Gartner Recommends Holding Onto The SCO Money

benploni writes "George Weiss of Gartner has published a paper with some interesting recommendations regarding SCO. They include 1) Keep a low profile and do not divulge details on Linux deployments. 2) Until a judgment in a case would unequivocally warrant it, Linux users should not pay SCO the license fees it has asked for to settle its allegations of infringement of intellectual property rights. 3) Do not permit SCO to audit your premises without legal authorization. 4) For customers of SCO Open Server and UnixWare, an unfavorable judgment could cause SCO to cease operations or sell itself. That could harm future support and maintenance. Just in case, prepare a plan for migrating to another platform within two years. There's more, but are the analysts finally catching on?"

Slow learners

[shystershep]

We believe that these moves compromise SCO's mission as a software company.

No news here if you've been keeping up the story on /., but some good points -- although most are common sense. I knew analysts weren't all that bright or quick on the uptake, but it looks like they eventually do get there sometimes. But what I can't figure out is why they think SCO is a software company . . .

"software company"

[siskbc]

But what I can't figure out is why they think SCO is a software company . . .

Analysts are required to maintain some degree of objectivity and avoid controversial statements. That said, if you read between the lines, he basically said just what we've all been saying.

From Gartner:

We believe that these moves compromise SCO's mission as a software company.

If he thought SCO was still a software company, he would have said "We believe that these moves compromise SCO's ability to remain profitable." He's stating, quite clearly, that because these moves make it impossible to remain profitable as a software company, they only make sense for SCO as a litigation manufacturing company. In other words, they're changing their "mission," as he puts it.

He can't say that SCO are a bunch of litigation-happy jackasses that deserve to be sued into the stone age (at least in print). But he can, and did, say things that readers can translate as such.

All in all, it sounds like he completely gets it, if you read between the lines a tad.

Re:"software company"

[Artifakt]

This is a great example of how to read an analysis. Anyone who invests in the market needs to know this sort of thing before they get in over their heads. Good, professional people, knowing that their words can have an impact beyond their face value, will be careful to say only what they can back up. Your 'warning' that the stock's a turkey is never going to be a simple "Don't buy this Turkey!".
About the clearest I've seen was "While X claims to have resolved all major old contract disputes, the state wherein X is incorporated allows a full year for filing appeals." (Meaning they have been in court a lot in just the last fiscal year, and It looks like there's a good chance things aren't as resolved as they say. If you don't have the sense to check in detail to see just what the company considers a "minor" dispute, and whether any of the "major" ones ARE filing an appeal, you should not invest in stocks.) Most warning signs are subtler than that example.

Re:"software company"

[beowulf405]

I think the comment that they aren't a software company anymore is very much to the point. If SCO wins they will get paid for each copy of Linux in use. Why continue to develop and sell SCO Unix? If I was using SCO's products I'd be planning on to change on the assumption they won't be supported any more win or lose.

Software Company? Got jobs?

[geekmetal]

After reading the article I wondered if they had any software job openings posted on their website, take a look at the one Software Engineer [sco.com] job they have open.

Re:Software Company? Got jobs?

[XO]

I love how they are looking for "7+ years of web technologies experience"... Has the web passed it's 7th birthday yet?

If it has, not by much...

Re:Software Company? Got jobs?

[Zeinfeld]

I love how they are looking for "7+ years of web technologies experience"... Has the web passed it's 7th birthday yet?

I have eleven years experience. The first public demonstration of the Web was in Annecy in 1992.

Re:Slow learners

[BigRedFish]

In summary:

• Don't pay invoices presented by companies with whom you have no business, unless/until legally compelled to do so by a court.
• Do not consent to a search of your home/business, especially by a private entity, unless/until compelled to do so by court order.

Thanks, Gartner. That's the kind of hard-hitting, insightful business advice we need in this management-by-Ziff-Davis world. Maybe next month they can do a helpful piece on not paying a parking ticket until you've been issued one, and then only if it was issued by a real Dept. of Traffic officer, and not some homeless guy who wrote the citation on a napkin.

Re:Slow learners

[benploni]

Sure, it's blindingly obvious to techies. But they are not the consumers of Gartner's research. The real effect of this "research note" will be to SCOX:US's stock price - and that's a good thing.

Re:Slow learners

[benploni]

I understand where you are coming from, but you're missing some things. For example, Darl's employment contract, and the Bay Star Capital contract. They both have provisions for severe consequences if SCOX:US falls below a set price. It will almost certainly put SCO in bankruptcy.

Re:Slow learners

[fermion]

It should be obvious not to pay invoices when no product or service has been requested, and not to allow searches unless legally required, but look at the recent reality. Customers are increasingly caving in to increasingly intrusive demands, and vendors are asking for powers once reserved for federal law enforcement. MS wants to compel customers to upgrade on a yearly basis or pay large fees as punishment. Music labels want the ability to destroy physical property on the suspicion of civil violations of their rights. I think in this reality it is quite necessary for a firm with some merit to come out say just don't do it.

Red Herrings Eat Profits

[dolo666]

"Just in case, prepare a plan for migrating to another platform within two years."

Maybe once the plans to migrate are prepared fully, smart employees will push for migration citing the existing contingency plans as existing (hey, we planned to move in 2003), and show how cheaper/better life could be without the SCO. At least with that plan, even the most obtuse managers would see the truth.

Funny how the legal fees of a legal aggressor company like SCO prove that overextending yourself is a bad business model. They're like Rome! But at least they are setting the bad example, so that other businesses with money won't dare go after the Open Source community so readily next time around. I say it looks like we are proving ourselves to the traditional red herring pundits.

IANAL, but wouldn't it be wise for everyone to just wait out the SCO? They are doing their damndest to ruin their own business reputation, so the rest isn't far off anyway. I mean it's obvious, right?

Re:Red Herrings Eat Profits

[EvilTwinSkippy]

Remember though, we had a few 800 pound gorillas in the form of IBM and Novell.

Far more Earth shattering was the USL vs. BSD lawsuit. BSD went from being on the ropes to routing USL badly. Rumors are that part of the sealed evidence showed the much of Unix was actually lifted from BSD. Especially impressive because it was pretty much Berkley defending itself. There were no industry players coming to bat.

