The deal follows last's week's warning from SCO to 1,500 of the world's largest companies that they could face legal action for the unauthorised use of SCO Unix code in their Linux installations, and Microsoft offering special discounts to customers in an effort to maintain market share against the encroachment of the open-source operating system.
Chris Sontag, senior vice president and general manager of SCO's SCOsource, a division in charge of managing the company's Unix intellectual property, said the deal was not a reward from Microsoft for SCO's recent legal challenges to Linux.
"This is a standard, straight-up Unix licensing agreement like many we've done in the past" with other companies, he said.
This deal ensures Microsoft is in compliance with SCO's Unix intellectual property and will help Microsoft improve the Unix compatibility of its products, specifically Microsoft Windows Services for Unix, Sontag said.
Windows Services for Unix consists of different components that bridge the gap between Windows-based and Unix-based systems.
The deal appears to be a normal Microsoft attempt to make sure it is honouring properly SCO's intellectual property rights, IDC analyst Dan Kusnetzky said, adding that those advancing a conspiracy theory to explain the timing of the deal will have a hard time proving it.
However, Oracle chairman and chief executive officer Larry Ellison seemed to have no compunction about drawing a link between the agreement and SCO's litigation.
"Bill [Gates] is innovating. Microsoft has always had incredible innovation. You've had advanced bundling and what you see now is extreme litigation. They have a lot of experience with extreme litigation," he said.
Microsoft once licensed Unix source code from AT&T, Unix's creator, but that licence ran out after Microsoft abandoned the Unix-related project that had prompted the licensing, Sontag said.
The licensing agreement announced yesterday is one of two SCO signed in its second quarter, which ended in April, worth a combined total of more than $10m, Sontag said.