Hosting provider will pay SCO for Unix IP licence

A Houston-based server hosting company has signed an intellectual property licensing agreement with The SCO Group to shelter the...

A Houston-based server hosting company has signed an intellectual property licensing agreement with The SCO Group to shelter the hosting provider's customers from any future Unix or Linux IP claims.

Under the deal, is paying to license SCO's Unix binary code for all of the approximately 18,000 servers that run Red Hat Linux.

Since last March, when SCO filed a lawsuit now worth $5bn against IBM, SCO has maintained that all corporate users of Linux owe it licensing fees because some of its proprietary System V Unix code has made its way into Linux illegally. 

The agreement, rumoured to be a seven-figure deal, will cover a site licence for's use of its Linux servers. 

SCO has been selling IP licensing agreements since September as a way of allowing Linux users to protect themselves from legal action, but most companies have adopted a wait-and-see approach since the IBM case is not scheduled to go to court until April 2005. 

"With SCO having these IP issues with Linux, we wanted to be sure our customers would not be affected," said Isabel Wang, a spokeswoman for, a division of Everyones Internet. 

The company leases servers to customers, many of which use them to host corporate websites, run online communities, operate gaming networks or support corporate intranets. The servers are hosted in the company's data centre in Houston.

"We feel it is our responsibility as their hosting provider to give them a place that they can grow without interruption and without worries," said Wang. 

She acknowledged that the company is paying for the licences even though SCO has not yet proved its case in any court. 

"Our goal is to pre-empt ourselves and our customer base from any future liability," Wang said. "We just made a calculated decision that this would be a good thing."

If SCO should lose its case, customers will be safe anyway, Wang said. "But if they win, we don't want to be one of the ones tangled up in this."  

EV1Servers.Net, established in January 2000, also runs about 2,000 dedicated servers using Windows. 

Robert Marsh, chief executive officer of Everyones Internet, said the deal with SCO eliminates uncertainty from the company's clients' hosting infrastructure.

"Our current and future users now enjoy the peace of mind of knowing that their websites and data are hosted on a SCO IP-compliant platform," he added. 

Gartner analyst George Weiss said some corporate Linux users will sign similar licensing deals with SCO. "There's too much at stake in a worst-case scenario." But for other users, the decision will remain a matter of assessing their risk and looking at the case as it unfolds. 

Weiss added that is taking a monetary risk by paying for a licence before the case is decided. "I'm not sure why or how they came to that conclusion now."

Todd R Weiss writes for Computerworld

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