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Fri, May 16, 2003 - Page 12 News List

Caldera suit threatening IBM's Linux sponsorship

BLOOMBERG , LINDON, UTAH

International Business Machines Corp's (IBM) campaign to get customers to embrace the free Linux operating system has thus far withstood the best efforts of Microsoft Corp to thwart users' enthusiasm.

Its luck may have run out. Caldera International Inc, which owns the rival Unix operating system, has sued IBM and is advising other Linux enthusiasts being courted by IBM, Oracle Corp and dozens of other companies that they may be next. Microsoft has for years said that the use of Linux carries the threat of liability because of "cloned" code.

Caldera, which licenses its Unix operating system software to Sun Microsystems Inc and thousands of other companies, has notified 1,500 companies that they may be liable if they're using Linux on computer servers running their Web sites or corporate networks, Caldera Chief Executive Darl McBride said in an interview.

"We believe that Linux infringes on our Unix intellectual property and other rights," Caldera said in the letter, whose recipients included General Motors Corp and Boeing Co. "We intend to aggressively protect and enforce these rights."

IBM, Oracle Corp and dozens of other companies sell programs or services that run on Linux, which analysts have said lowers the cost of server computers used to run Web sites and corporate networks.

Microsoft has identified it as a chief threat to its Windows operating system for servers because of the cost, power and flexibility.

"Just because it's free on the Net doesn't mean it's available for use and that's a very shocking message to the open source community," said Eric Goldman, assistant professor at Marquette Law School.

"Individual companies may feel the heat, especially if it's a big Linux shop that's been waving the Linux banner," he said.

Raleigh, North Carolina-based Red Hat, the world's biggest distributor of Linux, has yet to hear such concerns, spokeswoman Leigh Day said.

"It's not something our customers are talking to us about," she said, declining to comment further.

After focusing on retail sales to consumers until 2002, Red Hat increasingly is counting on sales of its software to big clients. In its most recent quarter, Red Hat's revenue from commercial clients more than doubled to US$10.8 million from the same period a year earlier. Sales to consumers dropped 24 percent to US$2.84 million.

IBM spent US$1 billion on development, marketing and advertising of Linux in 2001, and has continued to invest, spokeswoman Trink Guarino has said. IBM, Dell and others shipped 425,038 servers running Linux, according to researcher Gartner, up 48 percent from 2001.

Oracle, the world's largest database software maker, in 2001 teamed with Red Hat to improve Linux so it would run programs faster.

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