Winning The SCO Way

In what will surely go down as one of most bizarre chapters in tech history, SCO last week filed a lawsuit against AutoZone, claiming the Memphis, Tenn.-based auto-parts chain ran versions of Linux that "contain code, structure, sequence and/or organization from SCO's proprietary Unix System V code in violation of SCO's copyrights." To add insult to injury, the company said it plans to file a similar suit against auto maker DaimlerChrysler AG as part of its all-out assault on Linux.

The timing couldn't have been better. It speaks volumes that SCO filed the suit as it reported a net loss of $2.25 million for its fiscal 2004 first quarter, as well as plummeting sales, which fell to $11.39 million from $13.54 million a year earlier. SCO, by the way, spent more than $3 million in legal fees during the quarter and expects the same level of spending to continue over the next several quarters. So customers are being sued, and lawyers are rolling in the dough.

In spite of all the legal wrangling, the free market rolls on. If we have learned anything from the Justice Department's long-running legal battles with Microsoft and IBM, it's that litigation doesn't halt the market. Linux continues to gain momentum, and for good reason: It provides stability and cost advantages via a services-based model, rather than a software license-based model. One sign of Linux's broad impact was last week's announcement by Ingram Micro, the world's largest computer products distributor, that it plans to offer a suite of Linux and other open-source technology products, solutions, support and training services.

Tim Shea, co-owner of AlphaNet Solutions, said he expects the Worcester, Mass.-based solution provider's Linux business to quadruple this year. He characterized SCO as a weak company that's not going to survive by suing clients and said he doesn't expect the suits to impact his Linux business.

"They can't shut down Linux," Shea said. "I think this will be thrown out of court. SCO is in a position where they are basically sour grapes over where the universe is going. They are trying to stop a tidal wave."

Let the tidal wave roll on. Look out SCO, here it comes.

What do you think of SCO's legal maneuvering? Let me know at (781) 839-1221 or via e-mail at [email protected].