Re:Red Herrings Eat Profits

[jimfrost]

Rumors are that part of the sealed evidence showed the much of Unix was actually lifted from BSD.

I think the quote was, "as much as 50%." There is a hell of a lot of BSD in SVR4. That certainly seems to have pushed them to a fast settlement (and they got off cheap!) but there were a variety of other things that probably would have shot them down too -- many of which are still going to be true in a case against Linux.

One of the primary issues, not decided by the judge but hinted strongly at, is that 32V may actually be in the public domain. In that light the decision to put it out under a BSD license was a kind of damage control; if it's out under a loose license then most likely no one will test the validity of the original copyright in court.

This case may well reopen that can of worms seeing as the only case of obvious copying they've pointed out is rooted in 32V.

I rather hope that IBM is doing/has done its own code commonality inspections because it seems highly likely that there is GPLed code in SCO's product (that's the easy way to compatibility you know). If so that would tarnish their case badly, although it's not very likely to be as damning as it was in the BSD case.

One of the things I find most amusing about their claims of open source being lax on IP protection is that it's been my experience that code pilfering is quite common in closed source projects. Certainly we know it happened at least twice in the history of SysV -- once wholesale in SVR4, and again in R5. And I would suspect it happened again when Caldera implemented Linux compatibility.

I kind of hope IBM or some other SCO source licensee does their own code analysis. My bet is that there are many more lines of code pilfered from open source in SCO stuff than vice versa. SCO is really only getting huge infringement numbers by counting whole subsystems as infringing, using theories of "derivative" that are unlikely to hold up.

Go take a look at the BSD lawsuit papers (various links posted around the net). The judge's opinion where he denied the preliminary injunction against BSDI is really quite remarkable.

Re:Red Herrings Eat Profits

[platypus]

I rather hope that IBM is doing/has done its own code commonality inspections because it seems highly likely that there is GPLed code in SCO's product (that's the easy way to compatibility you know). If so that would tarnish their case badly, although it's not very likely to be as damning as it was in the BSD case.

Surely IBM has inspected the code! IBM and it's lawyers have acted completely clever in this case until now, do you really think they would forget the obvious?
I would be very surprised if IBM hadn't left a lot of aces in their sleeves. Look, they haven't made a lot of noise until now, but everything action of IBM agaist SCO was _extremely_ well dosed. If IBM really felt threatened, they would have a lot of alternatives. They could have bought SCO, they even could have bought Canopy, they could have threatened SCO and/or Canopy with patent lawsuits against them or companies they have a stake in (might still happen, hehe).
They didn't do anything like that, instead they go into a lawsuit, well prepared, and acting like someone who knows he will win.

Re:Red Herrings Eat Profits

[Charlotte]

Go take a look at the BSD lawsuit papers (various links posted around the net). The judge's opinion where he denied the preliminary injunction against BSDI is really quite remarkable.

I went out to look for the ruling and found a link here [ekkobsd.org].

I especially liked this part, after the ruling on the preliminary injunction (which was denied):

After reviewing the affidavits of Plaintiff's and Defendants, experts, a great deal of incertainty remains as to what trade secrets Net2 might contain. One fact does seem

Re:Red Herrings Eat Profits

[Anonymous Coward]

overextending yourself is a bad business model. They're like Rome!

The crucial difference here is that Rome was, at one time during its history, feared and respected.

Re:Red Herrings Eat Profits

[gnu-generation-one]

"Just in case, prepare a plan for migrating to another platform within two years."

Why do they need top publish this advice on a website? Can't they just email SCO's last remaining customer directly?

Why wait?

[i_want_you_to_throw_]

Just in case, prepare a plan for migrating to another platform within two years.

Why wait? Migrate now to something less controversial. Really though, this is a well done paper and really explains it well. Gartner goes into the real dollar concerns of this litigation.

Linux is a commodity and as such can be provided by many companies. RedHat has pretty good support , flames of hellfire not withstanding their decision to go only enterprise. Then again if you're using SCO you're an enterprise anyway.

Re:Why wait?

[DarkBlackFox]

What would be considered less controversial? With SCO as the center, they seem to have roped Linux and now BSD into the controversy. Migrating from Unix to Linux wouldn't be a bad idea, but it wouldn't clear you from controversy- on the contrary, if you are an existing customer of SCO and they find you moving away, wouldn't that be more incentive for them to slap you with an invoice for the "infringing linux" deployment?

Of course, it is important to migrate off a sinking bohemoth of a ship, but I doubt it would be any less contraversial given the players involved.

Re:Why wait?

[pmz]

What would be considered less controversial?

Well, there's controversy and there's risk. Any company can fold at any time (e.g., meteor hitting their headquarters), for example. As far as SCO is concerned, risk might be weighed by which companies are willing to take the heat for their customers. Is there another "indemnified" OS other than Solaris (permanent license) or, perhaps, Mac OS X (Mach kernel)? Even Windows NT/2000/XP could be a target with their known use of BSD code.

Regardless, I think any lawsuit against Linux/BSD/UNIX/Apple/Microsoft/etc. could only go in SCO's favor due to a rediculous technicality, not real merit. And, if that happened, there would be no end to the bitterness felt towards SCO, which would do wonders for destroying whatever business they try to conduct after the suit.

In conclusion, if SCO loses, they lose, and, f SCO wins, they lose.

Re:Why wait?

[YOU LIKEWISE FAIL IT]

company can fold at any time (e.g., meteor hitting their headquarters), for example.

The solution is clear - RAICHS: Redundant Arrays of Inexpensive Corporate Headquarters. Which slashdotter will be first to market with this exciting technology?!

YLFI

Re:Why wait?

[YOU LIKEWISE FAIL IT]

This is funny actually. Back, two or three years ago, I was working for a SCO house, and we switched our systems away from SCO/Terminals to some ancient version of Redhat to make our offering ( Point of sale software ) more price competitive.

At the time people were saying buying SCO was a writeoff - for most of the stuff people were doing with it, it was too expensive and offered too few advantages over the competition. Pretty much the best thing you got was a plaque saying you were a SCO Preferred Supplier. Glad we got out [1] before someone put a pack of rabid hyenas on the SCO business strategy team.

