CA confirmed as being SCO licensee

'What were they thinking?' asked Bruce Perens, a founder of the Open Source Initiative

Software giant Computer Associates International Inc. has signed up for The SCO Group Inc.'s Intellectual Property License for Linux, SCO Chief Financial Officer Bob Bench confirmed yesterday. Two other companies, natural gas supplier Questar Corp. and manufacturer Leggett & Platt Inc., have also signed up for the controversial licensing plan, Bench confirmed, bringing the total number of publicly announced licensees to four.

SCO maintains that the Linux operating system contains numerous violations of its intellectual property. In August, the Lindon, Utah-based company began offering the IP License for Linux to select companies, saying that they could avert the risk of future litigation by paying $699 for each of their computer processors running Linux.

On Monday, SCO revealed that EV1Servers.Net, the hosting division of Houston's Everyones Internet Ltd., had signed up for the IP License for Linux (see story).

CA was one of three companies named as a licensee in a Feb. 4 letter written by SCO's attorney, Mark J. Heiss of Boies, Schiller & Flexner LLP, and addressed to David R. Marriott of Cravath Swaine & Moore LLP, who is representing IBM in a lawsuit involving the two companies. The letter was submitted as evidence by IBM and published on the Web site.

In an interview yesterday, Bench confirmed that the three companies were licensees and claimed that SCO had between 10 and 50 IP License for Linux customers.

The company's SCOsource program, which seeks licensing fees for SCO's intellectual property, booked $20,000 in revenue for its most recent quarter, Bench said, all of it from sales of the IP License for Linux. However, SCO's CFO couldn't predict how much the company expected to make from the licenses during its next quarter. "We have many companies that we're talking to right now," Bench said. "We don't know how quickly they will move."

Questar, one of the licensees mentioned in Heiss' letter, said its decision to purchase the IP License for Linux was a matter of simple economics. "Our usage of [Linux] is so small and isolated that we went ahead and signed the contract," said Chad Jones, a spokesman for the Salt Lake City company. "This was small enough that we made a business decision based on the modest cost of SCO's claim that it was in our interest to settle rather than litigate this thing."

Observers were puzzled about CA's decision to purchase the license, suggesting that by supporting SCO, CA might hurt its image as a supporter of Linux.

"What were they thinking?" asked Bruce Perens, one of the founders of the Open Source Initiative. "I think this sends a very strange message, and I'd like to hear a real explanation out of CA."

Charles King, an analyst at Sageza Group Inc., said it made little sense for any company to purchase SCO's license. "The IP [intellectual property] that SCO claims has still not been proven or upheld in court, so what are you buying?" he said. "As far as I can see, it's the equivalent of giving the neighborhood bully 25 cents so he doesn't steal your lunch next week."

CA declined to comment on this story. Representatives from Leggett & Platt didn't return calls seeking comment.


Copyright © 2004 IDG Communications, Inc.

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