SCO changing industry, not slowing Linux

A year ago this month, the SCO Group exited the Linux business, announcing it would cease sales of the open source operating system and claiming it would have a “stronger focus on Unix and the company’s growth strategy around Web services.”

But Linux has continued to define the tiny company, which has captivated the high-tech industry during the past year with its drumbeat of allegations about Linux and its snowballing list of lawsuits related to the company’s intellectual property claims.

Although some open source advocates claim SCO’s strategy was designed to slow down the rate of Linux adoption, today that scenario does not seem to have panned out.

Linux server shipments jumped by 52 percent in the fourth quarter of 2003, according to research company IDC, which expects Linux to almost double its market share from 16 percent in 2003 to 30 percent by 2008.

Furthermore, Linux is moving into markets historically slow to adopt new technologies, said Efrain Rovira, director of Linux worldwide marketing at Hewlett-Packard.

“Linux is penetrating more; it’s penetrating deeper,” Rovira said, pointing to the operating system’s growing success on the corporate desktop and in the airline and pharmaceutical industries as examples of this phenomenon.

Rovira believes that if the SCO lawsuits have had any impact on the industry, it is that they have made users reluctant to talk about their Linux use for fear that they may join DaimlerChrysler and AutoZone as the next targets for an SCO lawsuit.

“Nobody wants to put a target on their back, and [customers have] been very blunt about telling us, ‘We don’t want you to use our name,’ ” Rovira said. “A year ago, customers were more willing to speak about what they were doing.”

Charles King, an analyst at Sageza Group agreed, saying that if SCO’s strategy was to create uncertainty about Linux, the company has not been successful. With the number of lawsuits ballooning and one of SCO’s major investors, Baystar Capital, asking for its money back, SCO may be in real trouble. “It’s got all the makings of a company that’s very badly overextended,” King said.

In the past year, Novell, Red Hat, and HP have all begun offering indemnification to their Linux customers, and new companies such as Open Source Risk Management and Black Duck Software offer services to reduce risks relating to open source intellectual property.

Still, SCO faithful, such as John Moore, president of Moore ComputerConsultants, give the Unix vendor credit for remaining a viable company.

“Linux is going to find its place. If it lowers the cost of doing business, that’s the bottom line, and that’s what’s going to make it fly,” Moore said.