YLFI

[1] Actually, I'd be quite happy to have seen that place be shot into the sun, so maybe I'm not so glad.

Re:Why wait?

[pyros]

Why tell them anything?

So that they know, in no uncertain terms, that such conduct is unacceptable and is costing them your business. Tell them, professionally, that you consider their actions to be unethical, and as a result are taking your business elsewhere, and recommending to all clients, peers, and friends to avoid SCO products. Make no mention of technical quality or value of SCO products. Leave no question that you can't do business with a company willing to make baseless claims affecting other com

Re:Why wait?

[bahamat]

Why wait? Migrate

Because of the choices.
Linux - bad, pending litigation
SCO UNIX - bad, company may fold
Solaris - expensive
AIX - expensive
HP-UX - expensive
Windows - expensive, bugs, security nightmare
[Free|Open|Net]BSD - free, legally clear due to BSD/USL settlement

Possibly, the best alternative to Linux is *BSD. The problem is that BSD doesn't get nearly as much support from comercial vendors (Oracle, etc.). If this support is necessary for any particular installation the choices are to wait or to use Solaris/HP-UX.

Re:Why wait?

[Xenographic]

[Free|Open|Net]BSD - free, legally clear due to BSD/USL settlement
-----

No, SCO is going after *BSD next, according to some of the things they've said (look at some of the recent articles here and on Groklaw.net)

Granted, I don't seriously think, in my personal oppinion, that they have any sort of case whatsoever concerning that. But they do probably intend to go after *BSD simply because all of "their" code that's in Linux is BSD-derived, as far as we can see. Thus, if they can find some way to convince

Re:Why wait?

[Newspimp]

Wang VSOS 7.53 seems to be very non controversial. I bet users could get great deals on ProDOS 3.3 for Apple ][. Maybe there are even a few copies of OS/2 3.1 hanging around somewhere? As long as we're at it, I haven't heard a single litigious thing from CP/M lately. Let's use that!

How do I apply?

[Chewie]

Man, I want a job at the Gartner group. It seems their methods go something like:

1) Something happens
2) Side with big business and release a paper
3) Wait until popular tide changes
4) Release new paper contradicting old one.

Shit, I could do that all day. Sign me up!

That's exactly why many call them anal-ysts

[melted]

'cause they don't know jack shit! We once had Gartner do market analysis for us, and when the guy came over to present it, a couple of his pie charts showed wrong percentages. The percentages he had on his slides were adding up to something like 112%, not 100. Of course he got caught and laughed at. We haven't used their services since then. :0) Our management can pull better numbers out of their ass.

Re:That's exactly why many call them anal-ysts

[Otter]

My favorite part is when they proclaim that something will occur (probability 0.72). As if they've done extensive Monte Carlo simulations to determine such a precise number instead of pulling decimal places out of their butts.

Re:That's exactly why many call them anal-ysts

[DarkSarin]

You obviously know nothing regarding categorical variables, which is what pie charts are used for (as are several of the more common statistical analyses). IF you are going to say X % of folks use linux,and y% use windows, you had better have a category for z % who use both, and w% who use neither (and probably a% for those who use apple).

A categorical variable is considered discrete--on or the other, NEVER both. The most common example of this is biological gender. You are male or female, NOT both. Although recently it has become possible to change which you are.

Re:That's exactly why many call them anal-ysts

[El]

You are male or female, NOT both.

Bad example. Some people really are born both, although the number is small enough so as to be statistically insignificant. There are a lot fewer categorical variables than you think -- in real life, variances usually occur in a continuous spectrum. Classifiation is a delusion invented by scientists as an expedient; don't be fooled into thinking it accurately mirrors the real world.

Re:How do I apply?

[chill]

Man, I want a job at the Gartner group. It seems their methods go something like:

1) Something happens
2) Side with big business and release a paper
3) Wait until popular tide changes
4) Release new paper contradicting old one.

Shit, I could do that all day. Sign me up!

It wouldn't surprise me if you were now sued for a DMCA violation -- reverse engineering their business practice!

Consultants like Gartner Group...

[bs_02_06_02]

All consultants do this. They take money from companies like Microsoft, Sun, Oracle and publish reports allowing a lot of spin for their customer. The companies can then use these reports as PR. Consultants lose crebility because of that behavior.

Consultants crave credibility. They come back with freebies like this one, touting their ability to consolidate a large amount of information. There's nothing earth shattering there, but the rest of the world will suddenly think, "Whew. The cat is out of th

Now that's a U-Turn

[Space cowboy]

... complete with handbrake squeals. Is it just me, or does Gartner appear to just write what they think will go down well, rather than really analyse things.

Of course, we like it when it agrees with what we think (and I think they're right to say what they're saying now, but that just makes me no different from (m)any of you reading this :-)

Simon

Re:Now that's a U-Turn

[Zapman]

I'm with a previous poster. I'd love to work as an analyst for Gartner, GIGA, etc. That'd rock.

Short version of how these companies operate:

1) Listen to geeks to figure out what's popular and new
2) push 'new' ideas as the salvation of computing kind
3) write papers, and sell these opinions for insane ammounts of money
4) proffit!
5) Every year or so, get together with your big $$ clients, and have a huge party in some place cool (according to my co-workers, the party Giga threw in Las Vegas was something to behold)

Re:Now that's a U-Turn

[MoonFog]

This paper at least seems like it was put together to draw some attention to themselves. It doesn't really say anything that hasn't been said before.
It tells you to wait and see what happens if you are or want to be a Linux customer and have a backup plan in case SCO wins, and it says to wait if you are or want to be a SCO customer, and have a backup plan if SCO loose..
Basically, it could be said with the simple words "Just wait for the whole thing to end"

Shhh.....

[DaRat]

Elmer Fudd: "Be vary vary quiet. We're deploying Linux!"

Re:Shhh.....

[shystershep]

I'm sorry sir, could you spell your last name for me again? Was that F-u-d-d, or F-U-D?

Re:Shhh.....

[IntelliTubbie]

So if Elmer Fudd used Lindows, would he call it "Windows"? That wascally wabbit ...

