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SCO's Motion to Compel Palmisano Deposition and Memo in Support - as text
Monday, January 17 2005 @ 11:00 AM EST

Here is SCO's Motion to Compel IBM to Produce Samuel J. Palmisano for Deposition [PDF] and the supporting Memorandum [UPDATE: the court has sealed the document. See this article for an explanation], in which we can learn some interesting things by finding the original materials they have attached as exhibits. One on their list was this quotation:

"We intend to be a leader in our industry by ... making IBM technologies available to the Linux and open source communities."
-- M. Chang, IBM Linux (September 2004), http://www.mindwork.com.tw/0909/sildes/3_0909%20Novell%20Linux%20Day%20- %20For%20Download.pdf, at 10 (Exh. N) (quoting Palmisano speech of Jan. 10, 2000).

When I copied and pasted the link, I first got a 404 error page in Chinese. So I searched by the quoted sentence. And it takes you here where you find two listings, one the Chinese page. I clicked on the link on that page to download the PDF. If you download it, you will find it is actually a 2004 PowerPoint presentation that IBM VP Mitchell Chang gave, and on page 10, one slide shows a picture of Mr. Palmisano and the quotation, and the date Jan 10, 2000. It wasn't a speech by Mr. Palmisano. How do I know? I clicked on the second link.

That takes you to a memo, an internal IBM memo from Palmisano dated January 10, 2000, that an IBM employee posted to a FreeBSD message board, and notice as you read it that he says in the same memo that the company will continue its support of Project Monterey and AIX:

As we look to the future, we will continue our aggressive push in the UNIX marketplace with our industry-leading RS/6000 and NUMA-Q servers, our award-winning AIX operating system and our efforts to evolve AIX in Project Monterey.

Here's the entire memo, which SCO probably should have taken the time to research more carefully, because it proves two things that don't help SCO: one, that IBM decided to back Linux because the world was starting to go mad for it and they had the smarts to realize it was going to be a player in the future and two, that they still had hopes for AIX and Project Monterey, SCO's paranoid memorandum notwithstanding. What they were trying to accomplish was to add to their offerings, not to kill anything. As Palmisano explains in the memo:

We believe we're now on the brink of another important shift in the technology world. The next generation of e-business will see customers increasingly demand open standards for interoperability across disparate platforms. Linux -- a community-developed version of UNIX -- will play a pivotal role in this. We will embrace Linux on our server platforms -- and help it become one of those open standards as a natural extension of our commitment to e-business and the next generation of the Internet.

And as you will see from some articles in the media at the time, Palmisano first got seriously interested in Linux by taking a world tour and hearing from his customers that Linux was the next operating system that all the young programmers preferred to use.

On page 5 of the presentation, you will find a chart of server operating systems shipped since 1999. As you can see for yourself, Linux was already on the chart back in 1998 and by 2000, the growth was noticeable to IBM. They didn't make that happen. It happened because people adopted Linux, knowing it really worked well. As SCO even says in their memorandum, Palmisano came back from an overseas tour of IBM partners having found out that the new generation loved Linux, and that is why he decided to support it.

SCO would like you to think there was something criminal in that. But the truth is, it was just business smarts. IBM didn't make the new generation fall in love with Linux. It merely noticed and decided to act to benefit from noticing early in its surge upward and to Linux-enable their products and services, as the former IBM CEO Lou Gerstner puts it in his quotation on page 10.

That is what businesses do, is it not? They compete for business. One way is to be first to spot the next hot thing, like IBM did with the Internet, unlike Microsoft which almost missed the train altogether.

And look at page 28. It's one of the success stories of a company switching from UNIX to Linux, Deutsche Bank AG in London, ironically enough. They went from 8+ hours to 20 minutes to do calculations. How stupid would a business have to be not to want to make a switch like that? Is it SCO's position that the increase in speed comes from stealing UNIX's code, methods and concepts? If so, then why is Linux blazingly fast in comparison to Unix? If SCO's theory were true, how come the "bicycle" is faster than the "race car"?

