something to the GPL, because to this day SCO bundles 
open-source software with its UNIX products. And SCO still collects on 
its interest in the UnitedLinux project, which is advertised on and can 
be linked from SCO’s website.

A great many of SCO’s claims revolve around interface values. Torvalds 
defines them as “universal constants and ways of interpreting numbers.” 
They are random numbers representing computer error codes, which have 
been established as international standards.

SCO claims it owns the UNIX interfaces. While McBride concedes that the 
interfaces are in the public domain, he says they are included in the 
Linux kernel without proper UNIX copyright notices. Those notices have 
been filed off, he said, violating SCO’s intellectual property rights.

Torvalds finds the argument laughable. “It’s like saying you own the 
letter ‘a’ because you’ve used it in your newspaper. It really boils 
down to almost that ridiculous,” he said.

Another gripe Torvalds has with McBride is that the Linux community has 
pleaded all along, ‘tell us what the code is, and if it doesn’t belong 
there, we’ll remove it.’

McBride says SCO has shown plenty. “They’re disingenuous on that or 
they would be ripping out the million lines of code we’ve already 
pointed to,” he said, adding that the violations are too far-reaching 
to simply rip out anyway. One million lines amounts to roughly 20 
percent of the entire Linux kernel. McBride says SCO revealed the 
offending code last August at its Las Vegas SCOForum. “Truly, and then 
they just ignored it,” he said.

If Torvalds is the head of Linux, then Bruce Perens is the mouth. 
Perens has worked closely with open-source software for years. Many of 
them spent with Pixar Animation Studios, where he participated in 
Hollywood’s migration to open-source technology. Today, most special 
effects houses run their shops on Linux. Since leaving Pixar in 1999, 
and HP in 2002—where he worked as the company’s Linux strategist—Perens 
has taken to the speaking circuit. He passes up few opportunities to 
publicly praise the virtues of open-source software, particularly 
Linux. If he can command a fee, he’ll take it. But usually, traveling 
expenses, room and board are enough to get Perens talking.

“We can write software faster than SCO … and if there’s ever a problem 
that we have to repair, we would have it repaired within a matter of 
weeks,” he said.

But so far, Perens sees nothing that would justify SCO’s claims, and no 
reason to clean up Linux. He ran a background check of sorts on the 
so-called incriminating code that McBride claims the Linux community 
ignored.

“The Las Vegas claims were especially indicative of a company that is 
either just making crazy accusations, or simply … don’t know what 
they’re saying,” Perens said.

SCO released the presentation to a reporter who passed it along to 
Perens for his opinion. Perens said it wasn’t tough to de-encrypt the 
Greek font SCO used to conceal the code snippets.

“When I analyzed their slide show, I found that one of the two pieces 
that they had claimed as their own, was actually created at Berkeley, 
at the university, using taxpayer funds,” Perens said. “And that was 
software the UNIX makers were encouraged to make use of … and SCO did … 
But SCO actually lost the copyright statement, so they didn’t know what 
they owned and didn’t [own]. Technically, they were infringing on 
Berkeley’s copyright, although I doubt Berkeley cares.”

The other piece of code Perens looked at was mistakenly placed into a 
Linux operating system distributed by Silicon Graphics Inc. A court 
case between AT& and BSD, the Berkeley UNIX developer, determined that 
particular chunk of code to be in the public domain, Perens said, 
adding that the code was removed because it was nonessential code, not 
because it violated SCO’s intellectual property rights.

And Perens isn’t shy when it comes to McBride’s contention that the GPL 
undermines business interests. “If Darl McBride had his way, he would 
have banned marriage too, because it obviously is against the 
remunerative interests of prostitutes,” he said. It seems that Torvalds 
coined the analogy first, but Perens says it much better. Share and 
share alike, right guys?

In a nutshell, Perens thinks McBride is all show.

“A long time ago, Mr. [Nikita] Kruschev came to the [United Nations], 
banged his shoe on a podium and said, ‘We will bury you,’ and that 
didn’t come to pass … Mr. Mcbride is no more cultured, and his threat 
is taken certainly much less seriously,” he said.

In fact, SCO retreated somewhat from its public table-pounding when it 
came time to argue the IBM case in front of a judge. Back in June, 
McBride told VNUnet that “going into pre-discovery, we have strong 
enough claims. We’d be fine to go to court just on what we have before 
discovery.”

However, McBride’s brother and SCO attorney, Kevin McBride, was less 
resolute during a Dec. 5 discovery hearing in Utah federal court.

“I want to walk the Court through enough of our complaint to help the 
Court understand that IBM clearly did contribute a lot of the 
Unix-related information into Linux. We just don’t know what it is,” 
Kevin McBride told the court, according to a transcript of the 
proceedings.