Cheers,
IT

Register.co.uk says:

[KamuSan]

We reveal major UNIX(TM) IP violations

Caldera released UNIX source code back in 2002.
http://www.theregister.co.uk/content/4/3410 2.html

Re:Register.co.uk says:

[KamuSan]

Corroberation from O'Reilly: http://linux.oreillynet.com/pub/a/linux/2002/02/2 8 /caldera.html Why Caldera Released Unix: A Brief History [..] Things do tend to come full circle. It was Caldera that, on January 23 of this year, disencumbered the entire source code of Unix, up to and including the Seventh Edition (1979) and its VAX port "32V" from which BSD had started the development that led to 4.0BSD. (32V is basically V7, minus some bits that were written in the PDP-11 assembly language, and the remaind

Sorry NASA

[grub]

Keep a low profile and do not divulge details on Linux deployments.

Too bad NASA didn't read that advice. [slashdot.org] :)

Change your TCP/IP fingerprint

[hedley]

If you really want to hide (some who don't want
the hassle do). Then change the fingerprint on
the stack to show up as Win2k or equivalent.

When SCO does its IP addr sweep, you will be passed over.

Re:Change your TCP/IP fingerprint

[silentbozo]

Anyone have any details on how to do this? I've got some systems that I'd like to cloak as classic MacOS machines to discourage script kiddies from poking at them. They're already locked down, but I figure the more indirection I can throw out, the more likely that they'll go off and bother some other poor sod.

Re:Change your TCP/IP fingerprint

[the_mad_poster]

Yup. [somoslopeor.com]

Re:Change your TCP/IP fingerprint

[EvilTwinSkippy]

Heck, why not make it look like an System/360 or a DEC. If you are going for deception, make it original.

Re:Change your TCP/IP fingerprint

[UnknowingFool]

Great idea. Let's see some hacker try to figure out how to break into my Commodore 64:

POKE 63452
POKE 63451
POKE 63450
. . .

Re:Change your TCP/IP fingerprint

[crawling_chaos]

For the longest time I had Konqueror reporting that I was browsing using Mosaic .01A on a Coleco Adam. Used to drive our webmaster nuts when he ran the user agent reports for the month.

Re:Change your TCP/IP fingerprint

[Chibi Merrow]

So it's kind've like painting goat's blood over your door...

I don't know, I just can't see McBride as the angel of death.

Re:Change your TCP/IP fingerprint

[EvilTwinSkippy]

More like a snow-angel of slightly bad day.

Re:Change your TCP/IP fingerprint

[KrispyKringle]

Why is this marked Interesting? It should be marked Inane or Silly.

SCO won't be doing address sweeps. The information gained from a TCp/IP fingerprint isn't nearly reliable enough to use to subpeona information on software usage. Doing the fingerprints, however, is arguably illegal in some states and violates the AUPs of many ISPs (though I don't personally think it should).

More to the point, as SCO themselves have said, they will be going after big companies known to have large Linux deployments. In other words, Fortune 500 customers of RedHat and SuSE. They said themselves they won't be suing private users.

Yes. I know SCO are The Devil. But cut me a fucking break. This is why I read the comments on Slashdot less and less. I get to see a few insightful points, a lot of garbage along the lines of `see how much I know' and random, weird comments like this.

Re:Change your TCP/IP fingerprint

[ducomputergeek]

This is a really good idea for anyone running boxes. Although, I've seen some idiots do this with Windows systems like walmart that runs Solaris 8 with MS IIS 5. Forget iTunes, hell really would have to freeze over for that server combo to happen.

The easiest to cloak is apache because it runs on just about anything. I've seen some sites say they are a PlayStation 2 with apache.

We bait our honeypots with OpenBSD boxes that state they are Windows running apache (which isn't too uncommon, I know a lot t

Re:Change your TCP/IP fingerprint

[zurab]

Yeah, that's a good idea ... until ...

What happens when Microsoft does its IP address sweep? They will see you are running Win2k, determine who you are, that you don't have a license; then they will have to bring in the BSA with U.S. Marshalls in and force you to pay up and run their spyware on your network at your own cost.

They will even have compelling evidence you have been running Win2k and you won't be able to produce any licenses for that OS. Unless, you would be OK with getting sued and dragged int

Harm

[Anonymous Coward]

SCO is obviously causing harm with its threats, and people should request an immediate judgement, requiring SCO to submit enough evidence to be successful or face a ruling to the contrary. Then, the evidence would be as simple to get as requesting them from the court. Then, the infractions could be removed from linux (this assuming there actually were any...) to prevent further violation of sco's copyright.

Oh really?

[zonix]

You mean the same Gartner Group that recommended people to halt Linux deployment because of all the SCUD (SCO FUD)?

Wait a minute ... no, no, none of this adds up at all! :-)

z

Crying in his Jello

[BubbaTheBarbarian]

Remember Rambus v. World? The same thing happened to them. They tried to sue the world, and lost. In middle of it, Gartner said basically the same thing.

This is a HUGE blow to SCO, to have as respected a group as Gartner say these things about the case. They have basically had all of what they have done over the past 6 months ripped out. No one will pay them for nothing, and even worse, they now have the real possibility of losing alot of their current customers.

Is this why IBM has been so quiet?

Duhryl must be crying in his Jello salad today.

Thank you for comming! See you in hell!

(this post not worth spell checking)

Re:Crying in his Jello

[Anonymous Coward]

We DO NOT want SCO to turn out like Rambus. For chrissakes, just take a look
at the chart [marketwatch.com]. The company is doing very very very well after WINNING the lawsuits.

Re:Crying in his Jello

[silicon not in the v]

I have a vested interest in this analogy since my company is in one of the Rambus lawsuits. They are going to take a while to play out to the bitter end, but there has been quite a bit of back and forth in them. I think they are currently looking good from their most recent appeal, but there are still cases ongoing with multiple companies. Rambus, at least, unlike SCO are still able to continue with their real business instead of just becoming a litigation factory. They were originally convicted of frau [theinquirer.net]

Don't they realize that will severely ...

[burgburgburg]

hamper Darl and David's attempts to confuse the investing public into thinking that there is some validity to their claims, thus allowing them to continue to unload their massively overvalued shares? How will Canopy continue to use the overinflated valuation of SCOX to play their shell games and shuffle the monies around (eventually with them ending up in their pockets, of course)?

How utterly irresponsible of Gartner! No consulting contracts for them!