Here is the memo in full:

Enterprise Systems Group
Samuel J. Palmisano

________________

From: SJP Comm/Somers/IBM @ IBMUS on 01/10/2000 09:14 AM EST

To: ESG EMPLOYEES US07 0021, ESG EMPLOYEES US07 0022, ESG EMPLOYEES US07 0023, ESG EMPLOYEES US08 0001, ESG EMPLOYEES US08 0002, ESG EMPLOYEES US09 0001

cc:
Subject: Next Generation e-business

During the past two-to-three months, we've taken a close look at our server business and what we need to do to get our momentum back.

Today we're taking a first step by making a significant announcement to support Linux and the open source movement and to drive the next generation of the Internet. We intend to be a leader in our industry by:

making all of our server platforms Linux ready;
engaging closely with the Linux community to help Linux evolve; and,
making IBM technologies available to the Linux and open source communities.

This is important news for IBM and for our customers. Here's why:

Over four years ago, IBM stated that the Internet was about more than just browsers; it was about a new way of doing business. Since then, IBM's leadership and view of e-business have helped transform the world.

We believe we're now on the brink of another important shift in the technology world. The next generation of e-business will see customers increasingly demand open standards for interoperability across disparate platforms. Linux -- a community-developed version of UNIX -- will play a pivotal role in this. We will embrace Linux on our server platforms -- and help it become one of those open standards as a natural extension of our commitment to e-business and the next generation of the Internet.

To spearhead that work effort, we are creating a new organization, headed by Dr. Irving Wladawsky-Berger, who has been named vice president, technology and strategy, reporting to me. He was general manager, Internet Division, Software Group.

Irving's organization will have responsibility for our UNIX software efforts, advanced architectures and technologies, and IBM's next-generation Internet strategy. With IBM as the industry's e-business leader, there is no longer the need for a stand-alone Internet Division, since the entire company has been focused on Internet themes for several years.

As we look to the future, we will continue our aggressive push in the UNIX marketplace with our industry-leading RS/6000 and NUMA-Q servers, our award-winning AIX operating system and our efforts to evolve AIX in Project Monterey.

We believe the long-term growth of the Internet is about common application platforms that can harness leading-edge technologies and simplify customers' choices. We believe Linux will develop into that type of common platform. By getting in early and being a key player in the open source community, IBM will be a leader in working with the industry to advance Linux into the future and bring our customers into the next generation of e-business.

This is a long-term play. Significantly, this is not only about servers. There is a huge opportunity for services. For software. For all of IBM.

So this is one step. You'll be hearing from me in the next few weeks on other key initiatives that, in aggregate, will restore our momentum and help us turn our business around. Stay tuned.

(Embedded image moved to file: pic10901.pcx)
Senior Vice President & Group Executive
Enterprise Systems Group

You may read more about IBM's Linux activities, RS/6000, NUMA-Q and AIX successes at http://w3.ibm.com/servergroup

Another news article they cite is interesting because they use it to tell the court that IBM has invested heavily in Linux, which IBM has already told the court is true. To SCO, it's proof of a plot, to beef up services as a revenue source and thus to kill off software-selling vendors, like Sun and SCO. But in the article, an interview with Jim Stallings, IBM's Linux general manager, it's obvious that the growth in their services business comes as a surprise to IBM:

"The services business is growing much faster than we ever thought," doubling annually, said Jim Stallings, IBM's Linux general manager, in an interview at the LinuxWorld Conference and Expo. "Services is growing faster than servers, and middleware is growing faster than servers."

This article, which SCO doesn't cite, from January 2001, says they did it to try to change their image as a stodgy company and it too says that it happened after Palmisano's world tour of customers:

IBM Corp. Wednesday moved to slough off its reputation as a stodgy, slow-moving enterprise by throwing its considerable support behind Linux.. . . . Palmisano, who has been with IBM for 30 years, said he first became interested in Linux after accepting his present position with the company. At that point, he traveled around the world meeting with customers and the one thing everyone was talking about, he said, was Linux.

He also did it, according to his speech at Linux World, reported on in this article, because he grasped a simple truth: no company, not IBM, not Microsoft, no company can match the development of Linux, not with all their money:

"Communities working together can produce exciting, wonderful, quality work," he said. "IBM spends $5 billion in research and development a year. We can't match this," he said opening his arms to embrace the audience.

