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jjohn (22)

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Perl hack/Linux buff/OSS junkie.

Journal of jjohn (22)

Thursday August 21, 2003
04:48 PM

Red Hat ought to buy SCO

[ #14260 ]

Ian Lance Taylor suggests that perhaps Red Hat ought to buy SCO. Others, including me, have suggested IBM ought to buy SCO. Both of these solutions are designed to shut up the yapping dog that is SCO's claim of IP infringement against Linux. It does suck to reward bad behavior, but I think there is a business case to be made for Red Hat acquiring SCO.

SCO UNIX is used in several niche, but lucrative markets, including accounting applications for construction companies. Red Hat would do well to bolster its holdings with some of these plum accounts. In fact, porting these boring business applications to Linux may produce new customers for these aging applications. I suspect there is a good opportunity to pick low-hanging fruit in there for RedHat.

SCO also claims to have a single-source authentication solution that integrates into MS Active Directory (or what we *nix geeks would call "LDAP"). Linux needs a this kind of management tool, as any SA will testify to. As the number of machines on a network grows, it becomes impossible to manage user accounts for each host. Centralizing this task and making it work in a hetrogenous environment would be a Big Win for Red Hat. While NIS/NIS+ and even primative LDAP authentication support now exists in Linux, it doesn't seem to enough for many admins (no doubt some SA's here will comment on the paucity of delights in using NIS+). SCO's authentication may be part of a comprehensive authentication solution for Linux.

Of course the biggest win for Red Hat is that it gets to own the UNIX name. While that may not have a dollar value, it sure would differentiate the company from other Linux vendors. Recall the boost in credibility that Caldera briefly had when it merged with SCO? Red Hat would certainly handle the UNIX mantle more adroitly and, I suspect, more profitably.

SCO's inflated market value is 150 million inflated dollars, which is at an inflated level of the company's true (less-inflated) worth. I don't know exactly how much SCO would be worth to Red Hat, but even at $75 million, SCO would add some tangible value to the company. Red Hat is reportedly worth about $300 million.

The case for IBM buying SCO is not easy to make. SCO has nothing the IBM needs. It's in no markets big enough for IBM to care about. And, SCO has spit in IBM's eye. So, I think IBM would rather see the executive board of SCO in front of the SEC trying to explain their bad-faith behavior rather than make this whole "Linux License Program" of SCO go away.

SCO has played a very dangerous gambit. As more news surfaces about SCO's erroneous or felonious claims of copyright infringment by Linux, there is a very real possibility that some SCO execs will do jail time. The SEC doesn't take kindly to companies inflating their stock prices with protection rackets built on vapor. Expect SCO to continue its jihad to the bitter end. I assure you, it won't be pretty.

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  • I thought the OpenGroup owned the UNIX name. SCO just owns the SVR4 code. Or something.

    J. David works really hard, has a passion for writing good software, and knows many of the world's best Perl programmers
  • The Open Group owns the UNIX trademark, the "name".

    SCO owns the UNIX at least some of the intellectual property (the source code, the patents) originally coming from AT&T, and now it recently also got the copyright for the System V source code itself (whatever that means in the context of source code).

    Which exact parts of the IP it owns (and which parts Novell still owns), and what does exactly owning the IP of software mean, is the open question.