"I have to admit that I was never much of a believer in open source. Maybe my business school coursework rendered me blind to the glorious vision of a 'gift culture' in which people contribute their work to a decentralized development project like Linux for honor instead of money. Or possibly I'm just too thick to understand how cutting off a multi-billion dollar revenue stream from software sales, without putting anything else in its place, could be good for the software business. Whatever the problem, I never quite believed in the fairy tale world they promised in which we'd all get an operating system that was better than Windows in every way, for absolutely no money -- not even when IBM started retailing Linux PC's and the juggernaut of fabulous free operating systems seemed unstoppable. But I confess that in all my skeptical musings, I did not imagine that Linux might be brought down by something even more prosaic than a lack of funds: a lawsuit." 

"Too thick" it is, then. You yourself said it.

How do you answer something "so bad it's not even wrong", in Wolfgang Pauli's famous phrase? She ought, instead, I thought, call her fervent FUD/editorial pretending to be an article: "Why I Do So, So Hope, Hope, Hope Open Source is Doomed".

I do, after all, have to consider the impact on my neurons of bombarding my brain daily by answering all the minute details of FUD, I decided. I'd save myself for the big stuff, which this wasn't.

But now I see it's being republished here and there. In my experience, that often turns out to mean that there is some force behind it giving it a PR lift. Also, it smacks of the "Open Source is hippie, dippie, icky, commie, unAmerican" stream of FUD, and that is both untrue and defamatory, so it needs to be answered wherever it appears, particularly because McBride has expressed such views, and it may turn out to be an orchestrated campaign of some importance in the SCO story. Open source, although boasting an international community, springs from values as American as apple pie, not that they are uniquely US property.

So, I started digging to find out who owns Tech Central Station, which published the article first, and here is what they tell us about themselves on their About Us page:

"Tech Central Station is supported by sponsoring corporations that share our faith in technology and its ability to improve modern life. Smart application of technology - combined with pro free market, science-based public policy - has the ability to help us solve many of the world's problems, and so we are grateful to AT&T;, ExxonMobil, General Motors Corporation, Intel, McDonalds, Microsoft, Nasdaq, National Semiconductor, PhRMA, and Qualcomm for their support. All of these corporations are industry leaders that have made great strides in using technology for our betterment, and we are proud to have them as sponsors. However, the opinions expressed on these pages are solely those of the writers and not necessarily of any corporation or other organization."

Not *necessarily*, eh? No agenda there.

Those rascals Microsoft show up again in the background, although "not necessarily". The MS FUD machine grinds on and on like a tank. So, next I decided to find out who Megan McArdle is that she wishes to be published by this corporate PR rag with content that might express Microsoft's views in exchange for its money, but "not necessarily". I gather from a Google search she writes under two names, the McArdle name and the name Jane Galt on janegalt.net, and that she is a recent graduate of the University of Chicago's Graduate School of Business. But let her tell you who she is and what she is about in her own writings here and here and here and here and here.

Just as I sighed and sat down to begin to write, I read a comment entitled "So ignorant it is hard to read" by Dick Gingras, of Software Solutions, on Groklaw, answering some of her points. I asked him to do an expanded article in answer to her main point. If I spread answering the FUD around among us all, I reasoned, I won't end up a drooling idiot, hopefully, by the time the trials finally begin.

He was kind enough to write it. So, here it is:

McBride talks about a number of issues, such as SGI, whether SCO intended to sue end users or commercial only, how and when they discovered the alleged "infringement", Caldera's contributions to Linux, and whether Debian is a safe version of GNU/Linux to use because of its noncommercial nature. He also tells them that SCO isn't interested in suing individual users or even small commercial users. Its beef, he says, is with the "Unix vendor community", UNIX-licensing companies switching to Linux and donating code to Linux so they don't have to pay any more royalties to SCO for Unix code, "the vendors that are getting an economic incentive to reducing the amount of royalties that they pay by virtue of taking our property and putting it into Linux, then turn around and saying it's a free system." He mentions that they were talking about 64-way systems, not home users.

