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Linux Heavily Used in the Enterprise by 1999 - And SCO Knew It or Could/Should Have - Updated
Wednesday, May 11 2011 @ 04:17 AM EDT

Remember how SCO told the court in SCO v. IBM that Linux wasn't ready for the enterprise until IBM got involved in the year 2000 and allegedly worked to make it "hardened" for the enterprise by donating code? It said that it wasn't until 2001, with version 2.4 of Linux, that Linux was ready for enterprise use. Linux, SCO said, was just a bicycle compared to UNIX, the luxury car, until IBM did all that.

Not only is that chronology not true, I think I can show you evidence that SCO knew it was not true or could have and should have known. Just in case the case ramps up again in some form, I thought it would be good to add the evidence to our collection.

Here's what SCO wrote in its original complaint:

84. Prior to IBM’s involvement, Linux was the software equivalent of a bicycle. UNIX was the software equivalent of a luxury car. To make Linux of necessary quality for use by enterprise customers, it must be re-designed so that Linux also becomes the software equivalent of a luxury car. This re-design is not technologically feasible or even possible at the enterprise level without (1) a high degree of design coordination, (2) access to expensive and sophisticated design and testing equipment; (3) access to UNIX code, methods and concepts; (4) UNIX architectural experience; and (5) a very significant financial investment.

85. For example, Linux is currently capable of coordinating the simultaneous performance of 4 computer processors. UNIX, on the other hand, commonly links 16 processors and can successfully link up to 32 processors for simultaneous operation. This difference in memory management performance is very significant to enterprise customers who need extremely high computing capabilities for complex tasks. The ability to accomplish this task successfully has taken AT&T, Novell and SCO at least 20 years, with access to expensive equipment for design and testing, well-trained UNIX engineers and a wealth of experience in UNIX methods and concepts.

86. It is not possible for Linux to rapidly reach UNIX performance standards for complete enterprise functionality without the misappropriation of UNIX code, methods or concepts to achieve such performance, and coordination by a larger developer, such as IBM.

SCO removed the bicycle analogy in its second amended complaint, but the theme remained the same:
82. To make Linux of necessary quality for use by enterprise customers, it needed to be re-designed and upgraded to accommodate complex multi-processor functionality that had taken UNIX nearly 20 years to achieve. This rapid re-design was not feasible or even possible at the enterprise level without (a) a high degree of design coordination, (b) access to expensive and sophisticated design and testing equipment; (c) access to UNIX code and development methods; (d) UNIX architectural experience; and (e) a very significant financial investment. The contributions of IBM, which had access to UNIX System V Protected Materials and years of enterprise level experience, made possible this rapid redesign of Linux for enterprise use.
And at the SCO v. Novell trial, SCO's expert Dr. Gary Pisano sang essentially that same song:
Q. Was Linux always able to compete with UNIX?

A. No.

Q. Can you explain?

A. Yes. Initially, Linux was actually developed by a graduate student in Finland, Linus Torvalds, and initially it was really a bit of a hobbyist's toy. A few computer aficionados played with it and made contributions. Over time, however, it began to get used in businesses. Initially, just for very simple business applications. So in -- for a computer server, web serving, just serving up web pages, it is a very simple function. But over time, as it got more capability, it could -- it could take on more difficult tasks and more complex tasks for the businesses such as transaction processing.

Q. Is there something called enterprise hardening?

A. Yes.

Q. Can you explain what that is?

A. Yes. That again refers to building in capability and functionality into the operating system to make it reliable, more available, and more scalable. That is you can use it at -- for lots of -- lots of users and use many of them.

Q. Did there come a time when Linux became enterprise hardened?

A. The first point at which that really happens is with the introduction of Linux version 2.4 which is introduced to the market in January of 2001 or February of 2000 -- announced in January 2001, available in February of 2001. That really began to include some elements that made it enterprise hardened.

Q. And how did that affect Santa Cruz?

A. This had a very significant impact on them because, again, as I explained before, you have this operating system, Linux, which could do a lot of the same things that UNIX could do and it just ate right into the market share.

Darl McBride echoed the same sentiment when it was his turn on the witness stand:
Q. Can you explain how Linux became a competing operating system?

