SCO’s licensing deal with Microsoft raises user doubts

Many IT users are questioning the motives of Microsoft Corp. since last week’s announcement that the company had signed a Unix technology licensing deal with The SCO Group Inc.

The deal between Microsoft and Lindon, Utah-based SCO came less than a week after SCO threatened possible legal actions against commercial users of Linux because of claims that some of its Unix intellectual property has illegally made its way into the open-source operating system. The financial details of the contract between Microsoft and SCO weren’t disclosed. [Please see Microsoft licenses Unix technology from SCO.]

Microsoft spokesperson Mark Martin said the software vendor agreed to the deal after SCO offered it as a way to ensure that Microsoft products comply with the intellectual property claims SCO has made on Unix.

“Microsoft has said for a long time that it respects intellectual property,” Martin said. He said the licensing agreement “has absolutely nothing to do” with a lawsuit that SCO filed against IBM in March or its assertion that corporate Linux users could face legal liabilities for running the operating system.

For the past four years, Microsoft has offered software called Services for Unix that lets users run Unix applications on Windows-based hardware as part of migration strategies or to improve interoperability. Martin said Services for Unix is just one reason why Microsoft agreed to the licensing deal, which covers all of its products.

But critics of the two companies said it’s hard to believe that a vendor as powerful as Microsoft would sign a deal with SCO unless it thought the move would help keep Linux from posing a competitive threat to Windows.

Microsoft “would love for corporations to believe that they will have to pay big licensing fees to SCO for using Linux,” said Scott Davis, chief technology officer at Realty Times, a Dallas-based real estate Web site. Davis uses Microsoft products and wrote Computerworld (U.S.) about the issue. “Anyone who can interpret Microsoft’s announcement as anything other than a PR ploy needs a serious reality check.”

Jeffrey Nicholas, a systems analyst at a large New York financial services firm that he asked not be identified, said he thinks Microsoft wants to help fund SCO’s Linux-related legal actions. “The whole thing to me really doesn’t smell right,” he said. “It seems like it’s all just too coincidental.”

Ken Schumack, a software engineer at LSI Logic Corp. in Milpitas, Calif., said in an e-mail that he sees Microsoft’s involvement as a “behind-the-scenes tactic…to try and keep Linux from taking market share. A lot of people are thinking that, especially given Microsoft’s history in the past, they almost tip their hand that they’re involved in some way.”

In a research note, Tony Baer, an analyst at onStrategies in New York, called SCO’s actions “the software industry’s equivalent of terrorism.” Baer said he “can only conclude that the licensing of SCO Unix is Microsoft’s strategy to drive a new wedge into the Linux community, a sector whose growth poses a far more formidable threat than the empty roars emanating out of SCO.”

The Cendant Hotels division of Parsippany, N.J.-based Cendant Corp. runs about 3,700 servers based on SCO’s OpenLinux operating system. David Chugg, senior director of hotel solutions at the unit, said he initially was worried about what SCO’s legal campaign would mean for Cendant Hotels. But he added that he was reassured when SCO said it wouldn’t target any of its own Linux customers.

“Out of all the positions to be in, I think we’re in the best one,” Chugg said.