He also says they found "hundreds of thousands of lines of code that are infringing against our contracts." Note the plural on contracts. He claims the increase in functionality in Linux is because of "vendors" that SCO has "confidentiality agreements" with. Again, note the plural.

A lot has changed since June, but it's clear that when this began, SCO had in mind a very small pool of targets, UNIX vendors being a small group of companies. What stands out is that I think you'll see how polite the Linux group is, how friendly the conversation was even when strong points were being made by each side, McBride praising them several times and at the end thanking them for their input and calling them "awesome". How different this reality is from the ugly portrait he has tried to paint in the media of users of GNU/Linux software allegedly "attacking" SCO. And when you hear or read it, ask yourself, how accurate were news reports of this event? But judge for yourself and draw your own conclusions.

"Q4: We touched on this a little bit earlier, but where does IBM see Linux evolving in the enterprise?

"A4: In the enterprise, we see Linux continuing to grow into spaces that have been traditionally occupied by UNIX, until the differences are indistinguishable. As I said earlier, we see Red Hat Enterprise Linux 3 as being a big step in that direction. As Linux continues down this path, we can rely on the open source community to ensure that Linux both continues to improve, and remains rooted in open standards. That's important from our point of view.

"Customers know that businesses can change very quickly -- because of the economy; changing security requirements, corporate consolidation, new business models or products (or competitors with new business models or products) -- and customers have to respond to that. Closed, inflexible 'one size fits all' business models and IT solutions are just not consistent with the business realities customers deal with in the real world.

"The openness of Linux and our commitment to open standards will ensure that Linux continues to evolve in a way that meets customer's needs, so they can flex and adapt to changing circumstances. We call that being an 'On Demand' business.

"Q5: Can you comment on the coexistence of open source and proprietary alternatives, given that IBM has solutions to offer in both worlds?

"A5: It's not about open source versus proprietary solutions. It's about open source and proprietary solutions, which are based on open standards and so are working together. This way, the customer has choice.

"As I've learned from customers in the past year, TCO means 'take cost out.' We have a global economy with slow growth, and in some geographies, no growth. So value is the killer app right now. Open source solutions can help customers get there. Increasingly, it's helping governments get there. So it's not going to be one or the other; it's going to be both.

"We have a cohabitation strategy, not an exclusionary strategy built on proprietary software. There's no way you can remove open source from the picture at this point, and those who think you can are just fooling themselves. It's not going to be a proprietary-only world ever again."

SCO filed a Motion to Dismiss the action in its entirety, as you know, and Red Hat filed its answering brief. But since we last reported on this case, Red Hat initiated discovery. They asked SCO for documents and for answers to some pointed questions. IBM is forcing SCO into a corner in Utah, and Red Hat is forcefully and aggressively trying to do the same in Delaware. You'll see, I think, that we haven't been wasting our time telling the world the details of this story. The big picture is that Red Hat is telling SCO to prove their allegations with specificity. They also want all their source code, and I'm sure you can figure out what they want to do with it, when I tell you that they asked for the complete Linux Kernel Personality source code, among the other products for which they have requested source code.

They also want to hear some details about the relationship between Canopy and SCO, including any stock or intellectual property transfers. They want SCO to "identify by title, version, module(s) and line(s)" what they think is misappropriated in any way or in violation of any of its rights. They ask for the details of Microsoft and Sun's licensing arrangement with SCO. They want to know who those 1500 companies were that got the letter, and what happened next. They want to know exactly what SCO has filed a copyright on. They want all the details of SCOsource, including all the folks who have seen the code SCO has been showing under the NDA and what they saw, and any other contact with any Linux users about supposed liability. They want to know how they compared the UNIX and Linux code to determine infringement. They want to know if they've done any comparisons of the two and what the results were. They want to know all the stock or industry analysts SCO has met with or talked to and what was said. In short, it's like the kind of fantasy a guy might have about a bully getting his at last, because they asked them everything we wanted somebody to finally ask SCO and make them answer.