A. Yes. Linux, as we talked a little bit about yesterday, in the initial phases was somewhat of a hobbyist tool, a hobbyist operating system. It was like a garage band operating system with college students and free programmers and people getting together and coming up with this fun little operating system. Somewhere along the way, though, there was a transition where it went from being a fun little garage band toy to being a major operating system that big companies used. What happened along the way is we had a joint venture partnership with the IBM Corporation that went sour, and later we found that important materials of ours had found their way via IBM into Linux, which made it a very viable operating system for businesses to buy.

Let's see if this is true.

Here's a Joe Wilcox article from 1999, about Compaq offering Linux for the enterprise:

Compaq is refocusing its corporate strategy along two fronts, selling volume Windows NT and Linux server computers and targeting niche markets for its version of Unix.

The move means major changes for the Tru64 Unix operating system and the Alpha processor technologies inherited from Digital Equipment as well as Compaq's fledgling Linux effort. The company will focus the Tru64 OS on a handful of specialized markets while expanding Linux's presence on its Intel-based ProLiant servers, as it maintains its high-volume market strategy for Windows NT.

"What we are doing, and what we believe all will do long term, is specializing our Unix in select markets," said Steve Kirchoff, vice president of strategic marketing for Compaq's Enterprise and Services group. "We are seeing this need...so we are moving early."

So, in 1999, Compaq had decided to sell Linux. It decided to sell UNIX for niche markets, but Linux and Windows for the rest of its customers. Does that make Linux sound like a hobbyist's toy?

Santa Cruz, of course, wasn't crazy about the trend, but it viewed it as inevitable by 1999, as this article from 1999, SCO to boost revenue by offering Linux services", shows:

Santa Cruz Operation, a veteran of the Unix market, is about join the growing crowd of companies designing and building Linux systems.

SCO will announce Monday that it will help companies set up Linux computer systems, competing with IBM and a several other companies. It's an important--if not necessary--move for the long-time Unix purveyor, whose revenues are threatened by the spread of Linux.

Professional services--essentially high-priced hand-holding for customers who need someone experienced to set up or run complex computer systems--are a growing business for computer companies. Although Linux can be obtained for free, Linux companies are hoping to make money by selling services. SCO is a new arrival in this area, though, because it sells Unix but not its offspring, Linux.

SCO will help customers decide whether Linux is appropriate and which version is best for their circumstances, said David Taylor, vice president of SCO's 40-person professional services group. It's the first time SCO has offered such a service for an operating system other than its own versions of Unix.

SCO sees Linux as an inevitable feature in the business computing landscape and believes its Unix expertise will give it an edge over other consultants, Taylor said.

So, we see that there was by 1999 "a growing crowd" of companies focused on Linux, and SCO itself -- in that very year -- knew that Linux was "an inevitable feature in the business computing landsape". So, what do you think? Did SCO know that Linux was in use and appropriate for the enterprise in 1999, a year before the IBM activity that SCO objected to in its complaint and two years before Linux kernel version 2.4 was released? The title alone tells you that Santa Cruz expected to "boost revenue", meaning they knew or at least hoped that there was real demand in the marketplace already. Obviously, companies were using Linux by then, and rather than lose that business, Santa Cruz decided to bend to the inevitable, while still trying to direct them to UNIX as it could.

Dell confirmed that Linux was already in use, in fact that it was popular by then on servers, and indeed Dell was offering it in 1999, even on business desktops and workstations, not just on servers:

Dell: Linux could sell in volume

Speaking in an interview yesterday, Dell praised Linux and said the newly popular operating system matches the PC maker's high-volume sales model.

His remarks are significant in light of the close relationship Dell has historically maintained with Microsoft. Dell pre-installs Linux on workstations, servers, and business desktops--the only major PC maker to do so--but the company acknowledges that Linux sales so far are only a small fraction of its overall revenue.

Linux is popular in servers, where its Unix roots lie, but the fact that its source code is open and it has so much developer interest has helped it to spread to more ordinary desktops and even small gadgets. Several companies, including Corel and Caldera Systems, are working on making Linux easier to install and use for average computers.

