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A Dose of Reality for SCO
Monday, September 26 2005 @ 04:31 AM EDT

Here's a nice dose of reality for SCO. And you know how much they love that. It seems that, despite SCO's claims in its Second Amended Complaint that IBM is contributing to Linux in a dastardly plot to destroy Unix, here comes the news in The Austin American Statesman that Unix is still going strong and in fact, IBM is making much dinero from AIX.

Oops. How'd that happen?

I guess when SCO told the court and the SEC that Linux has been destroying its Unix business, it may not have plumbed the analytical depths to reach the real source of its difficulties.

Here's one reason. Folks don't want to do business with litigious companies. They also tend to prefer it if you tell them the truth.

It's probably been a while since you read SCO's Complaint, but here is what they said about IBM and what they will have to prove:

77. In furtherance of its plan to destroy its UNIX competitors, IBM has announced its intention to make Linux, distributed to end users without a fee, the successor to all existing UNIX operating systems used by Fortune 1000 companies and other large companies in the enterprise computing market. . . .

IBM’s Scheme

84. As market awareness of Linux evolved, IBM initiated a course of conduct with the purpose and effect of using Linux to unfairly compete in the enterprise market. At that point in time, four important events were occurring simultaneously in the enterprise software computing marketplace:

a)Intel chips were becoming widely demanded by enterprise customers since Intel’s processing power had increased and its cost had remained low;

b) SCO’s market power in the enterprise marketplace was increasing based on the combined capabilities of SCO OpenServer, SCO UnixWare and SCO’s unique position as UNIX on Intel;

a) Sun and Microsoft's market share in the enterprise market continued to grow; and

b) IBM was in the process of evolving its business model from software technology to services.

85. In the process of moving from product offerings to services offerings, IBM dramatically increased its staff of systems integrators to 120,000 strong under the marketing brand “IBM Global Services.” By contrast, IBM’s largest historic competitor as a seller of UNIX software, Sun Microsystems, has a staff of approximately 12,000 systems integrators. With ten times more services-related personnel than its largest competitor, IBM sought to move the corporate enterprise computing market to a services model based on free software on Intel processors.

86. By making the Linux operating system free to end users, IBM could undermine and destroy the ability of any of its competitors to charge a fee for distribution of UNIX software in the enterprise market. Thus, IBM, with its army of Global Services integrators who earn money by selling services, would gain a tremendous advantage over all its competitors who earn money by selling UNIX licenses.

87. To accomplish the end of transforming the enterprise software market to a services-driven market, IBM set about to deliberately and improperly destroy the economic value of UNIX and particularly the economic value of UNIX on Intel-based processors. . . .

110. IBM is affirmatively taking steps to destroy all value of UNIX by improperly extracting and using the confidential and proprietary information it acquired from UNIX and dumping that information into the open source community. As part of this effort, IBM has heavily invested in the following projects to further eliminate the viability of UNIX:

a)The Linux Technology Center was launched in 2001 with the intent and foreseeable purpose of transferring and otherwise disposing of all or part of UNIX, including its derivative works, modifications and methods, into an open source Linux environment;

b) The IBM Linux Center of Competency was launched to assist and train financial services companies in an accelerated transfer of UNIX to Linux with the advertised intent and foreseeable purpose of transferring and otherwise disposing of all or part of UNIX, including its derivative works, modifications and methods into open source.

c)A carrier-grade Linux project has been undertaken to use UNIX source code, derivative works, modifications and methods for the unlawful purpose of transforming Linux into an enterprise-hardened operating system;

d) A data center Linux project has been undertaken to use UNIX source code, derivative works, modifications and methods for the unlawful purpose of transforming Linux into an enterprise-hardened operating system; and

e)Other projects and initiatives have been undertaken or supported that further evidence the improper motive and means exercised by IBM in its efforts to eliminate UNIX and replace it with free Linux.

Sounds terrible, until you hold up a little reality to the claims. Look at what the article in the Statesman says:

With a subpar product in a dying market, IBM Corp. simply did what any rational company would do — double its billion-dollar investment.

It was the late 1990s, and Big Blue's underperforming Unix servers were getting pummeled by rivals such as Sun Microsystems Inc. To make things worse, servers using desktop-computer technology were on the rise. And many figured the halcyon days had come and gone for proprietary Unix machines — the servers that do much of the heavy computing for businesses such as databases.

What better time to put up billions of dollars?

"Like a lot of things at IBM in the late '80s, early '90s, we kind of lost our way," said Adalio Sanchez, general manager of IBM's pSeries business, which includes the Unix servers and Power microprocessor technology developed mostly in Austin. "So we made a multibillion-dollar commitment at the turn of the century to regain our leadership. . . .