In that hearing, Judge Dale Kimball dealt SCO a legal setback. SCO was 
requesting that Kimball order IBM to turn over its source code so SCO 
could compare it against its own. But Kimball demurred, instead 
postponing the discovery process and ordering SCO to provide IBM with a 
detailed inventory of its claims, including specific references to the 
code IBM allegedly infringed, and a detailed lineage of each code 
chunk.

The Linux community has admitted all along that UNIX and Linux share 
common code. But without researching the lineage, there is no way of 
telling whether the code was illegally contributed.

On Jan. 13, SCO supplied IBM with the documentation. But detractors say 
the 60-page response is a bit light, considering the breadth of 
information SCO was supposed to fork over.

Make no mistake about it, says Darl McBride, SCO isn’t bluffing. “And 
anybody that says we don’t have any claims there, yes, I guess they 
will be going home with a sock in their mouth,” he said.

Besides a few industry analysts who attribute some merit to SCO’s 
claims, the undercurrent of SCO supporters has yet to take up arms 
alongside McBride. “The reason they’re silent is because if they stick 
their head up, they tend to get shot by a bunch of Linux people,” 
McBride said.

If SCO’s posturing is merely a campaign to spread FUD (fear, 
uncertainty, doubt) within the software world, Dax Kelson would be its 
target demographic. But the co-founder and president of Guru Labs, a 
Linux training provider, doesn’t seem too worried.

“I don’t think anyone in the IT world is sympathetic with SCO until 
they actually cough up some evidence,” he said.

Kelson’s company is a shining example of how businesses can thrive 
under the GPL infrastructure. Kelson and his team of Linux gurus teach 
Linux, mostly to corporate users, on about 25 Red Hat Linux boxes at 
the company’s Bountiful lab. Guru Labs runs on Red Hat’s Fedora 
distribution, a free downloadable version of Linux available on the 
company’s Website at www.rehat.com. With the Linux infrastructure in 
place, Kelson taps the emerging demand for Linux training and training 
manuals. Guru Labs fared well even through the dot-com dive, and is now 
looking to double its training force. To Kelson, SCO’s unfortunate 
Linux showing doesn’t prove the open-source model is broken.

“Just because one restaurant goes out of business, that doesn’t mean 
the restaurant industry as a whole is doomed, or that there is some 
problem with the restaurant business model,” he said.

Before starting Guru Labs, Kelson launched his own Internet service 
provider in 1996. The whole operation ran on open-source systems, 
without which, Kelson says, he never could have gotten the business off 
the ground. The now 28-year-old entrepreneur sold the startup in 1999 
for $2 million. Not bad for a college dropout.

A SCO tax on Linux would cost Kelson about $25,000, he estimates. He 
poses an interesting parallel with regard to the logic behind SCO’s 
attempts to shake loose licensing fees from Linux end users.

“Let’s say some reporter [for The Salt Lake Tribune] includes a 
copyrighted work in their story [without attribution],” Kelson said. 
“Do you go to all the subscribers of The Salt Lake Tribune and get the 
money … or do you go to The Salt Lake Tribune?”

Benjamin Choate—the pale-skinned Linux user out of Logan who takes 
issue with McBride’s tan—is less pragmatic than Kelson. When he’s not 
doing consulting work on Microsoft Windows systems, he’s reading up on 
Linux in hopes of one day defecting. As it stands, his Linux prowess is 
about the same as the average 17-year-old Windows geek, he says.

An unrepentant idealist, Choate understands that intellectual property 
intricacies have muddied the waters of the Linux-SCO debate. Still, he 
prefers to frame the controversy in ethical terms.

“I just wonder how they can do this and face themselves in the mirror,” 
he said. “Because, essentially, what it comes down to, is they want to 
charge abominable amounts of money for other people’s work.”

Choate isn’t a programmer, or a guru. He’s just a believer. And if, by 
some odd twist of fate McBride and SCO do succeed:

“He can have his kernel. He can do what he wants with it; probably 
nothing. And we’ll just start over from scratch. Because it’s not so 
much built around the Linux operating system and the kernel: It’s built 
around the idea of having high-quality software that is available to 
all, that can basically improve society as a whole,” he said.

Whether the appeal is to conscience or reason, there’s no penetrating 
McBride’s rock-solid message.

“You know, this is an epic battle that is going to reshape the 
definition of the computer operating system going forward,” he summed 
up in characteristic chest-thumping form.

When asked if he had any questions to pass along to McBride, Linus 
Torvalds chose to err on the side of caution. “The less I have to do 
with Darl McBride, the better off I am ... I don’t want for that 
‘Darlness’ to rub off on me.”