What if SCO really could establish that it owned the copyrights to System V, and what if it really could convince a judge that you can infringe methods and concepts without identifying any code, and what if they could demonstrate that IBM had in fact infringed SCO's Most Holy IP, then what? What would the damages be, I wondered? That's what the experts are probably trying to figure out, at least SCO's experts, although with no specific code to work with, they may be having a hard time doing the math. Here's a piece they might not know.
I stumbled across an article on vnunet from August of 2000, "The End of the Line for Unix?" just now that I thought I'd best add to our collection, because it indicates what the Caldera-Santa Cruz deal was actually worth. It also adds a piece of information that to me indicates that Santa Cruz's Unix business was in serious decline by the summer of 2000, having been eaten alive by Linux prior to the Caldera purchase and prior to IBM leaving Project Monterey in spring of 2001 and prior to any Linux contributions SCO started out complaining about.
On its worth and why it was on the market in the first place:
SCO, which generated revenues of $223.62m for fiscal 1999, sold its Unix division and professional services group to Caldera for $7m in cash and 17.54 million shares, giving it a 28 per cent stake in Caldera.
The two claim that this values the acquisition at about $300m, but based on Caldera's stock price - which stood at $7 on 2 August, the day of the purchase - this would mean that the business is currently up for grabs at the bargain basement price of $130m. The acquisition is scheduled to be complete by early October depending on regulatory and shareholder approval.
The move follows a crash in SCO's share price from a high of around $34 at the end of last year to only around $3 now, with analysts claiming that the company has been hit by the rapid growth of the Linux open source operating system (OS) in the commercial sector.
Peter Lemon, research manager at IDC's commercial systems group, said: "SCO has been very exposed to Linux attacks and it's been hit worse by the Linux phenomenon than anyone else. The problem is that the high end of the market is going to 64bit and the low end is going to Linux."
Interesting, isn't it? Linux was already eating SCO's lunch. Note the date. (Confirmation in this 2001 article by Steven J. Vaughan-Nichols: "SCO’s customer base has eroded over the years and dramatically declined between 1999 and last year (SP, April 16, p. 30, www.smartpartnermag.com/issues).") No wonder IBM quit Project Monterey. It seems a rational business decision, with this information included, doesn't it? And all this had happened before it contributed to Linux the code that SCO originally was complaining about, not that they can find it in the code base as it turns out, unless you credit their inventive theory of ownership that what's theirs is theirs and so is yours.
The article provides another interesting fact, a detail about Compaq and how it fits into this whole picture:
Sales of the firm's [SCO's] legacy Unix OS, which is now in maintenance, amounted to $11.1m in the third fiscal quarter of 2000. SCO will continue to hold the intellectual property to its baby.
But the deal also means that Caldera will now handle all sales, marketing and support not only of OpenServer, but of the NonStop Cluster technology that SCO licenses from Compaq.
Of course, Compaq supported Project Monterey and it also, along with SCO, worked to unify Unix standards:
Compaq has also backed another initiative, recently launched by major Unix players, that could be as important as Monterey.
Leading Unix players - including IBM, SCO and Sequent - have agreed to develop and publish a set of guidelines for software developers and hardware manufacturers to make their products run on any Intel-based Unix system without having to be rewritten, or recompiled.
Compaq has joined Intel and HP in backing this standards effort, called the Unix Developers Guide, which is based on specifications drawn up by the Open Group's Unix98 initiative to standardise Unix features across different platforms.
Why did they all agree to do this, since they were competitors? The article explains:
Only a few years ago Unix's original goal of providing a unified, non-proprietary operating system was lost in a sea of competing semi-proprietary versions of the platform.
In the last four years, however, the high cost of competing in the marketplace, the rise of Windows NT, and the reluctance of application developers to support more than a handful of Unix variants has forced a dramatic fall in the number of versions under active development.
I thought I'd point that out, in case any of you think the future for Linux would be so great if we could just have the "freedom" to allow proprietary codecs and drivers or let vendors close rights off with hardware. Please remember that the Unix folks tried that semi-proprietary route already, thinking it would increase profits and market share, and it failed miserably. For you "pragmatists" who say there's nothing wrong with closed, proprietary software, here's what's wrong with it: people don't want it. If you give them a choice, they'll choose open every time. They wanted Unix until it stopped being open, and then the market declined precipitously. End users like open. Why wouldn't we? It gives us the opportunity to modify the software to do exactly what we want individually, as opposed to what some vendor guesses the largest group of its customers probably wants. Sooner or later with closed software, you end up helpless, like Linus and Bitkeeper.
