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Computer Associates' VP Says CA Did Not Exactly Buy a SCO License

Friday, March 05 2004 @ 12:07 AM EST

SCO has been telling the world that Computer Associates took a license. Not precisely so, says a VP at CA, according to Newsforge:

CA senior VP of product development Mark Barrenechea says that Bench’s claim is nonsense. CA has not paid SCO any Linux taxes, he said.
Drawing up short of calling SCO a liar, Barrenechea claims that SCO has twisted a $40 million breach-of-contract settlement that CA paid last summer to the Canopy Group, SCO’s biggest stockholder, and Center 7, another Canopy company, and has turned it into a purported Linux license.
As a "small part" of that settlement, Barrenechea said, CA got a bunch of UnixWare licenses that it needed to support its UnixWare customers. SCO, he said, had just attached a transparent Linux indemnification to all UnixWare licenses and that is how SCO comes off calling CA a Linux licensee.
Barrenechea said that SCO was dropping CA’s name to associate itself with the "third-largest software company in the world" and build support for its "lost cause."
But according to Barrenechea, not only are SCO’s IP ambitions doomed, but its Unix interests are a "trailing negative" on the road to dropping from 10% of the market to 3%-5% in a few years and then "SCO will be irrelevant," he said.

You can read the rest here.

Stephen Shankland has another VP, a senior VP at CA, who says they do have a license, but he confirms they got it as part of the settlement, not because they just signed up wanting one recently:

Computer Associates, which has begun making its management software available on Linux, acknowledged it had the license, but took pains to distance itself from SCO's methods.
"CA disagrees with SCO's tactics, which are intended to intimidate and threaten customers. CA's license for Linux technology is part of a larger settlement with the Canopy Group. It has nothing to do with SCO's strategy of intimidation," said a statement from Sam Greenblatt, senior vice president and chief architect of CA's Linux Technology Group.
Greenblatt has been an outspoken Linux fan. "The whole world is going to unite around a single operating system, and it's going to be Linux," he said in a keynote address at the LinuxWorld Conference and Expo in January.

You may recall the earlier settlement of the lawsuit brought against Computer Associates by Canopy Group. Maureen O'Gara reported the settlement was between CA and Canopy Group and Center 7, another Canopy company:

According to a settlement cut Monday on the courthouse steps with the Canopy Group and Canopy company Center 7 while they were picking a jury inside, Computer Associates is to pay a cool $40 million to get out from under breach-of-contract charges. . . .
Need we point out that it's a small world and that the Canopy Group is the largest stockholder in the rogue SCO Group and that Center 7, a Canopy foundation, is one of SCO's sister companies, part of a joint venture handling SCO's Volution remote install technology, and that Computer Associates is squarely on IBM's side in the Linux debate that SCO, ahem, has launched? To be really ironic, we might also mention in passing that CA was an investor in Center 7 and that Center 7's CEO Chris Skillings is an ex-CA regional sales VP. . . .
The suit, which apparently charged CA with competing against Center 7 and wooing the same customers, dates to 2001, the year the strategic alliance between the two companies was cut. Skillings was hired to launch PilotCenterSM. He says CA is no longer considered an investor.

So, if Canopy back in August was hustling a SCO license as part of a deal that SCO wasn't even involved in, how sturdy is that corporate veil now, do you think? Time will tell. Reporters smell blood now, and some of them are starting to do what reporters can do so well, really dig.

As for Questar, Questar Gas is a Vultus customer and here is some information about Vultus:

Vultus has received initial seed funding from the Canopy Group Investment Company. Canopy serves as a technology accelerating venture capital firm for Vultus with a focus on growing the high-tech industry: first by funding and influencing emerging leading-edge technologies, then by providing a nurturing and dynamic environment in which Vultus can thrive and grow.
About Vultus, Inc.
Vultus, Inc., delivers the most technically advanced Web service user interface products and development tools available today. The company leverages the power of XML technology, JavaScript and HTML to deliver a Windows-rich user experience in an Internet browser environment. Vultus offers SOAP-enabled technology that supports the latest UDDI and WSDL industry recommendations. The company specializes in developing a dynamic presentation layer - designed through WebFace Studio - streamlining Internet application development to make it faster, simpler, and much more predictable. Vultus is located in Lindon, Utah and its customers include Questar Gas, the Utah Department of Public Safety and the Wyoming Department of Public Safety.

Shankland adds this detail as well:

And in another tie between the two companies, SCO became in April 2003 a worldwide distributor of Center 7 management software called Volution, according to an SEC filing from SCO on April 30.
The Canopy Group is SCO's largest investor, holding 38.7 percent of SCO's stock, according to a Feb. 27 SEC filing from SCO.

Yes, sir. One big inbred family, with Canopy smack dab in the middle.

UPDATE:

Robert McMillan has taken this story the next lap. Not only does he confirm the CA story and fine-tune it, it seems Leggett & Platt didn't take a license either, so far as they know:

Separately, another company mentioned as a SCO Linux licensee on Thursday denied knowledge of any such agreement. Though SCO's Bench had confirmed Carthage Missouri's Leggett & Platt Inc. as a licensee on Wednesday, a spokesman for the manufacturing company said that he had no knowledge of such a deal. "I have now talked to our people who handle our Linux systems and, at least at a corporate level, we have not bought such a license from SCO Group," said John Hale, the company's vice president of human resources. "To their knowledge they would not have an interest in doing so," he said.
"It's conceivable -- we're a large far-flung corporation -- that some unit of Leggett & Platt in some part of the country may have been persuaded to buy such a license, but if they did we are not aware of it," Hale said.
One financial analyst said that the conditions surrounding the CA license did not cast a favorable light on SCO, which has claimed that Linux illegally contains some of its Unix code.
"I think it just speaks to the weakness of their case. Why could (CA) have not been convinced to take a license without legal action," said Dion Cornett, a managing director with Decatur Jones Equity Partners LLC.

Microsoft has put out a statement:

Meanwhile, Microsoft said "the allegations in the posting are not accurate".
"Microsoft has purchased a license to SCO's intellectual property, to ensure interoperability and legal indemnification for our customers," the company said in a statement.
"The details of this agreement have been widely reported and this is the only financial relationship Microsoft has with SCO. In addition, Microsoft has no direct or indirect financial relationship with BayStar."

Stephen Shankland and Ina Fried on CNET News.com have one more intriguing morsel:

When Microsoft was asked specifically whether it or any of its employees played a role in connecting SCO to BayStar, the company declined to comment."

Hiawatha Bray spoke to Bay Star's Bob McGrath:

Bob McGrath, a spokesman for BayStar, also dismissed the contents of the message. "The question was asked: Is Microsoft a participant in this investment by BayStar? The short answer is no."

Maybe we need to ask a longer question. Wired has this tidbit:

BayStar Capital is a private equity fund that makes direct investments in privately held and publicly traded companies. One of BayStar's largest investors, according to BayStar (PDF), is Vulcan Capital, the private investment vehicle of Paul Allen. Allen co-founded Microsoft with Bill Gates, and is the second-largest Microsoft shareholder after Gates.
At the time the investment was announced last November, questions were raised over Microsoft's possible participation in the investment. But BayStar and SCO both denied any Microsoft involvement when the investment was announced.

You know what I just realized? I believe this memo means that IBM can subpoena Microsoft and ask for their email and documents .... ah! Whoever you are, whistleblower, we salute you!

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