In-Depth

Has the Clock Run Out on AIX?

SCO's deadline for IBM compliance passes uneventfully

• By Stephen Swoyer
• 06/17/2003

Last Friday, that deadline came and went with nary a peep from SCO.

SCO has charged IBM with breaching the terms of its Unix license by deliberately misappropriating its proprietary Unix source code to help accelerate the development of Linux—largely to the detriment, it says, of Unix running on Intel-based processors.

The embattled company has threatened to revoke IBM’s license to sell Unix if Big Blue doesn’t comply with its demands.

Not surprisingly, IBM has maintained its innocence and not said much of anything else. (See http://info.101com.com/default.asp?id=1277 for more on IBM's response.) In the context of pending litigation, Big Blue has been relatively tight-lipped about its legal strategy.

Even if the computing and services giant had admitted wrongdoing, there’s another, more significant problem with SCO’s demand, speculates Jonathan Eunice, a principal analyst and IT advisor with consultancy Illuminata Inc.

“I don’t believe that there is a very clear indication of what SCO wants IBM to stop doing,” he asserts. “The complaint against IBM … is that it has misappropriated intellectual property from SCO products into the Linux community. It is not clear to me that there is an accusation of ongoing infringement, so it’s hard to identify what on a day-to-day basis IBM would stop doing in order to comply with the SCO demand.”

SCO Surges on Publicity

Eunice isn’t the only analyst suggesting SCO’s ultimatum to IBM—and its implicit threat of an injunction to prevent Big Blue from shipping AIX—is largely a publicity stunt.

“What SCO wants to do is create an impending event that forces IBM to come to the table on [SCO’s] own terms, so we’re going to see an awful lot of drama here, but the likelihood of them getting an injunction to prevent IBM from shipping AIX is close to slim or none. Very close to none,” comments Rob Enderle, a senior fellow with Forrester Research subsidiary Giga Information Group.

SCO, for its part, has attempted to downplay claims of publicity mongering by staking out the idealistic high ground in its fight against IBM and Linux. “We are trying to protect our intellectual property. This may not be the most popular position, but what’s popular isn’t always right,” asserts Chris Sontag, SCO senior VP and GM of the company’s SCOSource IP-licensing initiative. Sontag and SCO have used this rationale to defend many of the company’s most sensational moves, such as the decision to first target IBM, and later to expand SCO’s fight to include Linux.

Eunice and other analysts believe that SCO’s motivations are somewhat less than idealistic. The company’s stock price, after all, has surged on the news of its action against IBM, closing at more than $11 per share last Friday. Since March, SCO’s shares have crested at a high of $11.95. That’s a big change from February of this year, when shares of the embattled company’s stock traded for under $2. SCO’s 52-week per-share low is 60 cents.

“I have noticed that since the lawsuit, the value has gone up, possibly as a result of all of the publicity that SCO has gotten,” observes Eunice. “To the degree that it makes sense for them to make this a very public fight, to make this a very sensational fight, it has obviously benefited them.”

That’s why it wasn’t surprising to find SCO back on the attack last week. Bounced from the front pages by Oracle Corp., which snagged the lion’s share of headlines when it disclosed plans to mount a hostile takeover attempt of enterprise applications specialist PeopleSoft Inc., a SCO representative hinted on Friday in an interview with News.com that his company could soon pursue action against another North American hardware manufacturer.

Clock (Still) Tick-Tick-Ticking on AIX

SCO hasn’t pulled many punches thus far in its crusade against Linux. The embattled company took aim at the industry’s biggest target—IBM—right from the start, and surprised many observers when it sent ominous letters of warning to 1,500 companies that use Linux. Some analysts have expected SCO to file an injunction to prevent IBM from shipping AIX, its version of Unix.

As of press time, however, SCO hadn’t made a move of any kind.

For his part, Illuminata’s Eunice flatly asserts that regardless of what SCO does, IBM will continue to ship its Unix operating system. “I don’t think this has that much repercussion in practical sense, because IBM is not going to stop selling AIX,” Eunice asserts. “It would take a very high level of proof on SCO’s part that IBM has willfully infringed for it to get an injunction. If there were that much proof available, if it is infringement, often that is a negotiable fact. You use that in negotiations before you go and file a lawsuit.”

Giga’s Enderle—himself a former IBM-er—agrees. In order to get an injunction against IBM to prevent it from shipping AIX, Enderle says, SCO would “have to be able to show two things: That the shipment of AIX is going to do them irreparable damage, and that they actually have a chance of winning the case. The clear and present damage part is a tough threshold to cross, and I’m having a hard time picturing a judge granting them the injunction that they want.”

Instead, the matter will be decided in court: “To the degree that this goes to court, it’s going to be decided on fairly precise legal and technical grounds. I just don’t believe that SCO will be able to keep IBM from selling Unix,” suggests Eunice.

Representatives from IBM could not be reached for comment.

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