The company has nearly doubled its share of the Unix server market in the past six years. . . .

"It would be tough to find an organization in (information technology) that has performed as well as IBM's pSeries group over the past few years," said Charles King, analyst at Pund-IT Research in Hayward, Calif. . . .

In fact, while the sales of Unix servers have grown at a moderate pace overall, sales of higher-end Unix systems have been growing more rapidly, said Bozman, the analyst at IDC. Worldwide sales of more expensive, high-end Unix servers grew 19.2 percent in the second quarter, and midrange Unix servers increased 15.6 percent.

Sales of the least-expensive Unix servers — those that overlap the market for industry-standard machines — dropped 19 percent, but the overall Unix revenue still grew about 3 percent thanks to the top end.

"The good days of Unix are back," IBM's Sanchez said. "Growth is back, and we're leading that growth. And it's all about the amount of investment we're making and innovating in areas that matter to our clients."

Investing billions in Unix in order to kill it? Scheming to kill off Unix when they are selling it themselves and it is doing so well for IBM? Tell *that* to the jury and watch them laugh in your face. SCO, as Caldera, failed in the Linux business, and as long as I've known them, their Unix business has been in decline. Yet other Linux companies are doing just fine, thanks, and companies are making money with proprietary Unix, too. IBM is doing well with both Linux and Unix. What does that tell you about the underpinnings of SCO's legal claims?


  


A Dose of Reality for SCO | 223 comments | Create New Account
Comments belong to whoever posts them. Please notify us of inappropriate comments.
No mention of SCO in the article
Authored by: Anonymous on Monday, September 26 2005 @ 04:42 AM EDT
It looks like the mainstream press is finally getting it.

[ Reply to This | # ]

A Dose of Reality for SCO
Authored by: inode_buddha on Monday, September 26 2005 @ 04:51 AM EDT
FWIW PJ, I'be been doing the linux thing for 10 years now, and Caldera's
business has beenn in decline the entire time. There is nothing new there.

I'm actually a bit sadenned because I think it could have been different, under
different management.

---
-inode_buddha
Copyright info in bio

"When we speak of free software,
we are referring to freedom, not price"
-- Richard M. Stallman

[ Reply to This | # ]

Off-topic here.
Authored by: ankylosaurus on Monday, September 26 2005 @ 05:06 AM EDT
You know the drill - see the instructions for clickable links on the 'post a
comment' page.

---
The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

Corrections
Authored by: ankylosaurus on Monday, September 26 2005 @ 05:07 AM EDT
If, indeed, any are necessary.

---
The Dinosaur with a Club at the End of its Tail

[ Reply to This | # ]

The Devil's Advocate
Authored by: Ian Al on Monday, September 26 2005 @ 05:19 AM EDT
SCOG are arguing that IBM has tried to kill Unix and that is demonstrably wrong.
However, they are specifically claiming that IBM is trying to destroy SCOG's
Unix Market as shown in PJ's extract of their complaints in the report. SCOG can
only sue for damages against their company which makes the latter case the most
relevant.

I think it is possible to argue that IBM has attempted to kill the Unix on Intel
market since that part of the market is ever weakening. However, IBM's comments
in the article are a full response. IBM can show that their Linux activities are
both fair competition and that they make money by servicing Linux environments.
They also use an analagy with Ferrari cars - poor competition in the family car
market, but competitive for power drivers (pun intended).
When a low-end X86 server can be got for $500, can the per-processor cost of
Unix be considered competitive, especially compared with the per-processor cost
of running Linux. However, IBM can show that their Linux activities are both
fair competition and that they make money by servicing Linux environments.

However, the price argument is weakened when one considers the per-processor
cost of running Windows servers on X86 hardware. On the other hand, why would
anyone want to run any version of Windows on any hardware? The only answer is
inertia and the need to run Windows-centric software.

---
Regards
Ian Al

[ Reply to This | # ]

A dissenting opinion
Authored by: chris_bloke on Monday, September 26 2005 @ 05:22 AM EDT

I've got to say that having used AIX on and off for many years (first time was in 92, just as I discovered Linux) and run one network that had over 12 different UNIX variants on almost as many hardware platforms (at once) I really do wish that IBM would put it out of my misery. Only the SCO UNIX box (wot not symlinks?) and a lonely Transputer box running Idris were worse, and that had a shutdown command & init scripts that broke part way through, leaving you to do sync sync sync BRS.