Article Text

[Anonymous Coward]

Event

On 18 November 2003, SCO announced that it would pay $1 million and issue shares worth $7.95 million to Boies, Schiller & Flexner. This law firm represents SCO in its lawsuits against companies using Linux in alleged violation of SCO's intellectual property rights

First Take

Mounting financial pressures have forced SCO to find alternatives to pay Boies, Schiller & Flexner. SCO not only faces the litigation against IBM (scheduled for April 2005) but must also defend counterclaims by Red Hat and IBM. Moreover, after threatening 1,500 Linux users for infringing its intellectual property rights, SCO has declared that within 90 days (or by about February 2004) it will start litigation against one or more Fortune 500 companies with large Linux installations.

SCO has declared in filings with the U.S. Securities and Exchange Commission that its competitive position could decline if the company can't obtain additional financing. The latest share issue will dilute shareholders' investments about 3.5 percent. It comes on top of a previously announced arrangement giving Boies, Schiller & Flexner a 20-percent share in SCO if the company were sold. SCO also received an investment of $50 million from BayStar Capital in return for 17.5 percent of outstanding shares. We believe that these moves compromise SCO's mission as a software company. Increasingly, the legal and financial aspects of the intellectual property infringement cases will absorb the company's attention, and a law firm will be in an increasingly powerful position to set the overall agenda for its compensation. Therefore, SCO will likely pursue claims against Linux users quickly. Its degree of success will determine the vendor's financial health.

Recommendations:

• Keep a low profile and do not divulge details on Linux deployments.
• Until a judgment in a case would unequivocally warrant it, Linux users should not pay SCO the license fees it has asked for to settle its allegations of infringement of intellectual property rights.
• Do not permit SCO to audit your premises without legal authorization.
• Your legal counsel should monitor developments and understand the infringement claims.
• Pressure high-profile Linux vendors to contractually guarantee against infringement claims by covering court costs. Evaluate Hewlett-Packard's willingness to indemnify Linux customers.
• Fence off the innocuous Linux deployments (such as network-edge solutions) from the performance-intensive ones. Where feasible, delay deployment of high-performance systems until the end of 1Q04 to see what SCO will do.
• If high-performance Linux systems are in production, develop plans that would enable a quick changeover in case SCO wins a favorable judgment and requires the Linux kernel code to be substantially changed. Unix systems are the best alternatives.
• For customers of SCO Open Server and UnixWare, an unfavorable judgment could cause SCO to cease operations or sell itself. That could harm future support and maintenance. Just in case, prepare a plan for migrating to another platform within two years.

Analytical Source: George Weiss, Gartner Research

Recommended Reading and Related Research

• "HP and Linux Users Will Benefit From Legal Indemnity Offer" -- The offer to pay the legal expenses of Linux customers sued by SCO for infringing its intellectual-property rights sets Hewlett-Packard apart from other major vendors. By George Weiss
• "IBM, Red Hat Lawsuits Will Put Financial Pressure on SCO" -- Enterprises with large future Linux commitments should avoid paying SCO's server license fees because they appear arbitrarily high, represent a concession to SCO's claims and will expose the customers to ever-larger license fees. By George Weiss

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BSD was in SCO UNIX?

[eddy]

Check this out:

"Next up: Former SCO employee Jack Craig, now an SDK support engineer at another software company.

[...] While it was later excised and replaced with UDI code, I wonder how the world would take the news that SCO/Caldera paid a contract house in San Jose over $150,000 to port the NetBSD USB stack to osr5! They sure don't mind stealing open source when it suites them!" -- article here [newsforge.com]

This should be researched. McBride has been very admant that it doesn't matter if his imagined IP is removed from GNU/Linux, there price must be paid. Surely then his amazing legal understanding must be extended to his own company, in which case SCO could be a veritable GOLDMINE for the BSD Developers.

Re:BSD was in SCO UNIX?

[dougmc]

... to port the NetBSD USB stack to osr5! They sure don't mind stealing open source when it suites them!

To be fair, the BSD license permits this. Is it really stealing if you accept something that somebody else gives you?

(Also, Microsoft has been accused of the same thing -- using *BSD code in their products. And as far as I can tell, this accusation is completely true -- but irrelevant, because it's not illegal or even `wrong'.)

I've always wondered why people who make embedded devices like WAPs and the like chose Linux rather than *BSD -- with BSD they don't have the GPL requirements to open up the source. If you intend to give out the source, fine -- use Linux -- but if you don't, it seems to be that one of the BSDs would be a better choice.

Re:BSD was in SCO UNIX?

[KrispyKringle]

I had the fortune to hear the CTO of RedHat give a speech. Afterwords, over refreshments (mmm...donuts), I asked him about this. `Why isn't it RedHat BSD?'

He said partly it was historical accident, but that there is also a good reason. He said something like, `Well, look at it this way. IBM recently pledged $1,000,000 to Linux (though where that money is I can't say). With Linux, we know that whatever they put into it will come back out. But if it were BSD, nothing would stop IBM from putting that money into BSD and making ``BSD+'' and not releasing the code. Here, we know we can benefit from what others put in without them closing it off.' I had to admit this was a pretty good point. To guys like you and me, it seems as if the companies get nothing out of it. But to the companies, the hard work of independent developers is just as important as their hard work is to us.

BSD in Windows is a big deal

[Spamalamadingdong]

To be fair, the BSD license permits this. Is it really stealing if you accept something that somebody else gives you?

(Also, Microsoft has been accused of the same thing -- using *BSD code in their products. And as far as I can tell, this accusation is completely true -- but irrelevant, because it's not illegal or even `wrong'.)

No, and yes. The user (whether SCO or M$) has no legal obligation, and thus can't be legally accused of stealing anything. However, on the moral level it's otherwise. Both SCO and Microsoft are trying to crush all competition in their respective niches, and their use of the same free software that they are trying to get rid of is grossly hypocritical.

This is why the GPL is better for the world than the BSD license; it prevents attempts to take the commons private, and allows much more rapid advancement of the useful arts. (If you think having to work around a minefield of patent rights is a problem for software, consider that patents expire 5 times sooner than copyrights do.)

Re:BSD was in SCO UNIX?