He is right, of course. No company can afford to hire all the Linux contributors, and even if they could, they'd likely get rejected by many. It's not about furthering IBM's goals. It just isn't. But he was smart enough to see that Linux is an enabling technology and that it was the future of software.

The article is significant for pointing out what IBM's real contribution has been, and it isn't code. It's credibility and support:

"In the year since IBM embraced Linux as key to the evolution of e-business, our customers have rapidly adopted Linux in real e-business solutions. Linux is now ready for real e-business," said Irving Wladawsky-Berger, IBM vice president of technology and strategy, Server Group. "Now, in addition to providing top to bottom Linux support for our hardware and software, we're investing in Linux services so that IBM can assure our customers that the level of support they have come to expect for their enterprise computing environments will be available for Linux."

Stallings is also quoted defending Red Hat from Sun's lock-in mantra:

Stallings also took issue with a prominent rival, Sun Microsystems Chief Operating Officer Jonathan Schwartz. Schwartz argues that the success of top Linux seller Red Hat has allowed the company to lock customers into their software, success that has forced IBM to back Novell's SuSE Linux.

Lock-in is a matter of degree, Stallings said, and it's less with Linux than with other operating systems. "There's a lot more freedom of movement from servers underneath and applications on top with Linux in the middle," Stallings said. "Windows has control points. There's no way out."

SCO also cites a press release from January of 2003, but they provide the wrong url. If you go to the link they give the judge, you will find only 2004 and 2005 press releases. If you want January of 2003, you have to go here. I went down the list looking for that press release, checking by plausible titles. If you find it, do sing out. ( Update: Jaywalk informs me that if you go to the IBM press releases page and choose biographies on the left, you will find the phrase in his bio.) I also searched by keywords: Palmisano 2003 Linux January but I found nothing. So, again, I figured they just searched on Google, so I did the same, and here is a page that uses the phrase in question, but notice how many other irons in the fire Mr. Palmisano has had going on in addition to the Linux activities, and ask yourself if he is really the right man to talk about the details of the Linux strategy after all:

Biographical Information of CEO

Sam Palmisano is chairman of the board and chief executive of the corporation. He was elected Chairman in October 2002 effective January 1, 2003. Mr. Palmisano has served as executive officer since March 2002. Prior to his appointment, Mr. Palmisano was President and Chief operating officer.

Mr. Palmisano has held a number of key leadership positions during his IBM career, including senior vice president and group executive for IBM's Enterprise Systems Group, where he led IBM's adoption of the Linux operating environment, as well as the launch of the company's unified eServer family. Prior to that, Mr. Palmisano was senior vice president and group executive for IBM Global Services, with responsibility for the worldwide operations of the largest and most diversified IT services organization in the industry.

Mr. Palmisano has served as senior vice president and group executive for IBM's Personal Systems Group; led IBM's strategic outsourcing business; and was president of the Integrated Systems Solutions Corp. (ISSC), an IBM wholly owned subsidiary, and now part of IBM Global Services. Before joining ISSC, Mr. Palmisano was IBM senior managing director of operations for IBM Japan. He joined IBM in 1973 in Baltimore, Maryland.

He isn't a programmer. And Linux was only one piece of all he had going on. He started as a salesman with the company. I find it quite plausible that, after making the decision to support Linux following his trip abroad, he delegated the implementation to others. That is what heads of divisions do. That is not to diminish his role, just to say that I doubt he can speak to the technical issues that are central to this lawsuit. SCO should really have deposed those at IBM who handle the nuts and bolts. They have had since March of 2003 to do so, but in their memo they say the are going to, future tense. I gather they feel they have to in order to justify forcing the CEO to be deposed. I'm not saying they won't get to depose Mr. Palmisano. I'm just saying it is silly, unless they have some other purpose beyond what they are telling the court.

The impression I form is that SCO is stilll learning how to use Google. I say that because they reference the home page for things like news articles, which will bring the judge not to the article but to the current page. That spells inexperience to me, or that they prefer that the judge and you and I not check.

They used Google to find information on Mr. Palmisano, I gather, and they stopped before doing the kind of careful research that you need to do to be positive you are right. I wrote about that in the previous article, about how dangerous it is to rely on only partial information. Here is an example.

