Market dynamics: the battle for enterprise Linux.

Event Summary

On March 7 2003 The SCO Group Inc launched a $1bn lawsuit against IBM, accusing the company of misappropriation of trade secrets, tortuous interference, unfair competition and breach of contract, and alleging that IBM had purposeful destroyed the value of the market for Unix on Intel in order to boost the opportunities for Linux, and its Linux services business.

Later, on May 14, SCO Group suspended the sale of its own SCO Linux distribution and sent a letter to the world's 1,500 largest companies warning them that they may be legally liable if the company could prove its assertion that Linux contains code that has been illegally copied from SCO's Unix System V code base.

Depending on who you listen to, SCO took these actions for one of three reasons: it is rightfully protecting its intellectual property and business interests; it is attempting to maximize its value for a potential acquisition; or it is trying to raise the profile of Unix on Intel through devaluing Linux by spreading fear, uncertainty and doubt about its trustworthiness.

Whatever the reason, the result has been the same. The Unix market was thrown into chaos, with Novell and SCO both claiming to own the copyrights to Unix System V, while the Linux market has been thrown into uncertainty, with no-one quite sure what SCO is about to do next. With SCO making noises about the potential liability of Linux users, it could be make or break time for the Linux operating system.

Market Overview

In order to understand how this situation has arisen it is necessary to review the history of Unix and Linux. Much has been written on this subject, and there is not enough room here for all the complex details (particularly the legal battle between USL and Berkeley Software Design Inc, although it may yet have an impact on the SCO/IBM lawsuit). The basics are as follows: