It might look like the battle of David and Goliath, but in the case of the SCO Group vs. IBM, not too many people are rooting for David. The SCO Group, which has filed a $3 billion suit against Big Blue, alleges that Unix code – which it claims rights to – was wrongly used in some of IBM’s Linux code. IBM has filed a countersuit, saying that SCO is simply trying to make money from laying claim to code that is freely available under the General Public License. Linux distributor Red Hat has also joined the fray, asking that SCO be stopped from making claims of intellectual property misuse in Linux code. Most Linux developers have weighed in on IBM’s side, expressing annoyance at what they perceive as SCO’s attempt to undermine the very nature of open source software development.


The case is making headlines, but the larger issue in question is whether Linux – which has become the poster child for open source software development — can truly remain open while simultaneously gaining acceptance in the corporate marketplace.


An Alternative Operating System

Just a few years ago, Linux was little more than an operating system favored by hard-core computer users in the know. Developed in the 1990s by Linus Torvalds in Finland, it is based on Unix, an operating system (OS) produced by Bell Labs in the late 1960s. Unlike Microsoft’s Windows, Linux has a source code that is freely available on the Internet. Developers the world over can download a version and tweak it to fix bugs, resulting in an OS that is known for its stability – an attribute that is especially welcome in the corporate server space. In fact, Linux got a big publicity boost when IBM announced, some years ago, that it would invest heavily in the OS and support it as a key element of the company’s server strategy.


While developers were happy to manipulate the code simply for recognition in the open-source community, it wasn’t long before people began to see the potential for using Linux to make money. Companies, such as Red Hat, SuSE, and Caldera (now part of SCO), were formed with the goal of bringing Linux out into the world at large. The biggest challenges were marketing and difficulty of use. Most people didn’t use Linux because they didn’t know about it, but even those who did balked at switching because they perceived the available flavors of it to be less user-friendly than other systems.


The issue then became one of revenue generation. If Linux were truly open source, how could businesses make money from it? Distribution of user-friendly packages and support seemed to be the answer, but so far no company has been able to really rake in the bucks simply by doing that.


Doors Wide Shut?

Wharton chief information officer Gerry McCartney believes that the SCO lawsuit is a sign that Linux is becoming a viable commercial choice – and with that might come more business-oriented considerations. “SCO thinks that it has the exclusive rights to distribute Unix platforms, and with IBM getting behind Linux, it poses business problems for them. It’s an expression of Linux’s gaining credibility,” he says. “Vendors will want to make money from selling product, and a key part of that is the OS. If the OS is free, they can only make money from the hardware (like IBM) or from applications (like Oracle, for example). It’s not clear to me that other vendors won’t add proprietary features to Linux which they can sell as value-added services.”

Gerald Faulhaber, a Wharton professor of public policy, agrees. “In this case, the fact is, Unix itself was sort of in the public domain for a long time. Then, of course, AT&T claimed the rights, then they sold it off, it moved around, and now it seems to be with SCO.”


Faulhaber believes that both open source and intellectual property-based operating systems will coexist. “One won’t drive the other out. The most successful web server is Apache, which is open source. Nevertheless, Microsoft still competes in that market. It doesn’t make a great product, but it still competes. So I don’t think Linux will drive Windows out of the picture or vice versa.”
“One problem with open source is that it tends to fork,” Faulhaber adds. “So you have one type of Linux supported by one player, and then someone else comes up with something a little different. If it’s open source, it tends to be beat on, and the weak spots get fixed. But then that leads to other questions — who takes responsibility, who’s in charge, who pays the bills?” That is where issues of ownership of intellectual property come in, says Faulhaber. “You need some accountability, someone saying ‘I’m responsible.’ That’s not there right now.”

Faulhaber compares the open source movement to academia. “I’m surprised academics even question Linux,” he says. “We professors do research, and we essentially give it away. Publishing it in a big journal gives us brownie points. It’s pretty much the same in open source – if you develop a significant extension of Linux, you’re the dude, so to speak. Just as in academia, we shouldn’t be surprised that open source works without direct methods of remunerating people.”

What Linux hasn’t produced yet, says Faulhaber, is a well-marketed consumer friendly interface. “Think about instant messenger programs. You have Yahoo! Messenger, AOL Instant Messenger, MSN Messenger. Yes, you can get a software program that lets you use all three – a multiheaded client. It’s called Trillian. It’s been around for a few years, and it gets some press. But hardly anyone really uses it. Linux is similar in that way.”

Sitting at the Table
Gordon Haff, a senior analyst at Illuminata, a New Hampshire-based research and advisory firm, also sees Linux becoming a little more business-savvy to maintain market share. “Although I think it would be hard to keep up the kind of growth it has enjoyed, Linux in general will continue to gain server share — not to the exclusion of Unix or Windows, but some – over the coming years,” he says.

“I don’t believe, as some do, that Linux will replace Unix anytime soon, or that people will realize Microsoft is somehow evil and stop using Windows,” adds Haff. “From the corporate desktop perspective, I see some modest gains for particular types of applications. It’s a little more difficult to see the path to really widespread desktop Linux use.  The same applies from a consumer point of view. There’s a pretty small, hobby/enthusiast market for home PCs running Linux. But remember that Linux can show up as an embedded operating system, say, in TiVo-like products, so it can gain share in those areas.”

Haff believes that a consortium of some kind may be necessary to regulate various licenses and intellectual property issues surrounding open source. “I would imagine a need to have at least a loose organization that could deal with licensing issues that affect Linux as a whole. To some of the more doctrinaire open source people, any of this talk about, say, cross-licensing technology in Linux is anathema and against the General Public License. But as time goes on, I think those people will play a secondary role. So, while still remaining open source, there may have to be some mechanism put in place that recognizes intellectual property in Linux — even if it’s purely cross-licensing agreements.”

For Linux to remain mainstream, says Haff, some concessions will have to be made: “While there may be a royalty-free core of Linux going forward, you may see distributions built around Linux kernels that incorporate license-based add-ons. Enterprises are interested in something that works, as opposed to some doctrinaire, pure open-source system. This is not to say that Linux will be closed down entirely or made somehow proprietary, but it seems there is a need for it to participate in discussion or resolve issues around patents and licensing.”