In India, Red Hat Shows SCO the Door and Darl Talks Turkey, in French

Thursday, October 23 2003 @ 12:35 AM EDT

Contributed by: PJ

Our own eagle-eyed belzecue submitted this article from The Financial Express, which reports that the largest insurance company in India is dumping SCO and going with Red Hat Linux:

"It is Linux time for the financial sector. Life Insurance Corporation of India (LIC), the largest insurance company of the country, is implementing Linux, the open source code operating system, replacing SCO Unix across its 2,048 branches. . . . Said Mr H Nanda, deputy secretary, software development centre, IT department, LIC, 'We chose Linux over some popular proprietary OS like Windows as we wanted to run all our existing in-house applications without spending much and at the same time did not want to be tied to license based OS. We will have the necessary freedom in future to develop various applications according to customers’ requirements.'

"LIC officials believe that by choosing Linux the company will save a huge amount of money in terms of licence fees, minimum use of third party applications and customisation cost of existing applications."

So it's bye bye, SCO. Hello, Red Hat:

"Red Hat will provide centralised support and training along with helping LIC’s software developers develop Linux based business applications."

The reason this has got to be hurting SCO is LIC India just happens to be listed on their web site as one of their prized "success stories". They had 6,000 servers running UnixWare, according to the success story. Let's see. The story indicates they were wanting to dump UNIX and considered Windows and Linux and finally decided on Linux. Presumably, then, had SCO not stopped selling their Linux products, they could have held on to this customer, by just swapping in Linux. Woops.

Well, perhaps they consider that a small loss, compared to their pie-in-the-sky dreams of unimaginable wealth from litigation, the new SCO business model. Marc sends us a report from France, with a Darl McBride interview in French, in which he tells us how much money he figures he will get from IBM if SCO wins. His calculation is $1 billion per week. The interview is here, in French. My rusty French, with support from an English translation by computer, and some help from Groklaw readers, informs us that he apparently said that SCO is fighting for the good of the computer industry. It's like the early US history, he says. First they just took the land and then things got organized later. I gather he plans to organize the software industry.

More like strip mine it.

He says IBM will owe them maybe 50 billion dollars a year, so delay, while a negative in one way, is not hurting them financially if they win the IBM case. Then there are all those servers using Linux they can license. Ka-ching. Ka-ching.

Judge Kimball might like to know what a week's delay is worth to SCO, since they are currently requesting several delays in the discovery process. Hopefully, the judge won't let them keep the meter running for all the delays SCO itself caused when calculating damages if, in some alternate universe, SCO is able to win anything. Here's the French on that answer, so you can translate for yourself:

"Ce délai nous fait du mal. D'un autre côté, étant donné que nous avons révoqué le contrat Unix d'IBM, ce dernier nous devra, selon nous, de 40 à 50 milliards de dollars par an si la justice nous donne raison. Parallèlement, cinq  millions de serveurs avec un noyau Linux 2.4 ou supérieur ont été déployés. Ce qui représente des milliards de dollars..."

He again says Linux companies can't realistically remove the code, because there's millions of lines, not thousands, but if they did remove it, that's fine with SCO, as is dropping down to any version of Linux below 2.4. Wait. Didn't they just tell the judge it's about methods and ideas, not ... I'm confused.

Maybe he's fund-raising among the French. Financially, SCO is doing fine, he says, and again he says the company has no long-term debt. And they plan on sales of licenses. Open source means freedom, not getting code free, he says. Ha ha.

I must have misunderstood the French and/or the computerlingo, because I can't match any definition of the word freedom with what he is planning for Linux. If accuracy matters to you, get a real translation, please. I'm just pointing you to the source.

Speaking of methods and ideas, there is a really interesting article by an attorney, Douglas L. Rogers, of Vorys, Sater, Seymour and Pease, on trade secrets and SCO's claims, and he touches on the methods and ideas angle. Maybe SCO should drop the trade secret claims. After reading the article, I don't think things are looking so good for them on that score.

In contrast to Darl's rah rah talk, there is this TechNewsWorld story, in which Neil Macehiter, research director at Ovum, says analysts were largely right in predicting that not many would buy a license from SCO:

"'Reality is dawning on SCO. They've yet to release details of exactly what is the subject of the case; no litigation has gone ahead as yet and, in the meantime, Hewlett Packard has said it will indemnify HP Linux users against any litigation with SCO,' he said. 'Apart from a handful of enterprises, businesses aren't playing ball with SCO, which is not seeing the success it anticipated with the legal case against IBM.'"

UPDATE: James Sauve has stepped up to the plate and offered us a line-by-line translation of the McBride interview. For copyright reasons, I will quote significant snips only:

"Linux contains portions of UNIX, of which SCO is the sole proprietor. We are aware that many are unhappy. But, this is the battle of the century : things are going to change when it comes to intellectual property of digital information, and we are mounting this campaign for everyone's benefit. It's somewhat like the birth of the United States of America : at first people just took the land, then things got organized."

"Q:How do you feel about the fact that the IBM case won't go to trial until 2005?

"The delay is hurting us. On the one hand, given that we have revoked IBM's Unix license, they owe us, according to our calculations, 40 to 50 billion dollars per year, if we win our case. On the other hand, 5 million Linux servers with the Linux 2.4 kernel or higher have been deployed. This represents billions of dollars...

"IBM chose to over posture themselves by putting forward the GPL, a matter we hadn't yet raised. We think that the use of our code is governed by copyright law, not the GPL. That will be the second round of the battle.

"Replacing the illegal code seems unimaginable, even if we would be the first to approve such a solution. But we're talking about millions of lines of code and not a few dozen. On top of that, the pieces that were taken are precisely what makes Linux a viable solution for enterprise deployment, like SMP and NUMA. We therefore invite enterprise users to properly license Linux by purchasing our run-time-only Linux license or downgrading to a version of Linux prior to 2.4, which will probably be enough for some companies."

The most interesting part of the new translation is that it makes clearer what they mean by copyright trumping the GPL. I understand now that they mean their code, which was distributed by them under the GPL, they now claim, wasn't really distributed that way, because they didn't mean to so distribute the code and copyright law protects them from having to GPL it forever. Now, since Linus and the FSF told them from the beginning that if they had inadvertently released any code it would be removed, why are they litigating the point instead of just accepting that generous offer?