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SCO & Linux: "OS Agnostic" Anderer Comes In From the Cold

SCO & Linux: "OS Agnostic" Anderer Comes In From the Cold

S2's CEO, strategic consultant Mike Andererer - author of the infamous memo of October 12, 2003 to Chris Sontag, Vice-President and GM of SCOsource, copied to SCO Group CFO Bob Bench - has emerged from the shadows to share with readers of NewsForge his thoughts on the whole episode.

Here is how Perens characterized the leaked memo:

The e-mail details how, surprise surprise, Microsoft has arranged virtually all of SCO's financing, hiding behind intermediaries like Baystar Capital. SCO spokesperson Blake Stowell has admitted that the email is real, but called its implications a "misunderstanding", while Microsoft softly called them "not accurate". We'd hear stronger denials if there wasn't some truth there. This was followed by a comment from the the Securities and Exchange Commission that, yeah, they're interested. Mr. Anderer, expect to see lots of subpoenas with your name on them.

Now Anderer himself comes forward and, describing himself as "OS agnostic - the more there are the better," says "my background is integration...I will file close to 20 patents this year for companies in many spaces, including homeland security, anti-terrorism, several grid computing and virtual machine patents."

"I have helped many companies and individuals who run companies in the GNU/Linux, BSD, and Unix world as well as those in the Microsoft world," Anderer writes. 

"I admire the good parts and despair the bad parts," he adds.

As he is under a non-disclosure agreement he can't say very much about the $50 million PIPE deal, he notes, but what he describes as a "licensing project" is not his main gig:

"I would state that this licensing project represented only a small fraction of my time over the last year and has completely gone away in recent months. This was a job for me, and licensing IP has been an increasingly significant portion of my work."

What he writes next will send shudders down many a spine:

"I think one real issue, that people are skirting, is who will be the ultimate guarantor of IP-related issues in a world that is governed by the GPL and GPL-like licenses. I could easily see IBM, HP, Sun, and many of the other large hardware players solving this problem tomorrow by settling the dispute with SCO and maybe even taking the entire code base and donating it into the public domain. I know this is what I originally thought would happen, at least the settlement part. I am not certain what people who paid tens of millions for licenses would say if what they paid for was now free, but that is a different issue.

In a world where there are $500 million dollar patent infringement lawsuits imposed on OS companies (although this is not completely settled yet), how would somebody like Red Hat compete when 6 months ago they only had $80-$90 million in cash? At that point they could not even afford to settle a fraction of a single judgment without devastating their shareholders. I suspect Microsoft may have 50 or more of these lawsuits in the queue. All of them are not asking for hundreds of millions, but most would be large enough to ruin anything but the largest companies. Red Hat did recently raise several hundred million which certainly gives them more staying power. Ultimately, I do not think any company except a few of the largest companies can offer any reasonable insulation to their customers from these types of judgments. You would need a market cap of more than a couple billion to just survive in the OS space."

"Nobody wants to be the ultimate guarantor for software that was free (or close to it)," acccording to Anderer. "I think the dispute with SCO would have been settled a long time ago if everybody knew this was the last one," he writes.

"The world of software is changing," he adds. 

"I think everybody sees that part on the product side, but the economic underpinnings are changing too. It used to be you included R&D and patent development costs into your license add your costs and a markup and you could make a living. We relied on cross-licensing, licensing, and innovation, and our ability to prevent other people from copying our work without permission. Now things are shifting, but I am not certain anybody has completely figured out this new model, and if you think it is just any one company that is concerned about this, you are wrong."

So in the World According to Anderer, whales like Microsoft - either directly or through proxies - will sue open source minnows until basically they either asphyxiate through lack of cash or are forced into some kind of cross licensing agreement with Microsoft and/or other companies acting in the same fashion.

Not if Pamela Jones and the Groklaw brigade can help it, mind you. In a scathing essay yesterday entitled "Anderer's 'Old Think' Tries to Justify A Dying Business Model," she declares why:

Because there are millions of people in this world who love GNU/Linux software and despise SCO's way of thinking and their business model and are willing to stand up and say no. We're willing to research and testify and produce evidence and leak memos and use our considerable talents, for no money and at considerable risk, I might add, to defeat this monstrously ugly attack. SCO can't buy this at any price. Not even Microsoft can buy it, with all their billions. It's not for sale.

"So far," Jones says, "we're winning by a mile." She adduces as evidence the fact that SCO is only still alive through the cash infusion that was the subject of Anderer's intervention. "Without MS propping them up," she writes, "where would [SCO] be today?"

The company BayStar gave its $50 million to, in other words, has as yet produced just $20,000 in Linux license revenue. But then, alas, the software patent wars are perhaps only just beginning.

The one hope is possibly the Federal Reserve's Alan Greenspan, who gave a speech last month regarding intellectual property rights which - while noting that protection of IP is a good thing - could be interpreted as mooting the idea that protection for IP should get weaker, not stronger, if the US economy is to keep growing.

 

 

 

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