Some analysts have said that adding Linux to a product line gives computer makers more leverage with Microsoft when negotiating how much they'll have to pay for Windows.

So did SCO know Linux wasn't a bicycle totally unsuitable for the enterprise and that it wasn't IBM that made it possible for Linux to be used for business? So much so that in this 1999 article, we learn that SCO developed a way so that users of UnixWare could run Linux applications on UnixWare. Please notice how this Santa Cruz executive, Greg Schwarzer, viewed Linux back then:
Santa Cruz Operation added the ability to run Linux programs to its UnixWare operating system, declaring that the upstart operating system has helped UnixWare more than it has harmed it.

While Microsoft executives say Linux competes chiefly with Unix systems such as SCO's instead of Windows NT, SCO believes the opposite.

"So far as we've seen it's actually helped us," said Greg Schwarzer, director of small and medium business marketing at SCO. "Linux has got the word out that Unix on Intel is a viable alternative to Microsoft."...

The new Business Edition of UnixWare will gradually supplant SCO's OpenServer in the small to medium business market, Schwarzer said, although SCO will continue to support the company's older Unix product by writing drivers, for example. UnixWare will henceforth get most of SCO's development efforts, and OpenServer won't get any new features.

OpenServer is a Unix product ultimately derived from a Microsoft version of Unix called Xenix. UnixWare, on the other hand, is the version of Unix SCO obtained from AT&T, via Novell, in 1995.

In other words, by 1999 OpenServer was thought of as a dying product. Linux was seen as inevitable. Santa Cruz was offering a way to run Linux applications on UnixWare, hoping to hold on to their customers. What should that tell you? It tells me that there were a lot of applications for Linux, more than UnixWare had or ones that were so popular that there was a danger of losing customers to Linux altogether. Remember, this is still 1999.

Let's look at an article from early August, 2000 to see if it was just students and hobbyist programmers involved in Linux:

Linux is receiving significant attention from programmers, students and software companies such as Oracle. Unix, meanwhile, has been relegated to a mere feature of a server bought from Sun Microsystems, IBM, Compaq Computer, Hewlett-Packard or SGI.

Selling operating system software as a standalone product that can work on a variety of computers is a difficult task, said Illuminata analyst Jonathan Eunice.

The business of "hardware-independent operating systems...seems to work only for Microsoft these days," he said.

D.H. Brown Associates analyst Tony Iams said the Caldera acquisition signals the end of an independent Unix.

"Independent Unix is effectively becoming Linux," and over time, Linux will acquire the high-end features of Unix, Iams said.

Eunice agreed that Linux has tremendous momentum. "The attention to Linux is enormous compared to the attention of any of the individual Unixes," Eunice said. "Solaris (from Sun Microsystems) maybe has more momentum than the average Unix, but Linux is clearly the place where people are paying attention."

SCO initially scoffed at Linux as an immature operating system, an adolescent seeking to play in the adult realm of Unix. But in the past two years, Linux has attracted the attention of major companies such as IBM, Dell Computer, Compaq, HP, Intel, Oracle, SAP and countless others. In the end, SCO had to recognize Linux as a serious competitor.

"It's been a gradual evolution," Giga Information Group analyst Stacey Quandt said about SCO's attitude shift. SCO simply couldn't ignore Linux, despite the operating system's relative immaturity. "Linux was eroding their market share on the low end."

Companies were involved already by 1998, large companies, like Oracle. That's three years prior to the release of the 2.4 kernel. Did you see that Oracle was mentioned as the one really interested in Linux back in 1998? Others on the list of those paying attention to Linux included IBM, HP, Intel, Compaq, etc.

When the deal between SCO and Caldera was first set up, Caldera wasn't even going to buy OpenServer, because it viewed it as a dead product. It had decided not to do any more upgrading of OpenServer. Later Caldera added it to the deal, and here is why:

In addition, the acquisition of OpenServer allows Caldera Systems to control the software's future, making it easier for the company to proceed with its plan to encourage customers to switch either to Linux or to UnixWare, Tamang said.

The new terms are among a number of changes in the Linux business landscape, including layoffs at SuSE's North American operation and Turbolinux's planned acquisition of Linuxcare.