They likely will be able to depose him, but what they will then elicit from him is the tale you can find for yourself by doing thorough searching on Google, as I just did, namely that IBM's Palmisano got interested in Linux because of a world tour of IBM's customers which convinced him that the younger generation was talking about Linux and *they* were wanting it. It was, therefore, the future. It had nothing to do with taking shortcuts to kill Solaris, as SCO tries to spin it here, although obviously any company would hope to pull ahead of the competition. That's every company's goal. And it isn't illegal, last I looked.

So the last piece is now in place in my mind: IBM wasn't trying to kill UNIX. Mr. Palmisano simply had the intelligence and good business sense to notice that the world had begun to switch to Linux, that the younger generation all loved it, and he realized it would be prudent to include Linux in IBM's offerings. The Palmisano memo also shows that the company itself had no idea Linux would take over everything the way it has, though, and they at the time still believed that Project Monterey would continue. Whatever customers wanted, IBM would provide it. They were simply positioning themselves to offer whatever their customers wanted, but they also had a solid hunch that for a lot of their customers, it was going to be Linux. All the rest from SCO is the kind of wild guessing that result from inadequate research and a hostile imagination. Case closed.

And with that, here are the legal filings, and our thanks go to bstone for transcribing them for us.

****************************

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE
[address, phone, fax]

Stephen N. Zack (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]

Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
Sean Eskovitz (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER
[address, phone, fax]

Attorneys for The SCO Group, Inc.

___________________________

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

__________________________

THE SCO GROUP, INC.

Plaintiff/Counterclaim-Defendant

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff

____________________________

MEMORANDUM IN SUPPORT OF
SCO'S MOTION TO COMPEL IBM
TO PRODUCE SAMUEL J.
PALMISANO FOR DEPOSITION

Case No. 2:03CV0294DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells

____________________________

The SCO Group, Inc., by and through counsel hereby respectfully moves the Court to compel International Business Machines Corporation ("IBM") to produce Samuel J. Palmisano for deposition, for the reasons set forth in supporting memorandum filed herewith. DATED this 12th day of January, 2005

HATCH, JAMES & DODGE, P.C.
Brent O. Hatch
Mark F. James

BOIES, SCHILLER & FLEXNER LLP
Robert Silver
Stephen N. Zack
Edward Normand
Sean Eskovitz

By _____[signature]___

Counsel for the SCO Group, Inc.


CERTIFICATE OF SERVICE

Plaintiff/Counterclaim Defendant, The SCO Group, Inc., hereby certifies that a true and correct copy of the foregoing Motion to Compel IBM to Produce Samuel J. Palmisano for Deposition was served by mail on Defendant International Business Machines Corporation on the 12th day of January, 2005, by U.S. Mail to:

David Marriott, Esq.
Cravath, Swaine & Moore LLP
[address]

Donald J. Rosenberg, Esq.
[address]

Todd Shaughnessy, Esq.
Snell & Wilmer LLP
[address]

___[signature]____


****************************

Brent O. Hatch (5715)
Mark F. James (5295)
HATCH, JAMES & DODGE
[address, phone, fax]

Stephen N. Zack (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER LLP
[address, phone, fax]

Robert Silver (admitted pro hac vice)
Edward Normand (admitted pro hac vice)
Sean Eskovitz (admitted pro hac vice)
BOIES, SCHILLER & FLEXNER
[address, phone, fax]

Attorneys for The SCO Group, Inc.

___________________________

IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF UTAH

__________________________

THE SCO GROUP, INC.

Plaintiff/Counterclaim-Defendant

v.

INTERNATIONAL BUSINESS
MACHINES CORPORATION,

Defendant/Counterclaim-Plaintiff

____________________________

MEMORANDUM IN SUPPORT OF
SCO'S MOTION TO COMPEL IBM
TO PRODUCE SAMUEL J.
PALMISANO FOR DEPOSITION

Case No. 2:03CV0294DAK
Honorable Dale A. Kimball
Magistrate Judge Brooke C. Wells

1

[UPDATE: May 6, 2005: The court has sealed this document. Until it is unsealed, Groklaw has removed it.]

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