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Cyber Cynic: The Microsoft-SCO Connection


What is Microsoft really up to by licensing Unix from SCO for between 10 to 30 million dollars?

I think the answer’s quite simple: they want to hurt Linux. Anything that damages Linux’s reputation, which lending support to SCO’s Unix intellectual property claims does, is to Microsoft’s advantage. Mary Jo Foley, top reporter of Microsoft Watch agrees with me. She tells me, “This is just Microsoft making sure the Linux waters get muddier They are doing this to hurt Linux and keep customers off balance. Eric Raymond, president of the Open Source Initative agrees and adds “Any money they (Microsoft) give SCO helps SCO hurt Linux. I think it’s that simple.”Dan Kusnetzky, IDC vice president for system software research, also believes that Microsoft winning can be the only sure result from SCO’s legal maneuvering. But, he also thinks that whether SCO wins, loses, or draws, Microsoft will get blamed for SCO’s actions.

He’s right. People are already accusing Microsoft of bankrolling SCO’s attacks on IBM and Linux.

But is there more to it? Is Microsoft actually in cahoots with SCO? I don’t think so. Before this deal, both SCO and Caldera have had long, rancorous histories with Microsoft

While Microsoft certainly benefits from any doubt thrown Linux’s way, despite rumors to the contrary Microsoft no longer owns any share of SCO and hasn’t for years. In fact, Microsoft’s last official dealing with Caldera/SCO was in early January 2000, when Microsoft paid approximately $60 million to Caldera to settle Caldera’s claims that Microsoft had tried to destroy DR-DOS. While Microsoft never admitted to wrong-doing, the pay-off speaks louder than words.

The deal didn’t make SCO/Caldera feel any kinder towards Microsoft. A typical example of SCO’s view of Microsoft until recently can be found in the title of such marketing white papers as “Caldera vs. Microsoft: Attacking the Soft Underbelly” from February 2002.

Historically, Microsoft licensed the Unix code from AT&T in 1980 to make its own version of Unix: Xenix. At the time, the plan was that Xenix would be Microsoft’s 16-bit operating system. Microsoft quickly found they couldn’t do it on their own, and so started work with what was then a small Unix porting company, SCO. By 1983, SCO XENIX System V had arrived for 8086 and 8088 chips and both companies were marketing it.

It didn’t take long though for Microsoft to decide that Xenix wasn’t for them. In 1984, the combination of AT&T licensing fees and the rise of MS-DOS, made Microsoft decide to start moving out of the Unix business.

Microsoft and SCO were far from done with each other yet though. By 1988, Microsoft and IBM were at loggerheads over the next generation of operating systems: OS/2 and Unix. Microsoft saw IBM’s support of the Open Software Foundation (OSF), an attempt to come up with a common AIX-based Unix to battle the alliance of AT&T and Sun, which was to lead to Solaris.

Microsoft saw this as working against their plans for IBM and Microsoft’s joint operating system project, OS/2 and their own plans for Windows. Microsoft thought briefly about joining the OSF, but decided not to. Instead Bill Gates and company hedged their operating systems bets by buying about 16% of SCO, an OSF member, in March 1989

In January 2000, Microsoft finally divested the last of their SCO stock. Even before Caldera bought out SCO though in August 2000, Microsoft and SCO continued to fight with each other. The last such battle was in 1997, when they finally settled a squabble over European Xenix technology royalties that SCO had been paying Microsoft since the 80s.

Despite their long, bad history, no one calling the shots in today’s SCO has anything to do with either the old SCO or Caldera. I also though think that there hasn’t been enough time for SCO and Microsoft to cuddle up close enough for joint efforts against IBM and Linux.

I also think that it’s doubtful that Microsoft would buy SCO with the hopes of launching licensing and legal battles against IBM, Sun and the Linux companies. They’re still too close to their own monopoly trials. Remember, even though they ended up only being slapped on the wrist, they did lose the trial. Buying the ability to attack their rivals’ operating systems could only give Microsoft a world of hurt.

Besides, as Eric Raymond in the Open Source Initiative’s position paper on SCO vs. IBM and Bruce Perens’ “The FUD War against Linux,” point out, it’s not like SCO has a great case.

Indeed, as Perens told me the other day, in addition to all the points that has already been made about SCO’s weak case, SCO made most 16-bit Unix and 32V Unix source code freely available. To be precise, on January 23, 2002, Caldera wrote, “Caldera International, Inc. hereby grants a fee free license that includes the rights use, modify and distribute this named source code, including creating derived binary products created from the source code.” Although not mentioned by name, the letter seems to me to put these operating systems under the BSD license. While System III and System V code are specifically not included, it certainly makes SCO’s case even murkier.

SCO has since taken down its own ‘Ancient Unix’ source code site, but the code and the letter remain available at many mirror sites.

Given all this, I think Microsoft has done all they’re going to do with SCO. They’ve helped spread more FUD for a minimal investment. To try more could only entangle them in further legal problems. No, SCO alone is responsible for our current Unix/Linux situation and alone SCO will have to face its day in court.

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