[joe_bruin]

i work at a company that makes embedded devices using linux, and i'll tell you why.
the real advantage is that we give up relatively little. sure, we have to give out the kernel source, but it's not like we ever owned that in the first place. we have to share most of our custom driver code, which arguably has some value, but we make our money selling hardware, not writing drivers. the advantage, however, is that we can grab patches and drivers from dozens of other companies that use the same cpu/flash/dac/video chip/... as we do. the gpl forces everyone to share their code, so we can take advantage of work done by other companies (and they can benefit from ours). for the "cost" of giving out a bit of our in-house code, we get the benefit of using the code from all those other companies for free.
while i'm a big supporter of the bsd license, there's no way all these companies (many of them our competitors) would release this code if they didn't have to, and our work would be much harder.

Re:BSD was in SCO UNIX?

[GOD_ALMIGHTY]

Surely then his amazing legal understanding must be extended to his own company, in which case SCO could be a veritable GOLDMINE for the BSD Developers.

The BSD license allows this. This is also the reason many OSS developers prefer the LGPL or GPL to BSD and Artistic licenses. The BSD is a free-market radical/libertarian's wet dream, but the GPL and LGPL constitute a steal all you want but give back approach.

The various BSD teams are fully aware of what people can do with their code and only care if someone else claims copyright over code they wrote. If SCO used BSD code, the OSS community gets nothing, if they had used GPL'd code, the copyright owner (possibly the FSF) could demand everything opened or the code removed plus damages. Under the LGPL, there are more possiblities, depending on how the code was used.

Spend more time analyzing OSS licenses than the SCO case and you'll have a better idea of when to get excited and when to not care.

Re:BSD was in SCO UNIX?

[cant_get_a_good_nick]

BTW: I haven't touched this in a while, so I looked around. All of this stuff was released opensource, can be seen at the project UDI sourceforge page [sourceforge.net] with a link to download the source from cvs [sourceforge.net]. The usb stuff isn't shipped as part of the environment, but is being used. I guess they closed the drivers, even though essentially they're just BSD code ported to USI.

To be fair...

[Vexler]

If you read the article carefully, similar recommendation was also given to Linux users to delay large-scale deployment until the dust begins to settle a bit (i.e. 1st quarter of 2004). Granted, deep down Gartner probably feels, as many of us do, that SCO's days are numbered, but good sense calls for level-headed thinking that should apply to all who are involved - not just a particular subset of the whole.

Not all favorable to Linux

[JohnGrahamCumming]

The paper also says:

> Fence off the innocuous Linux deployments (such
> as network-edge solutions) from the
> performance-intensive ones. Where feasible, delay
> deployment of high-performance systems until the
> end of 1Q04 to see what SCO will do.

and

> If high-performance Linux systems are in
> production, develop plans that would enable a
> quick changeover in case SCO wins a favorable
> judgment and requires the Linux kernel code to be
>substantially changed. Unix systems are the best
alternatives.

Which I read as "do your best to not use Linux for the time-being, and if you are be prepared to switch".

John.

Standard risk-averse analysis...

[Kjella]

...if SCO turns out to have a case, Gartner warned about it. If they don't, Gartner can go "We couldn't know that in advance, so we suggested companies to have a plan B and not rely solely on Linux."

The important thing is that they're denying SCO their cashflow, both from licencing and from their software business. A lawsuit seems a lot more credible when it comes from a running company than from a tanking company.

Kjella

Gartner borrowing from the Slashdotter playbook

[azaris]

prepare plans to migrate...

Is this Gartner's answer to everything?

MS software insecure - prepare to migrate.

Sun changing licensing terms - prepare to migrate.

SCO threatens Linux users - prepare to migrate.

I've used to seeing "switch to another platform/software package" as the default answer on Slashdot to most articles about potential problems any piece of software in existence, but some people actually pay for these Gartner analyses.

When are people who constantly advocate jumping ship whenever a potential problem appears with a product your relying on in you're business going to stop breathing since you can potentially be poisoned by air-borne pollution?

Re:Gartner borrowing from the Slashdotter playbook

[Vlad_the_Inhaler]

If you are running some SCO Unix, you want to do exactly that - start migrating.
If you are using Linux and are worried, draw up a contingency plan and home you don't actually have to use it.

Tomorrow's headline...

[The Wookie]

"SCO sues Gartner Group"

.."Unix systems are the best alternatives."..

[burgburgburg]

If high-performance Linux systems are in production, develop plans that would enable a quick changeover in case SCO wins a favorable judgment and requires the Linux kernel code to be substantially changed. Unix systems are the best alternatives.

No, BSD is the best alternative. SCO faces an even greater uphill battle to try and imply that they have any IP issues with it, considering the AT&T 1994 settlement.

Yes, I remember that yesterday there were intimations that SCO would be going after BSD next. And while I know Darl is crack-addled and David is clueless, I think there might be a paralegal or an associate around who might be able to point out to them the extreme problems they'd have. Or maybe one judge who'd be willing to just slap them upside the head, as they've long deserved.

Somebody paid how much for this?

[cybergrue]

Somebody paid how much for this? They could have gotten the same advice on Slashdot for free.

Sign of the times

[bigjnsa500]

I feel things are speeding up because the domain

scoclassaction.com

has been registered.

What a waste of paper...

[herrvinny]

1) Keep a low profile and do not divulge details on Linux deployments.

How is even a medium size company going to do this? A quick scan of company servers would be enough to see if they're running Linux or not. And even if you do change the servers to say they are Win 2003 or something, what about social engineering? Calling up the company, saying you're MS tech support, and you found a problem with the company's web servers. "But we run Linux." Gotcha! What about companies that have already said they run Linux? Yahoo, Google.

2) Until a judgment in a case would unequivocally warrant it, Linux users should not pay SCO the license fees it has asked for to settle its allegations of infringement of intellectual property rights.

Duh. All techies have been saying this for months.

3) Do not permit SCO to audit your premises without legal authorization.

Why the hell would you allow SCO (or any companies) people onsite for anything except if you're called them first?

4) For customers of SCO Open Server and UnixWare, an unfavorable judgment could cause SCO to cease operations or sell itself. That could harm future support and maintenance. Just in case, prepare a plan for migrating to another platform within two years.

SCO will die in the next 2 years.