There's a good reason that Paul Tomblin is quoted as saying:

It used to be said that AIX looks like one space alien discovered Unix, and described it to another different space alien who then implemented AIX. But their universal translators were broken and they'd had to gesture a lot.

To paraphrase Mr Adams, AIX is almost, but not quite, completely unlike UNIX.

See, it's even given me post-traumatic stress disorder... :-)

[ Reply to This | # ]

Free of charge, or freedom to use?
Authored by: Chris Lingard on Monday, September 26 2005 @ 05:40 AM EDT

One thing that the lawyers of SCO always get wrong are the facts concerning Linux. They equate Linux with give away goods without any understanding. Or do they think that if they misrepresent the facts often enough, people will believe them

87. By making the Linux operating system free to end users, IBM could undermine and destroy the ability of any of its competitors to charge a fee for distribution of UNIX software in the enterprise market. Thus, IBM, with its army of Global Services integrators who earn money by selling services, would gain a tremendous advantage over all its competitors who earn money by selling UNIX licenses.

Linux is not free, we do not give it away. When I install Linux on a customers machine I charge for my time. If the customer does it themselves then they use their own time and in house skills.

The only free versions that I do, is when I give CDs to neighbours and friends, but that is a social thing.

The big difference is that you are charging for your skill, but not for the licence.

[ Reply to This | # ]

A Dose of Reality for SCO
Authored by: Anonymous on Monday, September 26 2005 @ 06:43 AM EDT
Not only is IBM selling Unix, so is HP. In fact HP has two Unix's, one for HP
machines, and one for the old DEC Alpha machines, only I think they either have
stopped supporting that machine, or are dropping support for it. They also have
VAX VMS. Anyone remember that? There are still company's using it. Most
probably have to look for third party support for that. What do those users do
who depend on that operating system? I recently re-read a Science Fiction
story, written about a time about twenty years from now, written in 1979. In
the story, PDP 130 was the machine mentioned. In 1979, it was inconceivable
that Digital Equipment Corporation would no longer exist. It was also
improbable that programs written then would still be in use by the year 2000.
But look at the mess we had going over billions of lines of code, to make sure
that there would be not problems when 2000 arrived. If VAX VMS were am open
source operating system, then users would not worry about loss of support for
the OS. But instead the systems are being thrown out and lots of money being
spent on conversion. This should be the lesson for those who espouse
propriatary operating systems. Microsoft will never go out of business, it's
too big? Does anyone remember Pan American Airlines? No company is to big to
not go out of business. The only reason Chrysler stuck around long enough to be
bought out by Mercedes Benze was due to a hugh government bailout.

Will the US government bail out Microsoft when they can no longer compete?

[ Reply to This | # ]

"to destroy its UNIX competitors"
Authored by: Anonymous on Monday, September 26 2005 @ 07:05 AM EDT
Sorry, but I'm not drinking your Kool Aid.

Sales at the top end of the UNIX server market, which is where IBM have been
investing, have risen. Sales at the bottom end, which is in direct competiton
with PC/Linux solutions, and where IBM have walked away (from a UNIX solution)
have fallen.

SCO could be right on this. I'm not saying that they are; in fact, I think
they're barking mad to believe that IBM's Linux division is somehow out to
poison the low end of the UNIX chalice rather than to make money in its own
right. That's not how companies like IBM work.

However, it's at least *possible* that this is what's happening, based on the
evidence that *you* have just presented. Believe what you like, but please
don't show us an apple and call it an orange.

[ Reply to This | # ]

Foot for the Shooting Of
Authored by: sproggit on Monday, September 26 2005 @ 07:19 AM EDT
I'm sure that this is a tiny little point, but am I mistaken, or do Sun
Microsystems offer Solaris for free? It might only be for machines with less
than 4 or 8 CPUs, or something like that.

Specifically, I'd argue that this strategy of Sun [IIRC] is aimed not at
"top end" or "medium sized" unix servers, but exactly the
variety of smaller Intel-based systems that SCO claim their product should be
dominant on. The typical uni-, dual-, and quad-processor x86-based
motherboards.

So how exactly are SCO reasoning that it is IBM's actions with respect to Linux
that are so damaging? They've tried to use a two-pronged attack here, to say
that IBMs entire business strategy around Linux was set to undermine SCO, and
then that it was IBM's alleged misuse of SCO material [that SCO still has to 1)
put on the record, and 2) prove ownership of] that enabled the dastardly ploy to
be successful.