SCO stopped development of OpenServer in 1999, and Caldera Systems plans to continue with SCO's practice of only minor updates while encouraging customers to migrate to other operating systems, Tamang said....

Caldera Systems' strategy is to sell operating-system products that span from low-end Linux machines to high-end 32-processor UnixWare servers with advanced features such as clustering. All these products would be able to run Linux software without it having to be rewritten for the non-Linux operating systems....

The original deal didn't include OpenServer because Caldera Systems wasn't interested in a product that essentially was being phased out and because it wanted to minimize how much cash it had to pay, Tamang said. In addition, SCO was interested in the ongoing revenue stream to fund its Tarentella software business.

Not only did Santa Cruz know Linux was heavily used in the enterprise prior to Linux 2.4, so did Caldera. It wanted to control OpenServer, which it also planned not to upgrade much, so that it could direct customers to Linux and UnixWare. There were a lot of companies involved in Linux, not just IBM, as you can see. Both Caldera and Santa Cruz were themselves involved in Linux. It was Caldera's exclusive business for years prior to this purchase. Yet in opening statements in the SCO v. Novell litigation, now being appealed by SCO, Boies Schiller's lawyer Stuart Singer told the jury this:
SINGER: Now what is Linux? It started as a hobbyist tool. It was invented by a man in Finland, a student named Linus Torvalds. In fact, the very name Linux is a combination of Linus and UNIX.

Now Linux is open-source software, which means that thousands of people around the world make co-contributions to it, and the problem is no one can be completely sure where that code is coming from. And Linux was distributed for free. It started as a hobbyist tool. But IBM decided that this would be a great platform around which it could build other businesses and sell products. And so they decided to enhance Linux, make in stronger for a business tool by putting in UNIX technology. The only problem is that UNIX technology belonged to SCO. It was protected by contracts.

And IBM began doing this in early 2000 and 2001. It had a tremendous effect on SCO's business. In 2003, SCO decided they had to do something about it. They decided to bring a lawsuit against IBM, and to ask users of Linux to buy a license, to say, all right, if you want to use Linux, pay us a license so that we're being compensated for the use of what is our intellectual property.

Does this match any of the older articles I just showed you? Incidentally, Dr. Pisano, SCO's expert, knew that Linux was used in the enterprise in 2000, at least, because in his damages calculations in his expert report, he included information from that year and from 1999, as you can see for yourself if you look at the footnotes. The money was calculated from later, because SCO targeted Linux kernel 2.4 starting in 2001, but look at the footnotes, and you'll see data from 1999 onward. I think Dr. Pisano overlooked something else. It was Caldera itself that contributed at least one of the enterprise-hardening features to Linux 2.4 -- Christoph Hellwig, as Groklaw demonstrated way back in 2003. So there's really no excuse.

The jury decided that it wasn't SCO's "intellectual property" anyhow, so in a way it's moot, but just in case the appeals court does the unthinkable and sends this mess back for another trial, it's important to set forth all the details that prove that SCO was blowing smoke. At best.

By the way, it isn't true what Singer said to the jury about not being able to know who writes Linux. You can know who contributes to Linux. There is in every Linux kernel a file, a credits file, that lists everyone who contributed to that version, so that was a boldfaced assertion, considering that you can find all that on the Internet too, since Linux is developed in public. Here's the credits list for Linux 2.4.22, for example. Please notice that information is provided on how to contact them, and precisely what they contributed? Like I say, boldfaced. But then SCO was nothing if not boldfaced.

I just wanted to get this in our collection before I go, because no one has followed the SCO litigations as closely as I have for eight years, and before I go, just in case the SCO dream didn't quite die and someone tries to resurrect the litigation follies, I want all the evidence I've collected to be here.

Update, 2013: They knew, for sure. And here is the evidence, a 1998 SCO press release about Santa Cruz teaming up with Intel to port UDI to Linux:

"Standardization in this industry is what drives up the performance and innovation curves," said Ray Anderson, SCO's senior vice president, Marketing. "Intel's support of UDI as a standard means that all UNIX OS vendors can use a common device driver on all Intel platforms. SCO and Intel will strongly support the movement to standardize the use of UDI for all UNIX platforms on Intel, which we believe will generate even more momentum for the already exploding UNIX on Intel market."...

