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SCO, CA at odds over Linux license

Computer Associates says SCO Group's "tactics" get under its skin.

Executives at Computer Associates International Inc. are livid over claims made by the SCO Group that CA has purchased SCO's Intellectual Property License for Linux.

CA's harsh reaction represents just the latest twist in a landmark week for the year-old feud between SCO, IBM, the Linux and open source communities, and commercial users of Linux.

CA was one of four companies identified last week by SCO chief financial officer Bob Bench as having purchased the license. The license costs $699 per server. Users who buy licenses will be protected from copyright infringement litigation from Lindon, Utah-based SCO. Last week, SCO filed its first lawsuits against enterprises using Linux; the company sued AutoZone Inc. and DaimlerChrysler, citing copyright infringement and contract violations, respectively.

CA disagrees with SCO's tactics, which are intended to intimidate and threaten customers. CA's license for Linux technology is part of a larger settlement with the Canopy Group.
Sam Greenblatt
Senior vice president and chief architect of the Linux Technology Group Computer Associates

EV1 Servers, a division of, a Houston-based ISP and Web host, was the first publicly identified company to purchase a Linux license. Other Linux licensees named by Bench include Questar Corp., a supplier of natural gas based in Salt Lake City, and Leggett & Platt Inc., a Missouri-based manufacturer. None of those companies has denied purchasing the license.

CA, however, denies the transaction. It does acknowledge that it purchased UnixWare licenses from SCO as part of a $40 million breach-of-contract settlement with the Canopy Group, a SCO investor.

"CA disagrees with SCO's tactics, which are intended to intimidate and threaten customers," said CA's Sam Greenblatt in a statement. "CA's license for Linux technology is part of a larger settlement with the Canopy Group. It has nothing to do with SCO's strategy of intimidation." Greenblatt, senior vice president and chief architect for CA's Linux technology group, is also an expert adviser for

Canopy and its subsidiary Center 7 sued CA, claiming it failed to live up to a 2000 contract to market Center 7's management software. The suit was settled in August and CA agreed to pay Canopy and Center 7 $40 million. Until this week, no further details were provided. Canopy is based in Lindon, Utah, and provides funding and support for technology startups. Canopy is the largest investor in the SCO Group and owns 40% of SCO's stock.

The discrepancies between CA's and SCO's statements are just a small part of the SCO news that's emerged during the past week.

Last week, the vendor publicly named its first Linux licensee and announced suits against AutoZone Inc. and DaimlerChrysler Corp.

Then, on Thursday, a 5-month-old rogue e-mail surfaced on luminary Eric Raymond's Open Source Initiative site. The e-mail is purported to be from Mike Anderer, a consultant with S2 Strategic Consulting and CEO of Entirenet LLC, a service provider. The message was sent to SCOsource's Chris Sontag and SCO chief financial officer Bob Bench. It suggests that Microsoft has funneled $86 million to SCO, including the $55 million in venture capital money that came from BayStar Capital last year.

"This is the smoking gun," Raymond wrote on his site. "We now know that Microsoft raised $86 million for SCO, but according to the SCO conference call [on March 3, to announce earnings], their cash reserves were $68.5 million. If not for Microsoft, SCO would be at least $15 million in debt today."

SCO's director of public relations, Blake Stowell, issued a statement confirming the existence of the e-mail.

"We believe the e-mail was simply a misunderstanding of the facts by an outside consultant who was working on a specific, unrelated project, [unrelated] to the BayStar transaction, and he was told at the time of his misunderstanding," Stowell said in a statement. "Contrary to the speculation of Eric Raymond, Microsoft did not orchestrate or participate in the BayStar transaction."

FEEDBACK: Now that SCO has filed suit against enterprises using Linux, is your company rethinking its Linux and open source projects?
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