Here's an interesting thought for you. One of the ways that SCO could generate
evidence for their case would be to find a room full of former customers who
were willing to testify, "We would still be customers of SCO but for the
fact that Linux now gives us everything we want for free!" Or would that be
like shooting themselves in the foot? Oh, hang on, that won't work. You'd need
the former customers to specifically say which features in Linux they used to
get from OpenServer but now get for free, and then you'd need to show that those
lines came from IBM. But of course SCO could do that without more witnesses, if
of course they had the proof.

Can someone please tell me the full postal address for Darl McBride? I need to
send him an envelope full of straws - for him to grasp at. He seems to be
running a bit short at the moment.

[ Reply to This | # ]

A Dose of Reality for SCO
Authored by: Anonymous on Monday, September 26 2005 @ 08:27 AM EDT
87. By making the Linux operating system free to end users, IBM could undermine and destroy the ability of any of its competitors to charge a fee for distribution of UNIX software in the enterprise market. Thus, IBM, with its army of Global Services integrators who earn money by selling services, would gain a tremendous advantage over all its competitors who earn money by selling UNIX licenses.

Wow, wonder why noone ever thought about using that arguement with regards to IE

[ Reply to This | # ]

Huh?
Authored by: LPrecure on Monday, September 26 2005 @ 08:31 AM EDT
85. In the process of moving from product offerings to services offerings, IBM dramatically increased its staff of systems integrators to 120,000 strong under the marketing brand “IBM Global Services.” By contrast, IBM’s largest historic competitor as a seller of UNIX software, Sun Microsystems, has a staff of approximately 12,000 systems integrators. With ten times more services-related personnel than its largest competitor, IBM sought to move the corporate enterprise computing market to a services model based on free software on Intel processors.

87. By making the Linux operating system free to end users, IBM could undermine and destroy the ability of any of its competitors to charge a fee for distribution of UNIX software in the enterprise market. Thus, IBM, with its army of Global Services integrators who earn money by selling services, would gain a tremendous advantage over all its competitors who earn money by selling UNIX licenses.

Just adding to the (many) things that make me go "Huh?", is Microsoft ("inventors" of IE and Media Player) actually funding a surogate to argue in court that free software given away for the (alleged) purpose of destroying a competitor's market is a criminal act?

(Never mind claiming that IBM was trying to kill off UNIX by hiring 120K employees for it's UNIX division.)

[ Reply to This | # ]

  • A nit.. - Authored by: Anonymous on Monday, September 26 2005 @ 11:37 AM EDT
  • Huh? - Authored by: John Hasler on Monday, September 26 2005 @ 04:01 PM EDT
  • Huh? - Authored by: bstone on Monday, September 26 2005 @ 07:10 PM EDT
One claim not rebutted
Authored by: Anonymous on Monday, September 26 2005 @ 09:55 AM EDT
Devils Advocate again (different person this time)
In the context of the listed claims and the "responding" article, the
claims say that IBM tried to destroy the economic value of UNIX on Intel (claim
87b.. notice there are two claims 87, looks like a typo), and the article
specifically quotes IBM saying that the place where AIX is thriving is on the
pSeries (which uses the PowerPC chips).

So without further explanation, there are a lot of superfluous claims here, but
the heart still remains.

SCO's claim here (when you get rid of all the cruft) really centers on whether
IBM had the contractual right to compete against SCO in the Linux space (against
Project Monterey).

[ Reply to This | # ]

Another Factor...
Authored by: Anonymous on Monday, September 26 2005 @ 10:09 AM EDT
Another factor which should be mentiond is that there is nothing illegal, in and
of itself, in adding "system integrators," in increasing investment in
either Unix or Linux offerings, or in much else that SCOx complained about.

The only illegal thing would be IF, and only IF, IBM actually contributed
copyrighted materials (or patented materials) improperly into Linux or Unix.
Competition, in and of itself, which is a large part of the complaints, is not
illegal.

Granted there are many ways in which competition could be unfair and illegal,
but not by mere large investments.

Certainly all this has been covered extensively here in the past, but I think it
needs to be reiterated so that we don't lose sight of it in the apparent
concentration here on Unix sales, important though that aspect is.

Larry N.

[ Reply to This | # ]

A Dose of Reality for SCO
Authored by: Anonymous on Monday, September 26 2005 @ 10:21 AM EDT
One or two things:

IBMs p-Series and SCO are in different markets. IBM is selling high-end
workstations and servers that come complete with their own Operating-System
(AIX). If you need some heavy numbercrunching done or a server that can stand
some load you go out and look at servers from Sun, HP or IBM, compare a few
benchmark numbers that match your purpose and get what you need. Those things
don't run with Windows, and you don't want Windows anyway, and while Linux may
work on some of these machines, why not go with the manufacturers specifically
tailored UNIX-variant, libraries and compiler while you're at it, and oh, the
support package too. This is the kind of server that, once switched on and
configured you can forget about because it'll do it's job.

