SCO signs up first major corporation for Linux licence

The SCO Group is claiming one of the largest companies in the US has become the first major business to take out a licence from...

The SCO Group is claiming one of the largest companies in the US has become the first major business to take out a licence from the Unix supplier for Linux.

SCO unveiled the licence last Tuesday, billing it as a way for Linux users to avoid lawsuits over what the company alleges are intellectual property violations in the Linux source code.

Few details on the Fortune 500 licensee or the terms of the deal were available. SCO declined to reveal the value of the deal, the number of licences involved, or which type of company signed the contract.

The licence was signed last week and the licensee was given a "slight discount" on SCO's $699 (£435) per processor server licensing fee, according to a SCO spokesman. "The company that we did this deal with, the number of servers and the dollar figure we consider to be significant," he said.

More than 300 companies called SCO to inquire about the new licence last week, SCO said.

Observers attacked SCO's announcement for its vagueness. "I think this is a public relations move attempting to bolster their case," said IDC analyst Dan Kusnetzky.

"A single person in a remote office in Kansas, could have licensed a single copy, and that could count as a Fortune 500 company."

It is still early for businesses to be licensing IP from SCO, Kusnetzky said, because the company has yet to reveal the exact nature of the alleged Linux violations and because nothing has yet been proven in court.

"It would seem more than a little premature for organisations to start spending money before it's clear what's actually happening," he added.

Open Source Initiative president Eric Raymond agreed. "This is just another attempt to pre-try their lawsuit in the media," he said. "Probably some company's legal department is going, 'What the hell, for a thousand bucks, we don't care.' "

The mystery company's deal is, however, worth more than a "couple of thousand bucks", and is more than public relations manoeuvring, SCO said.

"The significance is that a company that values Linux and also values the ability to run it without infringing on somebody's IP was willing to sign up for a licence that allows them to run it free and clear," a spokesman said.

The deal is not with Microsoft or Sun Microsystems, two prominent companies which have already signed other licensing agreements with SCO to cover their commercial products, he added.

SCO launched a lawsuit against IBM in March of this year claiming that IBM violated its Unix licence with SCO by inappropriately contributing to the Linux source code. SCO subsequently warned Linux users that they could be legally liable for using Linux without the appropriate intellectual property (IP) rights.

Last week IBM and Linux supplier Red Hat launched lawsuits against SCO, saying that the company's claims were without merit.

Robert McMillan writes for IDG News Service

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