SCO says to act against IBM if no
deal by Friday
Reuters, 06.11.03, 7:01 PM ET
By Reed
Stevenson
SEATTLE (Reuters) - SCO Group
Inc., which claims International Business Machines Corp. illegally used parts of
its Unix software in other programs, said Wednesday that it could revoke its
license to the world's largest computer company unless they settled this
week.
Lindon, Utah-based SCO is suing IBM
for more than $1 billion and warned 1,500 other companies last month that they
may be violating SCO's intellectual property rights because parts of its Unix
software code are being used in Linux.
Unix
is a widely-used operating system for networked computers that was first
developed by AT&T Corp. Various versions of Unix are now used to run
corporate and government computer systems for serving up Web pages, accounting,
manufacturing and storing information.
Linux, unlike proprietary versions of Unix and Microsoft
Corp.'s Windows programs, is a version of Unix that can be copied and modified
freely.
IBM, which had licensed Unix code
in order to develop its own Unix-based system called AIX, is also one of the
biggest champions of Linux, which it supports in order to sell its hardware and
services to corporations. SCO claims that IBM transferred some AIX code over to
Linux.
"If we don't have a resolution by
midnight on Friday the 13th, the AIX world will be a different place," SCO
President and Chief Executive Darl McBride told Reuters.
"We've basically mapped out what we will do. People will be
running AIX without a valid license," said McBride, who offered no specific
details on what action SCO would take.
IBM
declined to say whether it was in negotiations with SCO to meet Friday's
deadline.
"IBM believes that our contract
with regard to AIX is irrevocable and perpetual and there is nothing further to
discuss," said IBM spokeswoman Trink Guarino.
SLEEPING GIANT
Some
industry experts see SCO's campaign as an attempt to gain a windfall settlement,
most likely by selling itself to IBM or another industry
heavyweight.
SCO, formerly known as Caldera
Systems Inc., owns the intellectual property rights to Unix but also makes
versions of Unix that run on Intel Corp.'s microprocessors, which also serves as
the main platform for Windows and Linux.
Intel-based computers are generally considered cheaper than
other high-end systems offered by IBM or Sun Microsystems Inc. and have been
gaining ground in corporations.
SCO posted
a profit of $3.8 million during the first half of its current fiscal year,
compared to a loss of $17.6 million a year earlier, due in part to increased
income from its Unix assets.
McBride said
SCO's Unix intellectual property had been previously under-utilized by the
company: "We've spent the last couple of quarters waking the sleeping
giant."
So far, that initiative has reaped
rewards for McBride, SCO's 340 employees and shareholders. SCO's shares have
skyrocketed in the past year to $8.65, its latest close on Wednesday from a
52-week low of 60 cents.
SCO also won a
license from Microsoft, which agreed to pay SCO to ensure that it would not
violate intellectual property rights when developing software that works with
Unix. But Microsoft's move was widely seen as an attempt to lend weight to SCO's
attack on Linux, which Microsoft views as a threat to its Windows
franchise.
McBride also said it had
resolved most of its differences with another software maker, Novell Inc. which
had previously owned the rights to Unix.
Novell acquired the rights to Unix in 1992 and later sold those
rights to SCO in 1995. SCO developed the first commercial version of Unix for
Intel chips and was IBM's partner in developing AIX.
But with the growth of Microsoft's Windows software and the
advent of Linux as a popular alternative to Unix, SCO struggled. Microsoft even
owned a portion of the company, but sold it in 2000.
Copyright 2003, Reuters News Service