IBM will have no problem selling these machines (and AIX with them) as long as
they deliver enough bang for the buck, but that means the competition is really
on the hardware-level. Of course the OS has to keep up, that's just what the
customer expects, but my main point is that it's sold as part of the package.

SCO on the other hand sells a Unix for PCs. In that league they compete with
anyone ot there selling operating systems for PCs or PCs complete with an OS. So
their main competitors *are* Windows and Linux, they're not so wrong about that.
Even that Linux is more of a threat because it's easier to switch from one Unix
to anotherr is correct. But that's what competition is about. Also it's not SCOs
real problem, neither is it their problem that they're a litigous company,
their business has been in decline before.

Their problem is that they didn't stay ahead of the game. They had their
installed customer base, their distribution network and a market-niche (Point Of
Sale systems) where they could very well survive. All they needed to do was to
keep the Unix up-to-date and keep up the good work.

Since their selling arguments were mainly a package of out-of-the-box ready
systems and service they probably could've even put their Unix under GPL or
maybe make a transition to Linux. If they can build systems that, once switched
on, will do their job and if their customers can connect the hardware they need
to that, then that would've been good enough for them to stay in the game.

But no, they neglected their Unix-development and were to slow to implement what
their customers wanted and needed. *That* is where thy failed and *that* is why
their customers turned to alternatives. Had it not been Linux it would've been
some Windows variant.

Would SCO have sued Microsoft then? I don't think so.

[ Reply to This | # ]

More than one reason to avoid SCO
Authored by: Anonymous on Monday, September 26 2005 @ 11:26 AM EDT
"Here's one reason. Folks don't want to do business with litigious
companies."

OK, that would be a reason for them to lose business after 2003, after they
became lawsuit happy. But that doesn't explain why they had been losing business
before then, so I don't think that their litigious nature alone can explain all
their losses.

Yes, I think it's outrageous to blame Linux and I agree that they did it to
themselves even before they started with the lawsuits, but the judge shouldn't
and won't take my word (or PJ's) for it.

[ Reply to This | # ]

A Dose of Reality for SCO OT
Authored by: Animal_Speaker on Monday, September 26 2005 @ 11:52 AM EDT
PJ, no offense but, "Mucho dinero" is much better.

---
La vida es un sueño, la muerte es el despertar.

[ Reply to This | # ]

A Dose of Reality for SCO
Authored by: Yossarian on Monday, September 26 2005 @ 12:52 PM EDT
> Here's a nice dose of reality for SCO.

It reminds me a couple of sayings from the 1960's (can be
found in http://www.vegard.net/about/one-liners.php )

Reality is for people who can't handle drugs.
Don't trust reality. After all, it's only a collective hunch.
It's not reality that's important, but how you perceive things.
Reality is a nice place, but I wouldn't want to live there.

[ Reply to This | # ]

Really typical market behavior
Authored by: Anonymous on Monday, September 26 2005 @ 01:34 PM EDT
An economist, Clayton Christensen, has written a book "The Innovator's
Dilemma" in which he describes how new technologies upset the market and
drive established market leaders out of business. Such technologies are
described as 'disruptive'. They start out at the margins of the market where
the established players are not meeting the customers' needs well. They thus
gain a toe-hold. Over time, the disruptive technology develops and improves and
starts to take a noticible number of customers from the market leaders. One
possible response is for the market leaders to retreat up-market where the
margins are better anyway. Eventually, the disruptive technology takes the
whole market and the once powerful market leader goes out of business.

Unix does indeed seem to be retreating up-market. It is still growing at the
high end. It seems to me that IBM saw the writing on the wall and responded
correctly. There is still lots of money to be made in Unix. The future lies
with Linux though. IBM wasn't engaged in any kind of a scheme, it merely
responded correctly to the market forces facing it.

Christensen shows this process happening time after time in several industries.
IBM didn't have to do anything to make it happen, it was going to happen
anyway.

en.wikipedia.org/wiki/Clayton_Christensen

[ Reply to This | # ]

Unix is FREE (as in beer) too
Authored by: jtsteward on Monday, September 26 2005 @ 08:43 PM EDT
http://www.sun.com/software/solaris/get.jsp

Solaris is a free download. Use it free for 90 days, if you want to continue to
use it in a commercial environment. pay $120 a year for support.
How about that as a scheme to undermine SCO Unix -- FREE Unix.




---
-------------------------------------------------
Darl needs more bullets, he keeps hitting his foot but he won't go down

[ Reply to This | # ]

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