Re:What a waste of paper...

[Kjella]

1) Keep a low profile and do not divulge details on Linux deployments.

How is even a medium size company going to do this? A quick scan of company servers would be enough to see if they're running Linux or not. And even if you do change the servers to say they are Win 2003 or something, what about social engineering? Calling up the company, saying you're MS tech support, and you found a problem with the company's web servers. "But we run Linux." Gotcha! What about companies that have already said they run Linux? Yahoo, Google.

There's a world of difference between keeping a low profile, and keeping it a complete and utter secret. E.g. sending out press releases and giving interviews where you quote the great cost savings in moving to Linux, pointing out it's lack of licence fees would be a high profile.

Vague and ambigious answers like "We run a variety of OSs based on their cost-efficiency for their various tasks, desktop/workstation/server etc." would be keeping a low profile. "We are currently evalutating our Linux strategy (or OS strategy, migration strategy, whatever) and would not like to comment on it at this time." also.

It's not about keeping SCO from finding out. It's simply about not sticking your neck out, in case SCO takes a swipe at the most vocal advocates of Linux. After all, there's damn many to pick from, and as long as there's no reason they should pick out *you* in particular...

Kjella

good thing in the long run?

[smd4985]

"There's more, but are the analysts finally catching on?"

Perhaps the whole SCO fiasco will be a boon for Linux in the long run. First off, any kind of press is good press. Secondly, the SCO lawsuit forces the media to understand the issues regarding GNU/Linux and free software, so perhaps this will lead to more widespread understanding and support.

No Need to Hide, is there?

[twitter]

It's not even good advice. Your cheary outlook:

First off, any kind of press is good press. Secondly, the SCO lawsuit forces the media to understand the issues regarding GNU/Linux and free software, so perhaps this will lead to more widespread understanding and support.

is nice, but misses a few things.

The media is being forced to learn about free software because it's dramatic news on it's own. What could be a bigger story than a revolutionary development model that turns everything "experts" ever sai

To SCO Customers...

[IA-Outdoors]

This Gartner guy recommends to SCO customers to be thinking about contigency plans should SCO not be around. Personally, if you are SCO customer you'd be better off doing that regardless. My main justification is that you should not run your enterprise on software built by a company who feels their only way for survival is to sue competitors.

If they had a sound business plan and a good set of products then they would have customers and their bottom line wouldn't require these desperate tactics. The harder decision to make out of all this is what you should switch to. I'd be interested to see how non-linux, non-BSD based posix operating systems (i.e. Solaris) now that SCO is suing everbody.

You know, in the end this SCO thing is probably best settled with ski masks and crowbars.

For those of you with SCO Unix products....

[overbyj]

I also recommend that you run out to CompUSA quickly because I saw a copy of "SCO Unix in a Nutshell" on the discount shelf for only $5. You will need this after SCO goes out of business and you no longer have support.

Thank you Mr. Obvious

[orthogonal]

3) Do not permit SCO to audit your premises without legal authorization.

Huh? Are there actually companies stupid enough to say,

"Sure, Darl, come right on over. Nah, a week of disruption as your people trample through our offices and server rooms is no problem!"

"And you're looking to bill us $699 for each unix, linux, minix, or *bsd box, and for any microwave with an embedded controller? Hey, that's cool, you're the rightful owners after all!"

Good to hear it

[zymano]

Good to hear someone in the media has said it. 'Don't pay that SCO license ! '. Investment analysts are probably looking at the SCO/ip/linux licensing revenues from Fortune 500 companies that have already paid up and they think that there probably is going to be even more revenue. Linux Distribution companies need to raise their voices too so we can stop the SCO licensing so we can put a dent in the evil cycle of SCO bashing Linux which causes corporate companies to pay the license and analysts then giving a "STRONG BUY" on SCOX stock which in turn helps finance all this crap. Let's cut cut their damn oxygen off and stop this fire now .

The Major Missing Recommendation

[Nom du Keyboard]

And the major missing recommendation:

Move all SCO stock you own out of your long term hold portfolio.

It's strange...

[Phantasmo]

that anyone would let a private company search their property without law enforcement being involved.

There's this one episode of The Awful Truth where they have two retired police officers (in uniform) walk around NYC and frisk random people.
The frisk-ees sort of look confused for a second, then calmly allow the search.

I don't know why North Americans are so uppity about "freedom" lately. We're obviously not terribly interested if we need someone to tell us, "Don't LET people take your privacy away!"

Re:It's strange...

[El]

If they are carrying guns, perhaps your best strategy would be to comply now, get their badge numbers, and sue them later. Look what happened recently when the police raided a high school to look for drugs. A few students laboring under the impression that they had rights refused to get down on the floor as ordered. That resulted in drawn weapons being pointed at them, and probably in their being thrown up against the wall and hog-tied... oh, and by the way, they didn't find any drugs.

Re:It's strange...

[ewhac]

The tactic employed is probably the same as employed by the BSA/SIAA. They sent you a notice of suspected infringement, then sit down to "negotiate" with you:

• Allow us free reign to audit your premises, and we'll hammer out a deal based on what we say we find,
• We'll come in with law enforcement, shut down your company, press criminal charges, and slap you with the maximum fine per infringing copy.

Given that you're a CEO of a company whose first responsibility is to shareholders, which choice would you m

Re:It's strange...

[Grishnakh]

Wow, companies are willing to let just anyone come in and do audits for products which they don't even own, and then bill them for it? Maybe I should take this up as a profession.

"I'm here to do an audit of your company for all copies of Internet Explorer, which I'm the IP owner of. I'll have to charge you a $699 fee for each copy I find."

I may have to skip the country, but it wouldn't take long to make enough money to make the scam worth it.

This is obviously part of IBM's plan

[obsid1an]

I am waiting to see how long it will take for good old Darl to come out and say that this report is just IBM plotting again.

ALL UNIX users should be on alert

[n1ywb]

You know, it's not just SCO UNIX customers that should have contingency plans in case SCO folds. Lets say hypothetically that SCO loses the case, declares bankruptcy, and liquidates their assets... Now what happenes to every other System V derivitive OS, like AIX, Solaris, etc? Seems like a lot of uncertainty. I think it would be prudent for any organization that uses any Sys-V type UNIX to have a contingency plan, just in case.

Re:ALL UNIX users should be on alert

[MachineShedFred]

What happens? Simple.

One of the licensees of SysV buys the rights and codebase for pennies on the dollar in bankruptcy court.

Life goes on, hoping that the new owner actually posesses more intelligence than a bag of rusty hammers.

Darl McBride is Toad from X Men

[usurper_ii]

I was watching X men and it hit me that the whole movie was a SCO analogy. Stay with me here. Bill Gates is Magneto and Darl McBride is Toad. Now I haven't figured out who Mystique is yet, but since she is the closest thing to a nude woman most Slashdotters are ever going to see, we all need to at least get a mental image of her at this point. Anyway, Magneto has all the important people rounded up at this big party -- these people are IBM, Novell, Red Hat big wigs, etc. -- and he has this huge electrical storm heading toward them (I have seen the movie three times now and I'm still not exactly sure what that electrical-storm thing is supposed to do?). Now here is where it gets good because Linus is Wolverine (Logan) and off on the side, as this big storm comes, he is battling Toad. First, Wolverine makes it look like he killed himself by starting to talk about incorporating DRM into Linux, but this is all blowing smoke up everyone's ass, 'cause Toad, thinking Wolverine is dead, goes up to him and starts looking through his pockets for some code to steal, but Wolverine shoots his knives out of his fingers and rams them right through Toad...you can see them sticking out of his back, and as the camera zooms in, you see blood stained, cool-looking shiny metal glistening in the moonlight. Now with Toad out of the way Wolverine turns his sights toward stopping Magneto and his electrical storm-cloud thing speeding towards everyone. Wolverine quickly finds the computer controlling the storm and starts to do some hacking on it to stop the storm, but when he brings up a DOS window to run a script in, the damn thing gets a BSOD...forcing Logan to do a crtl-alt-delete on the computer...three times. Luckily, the reboot stops the electrical storm-cloud thing, but Logan does feel a little robbed that it was Magneto's own poor software that really did him in!

To be continued....

consulting on migration

[decapentaplegic]

So is anyone starting up companies that specifically do consulting on how to migrate away from SCO?

One of the open source mantras is that the profit isn't in the code itself, it's in consulting, customizing and tech support. So this one seems like a no brainer. Get a bunch of specialists who understand what keeps SCO's current customers in the SCO fold. Put together specific GNU/Linux packages to match those needs and sell "migration consulting services". Best of all, one could write 2 tier contracts. One tier is just a migration plan analysis. The second centers around the work to be done to implement it if (sorry, when) SCO implodes.

This seems like a business model with considerably better fundatmentals than selling 50lb bags of dogfood over the internet.

Plus doing the sales calls could be fun: "Your chief technology supplier currently has a market cap of X million dollars. They are in a legal fight with IBM, which has a market cap of Y billion dollars. IBM has stated that they have no plan to settle before the damage wrought by their lawyers can be seen from orbit. For Z hundred thousand dollars we can show you how to not be collateral damage."

We Might have just turned the corner

[aws4y]

if you look at there stock performance over the past 5 years (here [google.com]) you will see that over the past month that SCO stock has been loosing its value, and even after the SCO FUD machine kicked into high gear this week and brought on some lawyers the stock is still on a downward slope. So maybe now its time for people to start shorting that stock, at least do it before Dec 8, when the judge may rule on IBMs motion to compel. IANAL but there might even be a declatory judgement at that time due to the poor response from SCO and the fact that there public statements are contradictory to many aspects of their case.

precedent?

[mr_burns]

I just had a thought. Seems to me that with IBM courtroom showdown so far away and by the looks of it SCO's going to lose, perhaps these little suits have nothing to do with collecting fees.

Maybe what they're trying to do is win against paople who can't defend themselves adequately against Boise and Co to set precedent, then meet IBM in court with that.

So maybe the thing to do, once these things come out is to try to get a stay until the end of the IBM/Red Hat mess or file a joint counterclaim with other defendants to pool resources and compell discovery. I think the stay might be prudent because that one case will definitely test the legitimacy of SCO's claim AND will have more capable and better informed council on both sides.

Why not disclose Linux deployments?

[Corpus_Callosum]

Why is Gartner saying not to disclose Linux deployments?

It seems to me that disclosing Linux deployments is irrelevant. SCO lawsuits win or loose, anyone who has Linux installed will meet the same destiny, regardless of whether they discuss it... The only party that gains from not disclosing Linux deployments is, ahem... Microsoft...

What did they intend vs what they are doing.

[khasim]

Background:
SCO hasn't had a new release in years and they are still years behind on 64-bit.

SCO's business is dead. New deployments are going to Linux or Microsoft or Sun.

My guess is that this was ORIGINALLY an attempt to get IBM to buy them out and shut them up.

But SCO messed that up so badly that IBM decided to face them in court.

So, the SCO execs have a failed company and not much hope for an easy buy out.

So the decided to pump-n-dump their stock. That way they can realize SOME profit.

So SCO goes public with all sorts of claims, people seem willing to buy SCO stock on the "lottery" principle.

SCO execs dump their stock as fast as they can. That's on the record.

But the SEC doesn't like pump-n-dump schemes.

SCO has to do something so the SEC doesn't start digging.

So now you have SCO making strange claim after strange claim after even stranger claims.

That's why SCO is taking venture capital funding for stock.

That's why SCO is paying their lawyers in stock.

All they have to pay for the things they need is stock.

So they have to keep the stock price up.

But repeating the same claims over and over has a diminishing rate of return. People don't buy your stock in 4th quarter if you keep repeating the claims you made in 2nd quarter.

You need new claims. Something to fire the imagination. Something to get those "journalists" calling you again and printing your words.

Something like ....... announcing ANOTHER lawsuit.

But don't actually file one. SCO cannot afford to split their legal department.

Just threaten to file one. That's just as good for those "journalists".

Re:Nobody is...

[freeweed]

an issue that only exists in places like Slashdot and is solely sustained by the "media" attention the OSS community and trolls that work for Fortune give it

Tell that to IBM's lawyers.

The first half of your post was true. The rest IS a troll, and if you're wondering why you'll get moderated as such, it's not (just) because people disagree with you.