Caldera's plan was to combine Unix with Linux, to make a semi-proprietary hybrid, as then-CEO Ransom Love told everyone in a conference call, and that made the world ask the obvious question -- what would happen to Project Monterey now, if Caldera was intending to offer a competing platform? Notice that Project Monterey was already considered very nearly dead in the water in August of 2000:
But the situation also raises a question mark over the future of Project Monterey.
SCO and IBM started work on Monterey in October 1998 with the aim of making their respective Unixware and AIX Unix variants source code-compatible before porting the resulting OS to Intel's 64bit Itanium processor.
Love appeared to confirm his commitment to the environment during the conference call. "Monterey will continue, but we'll put Linux management and compatibility in the layers above and combine our efforts with the IA64 Linux work. We have a legal obligation to IBM with Monterey and we intend to move it forward aggressively," he said.
"We'll provide on IA64 what we'll provide with UnixWare on the 32bit platform. An API/ABI [application binary compatible] layer is very compelling for partners. Customers will have the choice of whether they want to migrate to Linux, Monterey or Unixware. The goal of combining the companies is to provide them with choice and consistency so the layers above the kernel become the same no matter what that kernel is," he added.
The development of a 64bit version of Linux is taking place under the auspices of Project Trillian, an industry group which includes IBM, Red Hat, VA Linux and Caldera in its line up of members. But the real question now is which OS will become dominant in the development effort?
Phil Payne, an independent analyst, said: "This implies that Monterey is being parked and merged into Trillian. It's another nail in the Monterey coffin. IBM will retain the AIX branding, but Monterey is perceived as a proprietary OS and the public wants Linux, which it sees as open. It's about mind share and public perception."
"Why does IBM need another fringe proprietary OS? Monterey faces the same application development problems as IBM did with OS/2 and can IBM succeed in that game? It hasn't in the past," he added.
So, at least one analysts then saw the Caldera purchase as an indication that Project Monterey was being "parked" -- and by Caldera, not IBM, which had not yet backed off. Why then did Project Monterey die? The analyst says the public wanted Linux, not proprietary software.
And what was that again about API/ABI compatibility? Hmm. So, even after Santa Cruz was out of the picture, and Project Monterey was being given Last Rites, Caldera worked to make Unix and Linux ABI compatible, eh? SCO told us that it was only in Project Monterey's context that this was contemplated, and here is an article from 2000 saying that Caldera wanted this compatibility even afterward, and quite outside of any Project Monterey context. Well, well.
Why did Love want to purchase Santa Cruz's Unix business? Was it for software code the public no longer wanted? The article tells us that too:
Love hinted at the company's motivation during the conference call. "The Linux business is not about lack of applications now, although we are addressing this with the acquisition. It's about expertise and we've got that now via SCO's professional services group," he said.
"Companies like a trusted partner to deploy systems in a more commercial, pervasive manner and that is now resolved. We'll bring an element of business vitality unparalleled in this segment. No other company can address high availability like us in this space," he added.
What Caldera wanted was the existing reseller partnerships and contracts, and professional services divisions. People. Contracts. Partnerships. The code itself wasn't worth the purchase price paid, by that reckoning. It wasn't even at the top of the list of value, so even if SCO could win anything at all in this loco litigation, the actual value of the whole deal was, according to the article, less than what they claimed and less than they are now claiming. How much less would the software alone be worth, code which people didn't want any more? And wouldn't you have to subtract the Compaq software from your equation also to calculate what the market thought that Unix code was worth, since SCO merely licensed it from Compaq?
Now we know more of the story. Linux was a "phenomenon" that was eating Santa Cruz's lunch before IBM did whatever SCO claims it did. IBM therefore could not possibly have contributed to Linux technology with the motive of and the effect of killing off Unix so as to ruin SCO's Unix business. It had happened already, and before Caldera even made the purchase from Santa Cruz, before IBM had made the contributions to Linux that SCO is suing over.
Buh bye, billions.