UDI for Open Source Community

SCO strongly supports the growth of standards-based computing and encouragement of open systems development. SCO, with Intel and Project UDI, will support the open source community by working to ensure that UDI works on the Linux operating system.

Anderson continued, "The Linux and open source movements are powerful forces in the industry that are creating a huge resurgence in the interest in the UNIX System. It helps to bring the community together again and with UDI available on the Linux system, their developers can use the latest UNIX devices and peripherals on the market."

I know. Hilarious. And here's a press release from 2000, just because I found it at the same time, and it's also funny. It's a press release about Santa Cruz and Caldera joining together to merge Unix and Linux. And Caldera refers to itself as a "Linux for Business" leader:
Caldera Systems, Inc., (Nasdaq: CALD), a "Linux for Business" leader and the Server Software Division of SCO (NASDAQ:SCOC) today announced a joint initiative to combine and offer Linux and UNIX server solutions and services worldwide.

The new offerings, announced today at Forum2000, include the Linux Kernel Personality for UnixWare 7 - the first technology developed to bring UnixWare 7 into the Linux business market. Also announced today is Enterprise Support Services, SCO's worldwide support program designed to meet the business and time-critical requirements of enterprise customers.

These offerings fall under the umbrella of the Open Internet Platform (OIP) which combines Linux and UNIX server solutions and services. The OIP provides commercial customers and developers with a single platform that can scale from the thinnest of clients to the clustering needs of the largest data center. The Open Internet Platform combines the robust scalability of the UNIX system with the low-cost, developer-accepted Linux operating system.

"With Caldera's pending acquisition of the SCO Server Software and Professional Services divisions, we already see some progress in the integration of our technologies," said Ransom Love, CEO, Caldera Systems, Inc. "We believe that the combined strengths of Caldera and SCO are key in offering powerful Linux and UNIX solutions to the enterprise."

So they knew Linux was no bicycle. The point of all the work was to benefit Unix, as this 2000 press release shows:
The SCO Server Software Division, an independent business unit of the Santa Cruz Operation, Inc. (Nasdaq:SCOC), announced that it has developed the Linux Kernel Personality (LKP) for UnixWare 7. The new LKP technology is a key step toward the vision of an Open Internet Platform (OIP), discussed in the recent announcement that Caldera plans to acquire the SCO Server Software and Professional Services Divisions.

The new LKP technology unifies UnixWare 7 with Linux at the kernel level and also includes a complete Linux environment. This adds full Linux capabilities to UnixWare 7 while keeping all the major UNIX attributes such as scalability, reliability and clustering intact. Linux applications can install and run on UnixWare 7 without modification, resulting in the addition of a host of new solutions to the wealth of applications already available on UnixWare 7.

"The Linux Personality is great news for both the UnixWare 7 and enterprise Linux markets," said John Palmer, vice president of Marketing, Server Software Division, SCO. "LKP will make the entire Linux application portfolio available for UnixWare 7 customers, including enterprise server applications. At the same time LKP allows Linux customers to take advantage of a highly scalable and cluster-ready operating system based on the proven UnixWare 7 platform. Because the LKP runs at the kernel level, customers will not know it's there - it will just work."

UnixWare 7 customers can now take advantage of an even wider selection of applications in a scalable, cluster-ready computing environment. Linux channel partners and ISVs will benefit from LKP as it will increase the number of operating platforms they can offer to their customers.

"LKP technology is an integral part of Caldera's vision of the Open Internet Platform," said Ransom Love, CEO of Caldera Systems, Inc. "Caldera's pending acquisition of the SCO Server Software Division speeds the movement toward Linux/UNIX integration and the creation of a single platform for Internet computing. SCO's demonstration of this key technology to their partners at Forum2000 will be particularly beneficial to the industry."

Why, a logical person might ask, would UnixWare 7 need Linux apps, instead of the other way around? Because the developers were flocking to Linux. Remember Steve Ballmer's speech about "developers, developers, developers" ? Linux was hot and UnixWare was not.

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