SCO responded to Red Hat's discovery requests by filing a new motion, and it has told the judge, in a Motion to Stay Discovery Pending Resolution of Motion to Dismiss, it would like a delay until after the first motion, the Motion to Dismiss, is ruled on. They surely don't seem in any hurry to get this matter resolved. They argue that because they are simultaneously providing discovery to IBM (of course IBM says they aren't seeing anything, as I recall), they can't possibly do both, and anyway, if they win their motion, it'd be moot. In short, they would very much like not to have to do this, presumably so that if they win the Motion to Dismiss they can continue to refuse to give any particulars about their case. If the judge doesn't grant their Motion to Dismiss, they'd like the judge to give them 30 days to provide all the discovery items.

Meanwhile financial types are beginning to notice a few things, like Eric Hellweg, CNN/Money Contributing Columnist, writing about how many shares insiders are sellling:

"Senior vice president Reginald Broughton has led the pack, offloading 170,000 shares since June for an estimated gain of $1.13 million. Broughton now owns only 95,000 shares in the company.

"When I reached McBride on Tuesday at his office in Utah, he defended the executive sales as a simple case of executives finally being able to sell shares that were underwater until the recent run-up. And he argued that the amount sold is 'very small' compared with the total number of insider shares owned.

"Others, however, aren't so sure. 'I'm not going to cast moral judgment,' says George Weiss, an analyst and vice president at Gartner Research. 'But there is a sense one gets that the whole lawsuit is a means to generate revenue and quick acceleration in stock price in hopes that a buyout would occur from a deep-pocketed company such as IBM. [The selling] doesn't surprise me.'"

The SGI code comparison is having an effect on normal financial thinkers, as you can see in the article's analysis, where the author noted that 200 lines of code doesn't equal more than a million. Hey, he's a financial guy. Those guys can add:

"SCO investors need to realize that, in many ways, they're betting on the outcomes of these lawsuits. SCO has engendered so much ill will in the open-source community, it's hard to imagine the company building a sustainable business around its products if it loses these cases. . . .

"If more companies opt to take the SGI route and conduct a code-by-code comparison, investors will get a ballpark sense of the strength of SCO's claims.

"But unless a company such as IBM decides to purchase SCO -- something that could happen if IBM's internal review shows a significant amount of infringing code -- these individual vendor code comparisons will just serve as canaries for investors trying to gauge the safety of entering the deep, dark SCO coal mine."

I think we may assume that if IBM's internal review had shown that, they'd have folded by now. I have no inside info, I hasten to add. Just a brain.

Don't laugh. Not everyone gives evidence of having one. Here's an interview with SCO's Chris Sontag, in which he repeats the misappropriation charges, without being specific, naturally, right after IBM has filed with the court a demand for specifics. Just clueless about the law:

"Why have you chosen to go after Linux customers in addition to IBM?

"Sontag: SCO has really been left with no other choice but to request that commercial customers of Linux compensate SCO for our intellectual property with a license fee. The hardware vendors don't take responsibility for infringements in Linux because, technically, they aren't distributors. The distributors pass the hot potato to business end users by shielding themselves with the GPL by saying, 'This product has no warranty and no indemnification.' So now if Linux has problems, including misappropriated intellectual property going into Linux, the end users are left holding this hot potato.

"Q:Is the open source development process flawed in your opinion, with regard to intellectual property?

"Sontag: Yes, in that there is no rock-solid mechanism in place for checking in code and assuring users that this code is clean and doesn't infringe on others' intellectual property. Until that mechanism is in place, there will more than likely be problems with others' IP going into Linux. . . .

"Q: Any regrets about how this has played out? If so, what are they?

"Sontag: It's too bad that the Linux development process couldn't prevent misappropriations of Unix software code."

I'd say that hot potato is in SCO's lap now, not in the hands of end users.

We're reading it together at the same time, because I just now got it. What I see so far is IBM is asking SCO to specify precisely what trade secrets it accuses IBM of having misappropriated. They are asking them to tell them exactly what source code is involved. They point out it's been six months since the lawsuit was filed, and they still don't know with any particularity what the accusation is about:

"In a case relating to software, such as this case, a defendant is entitled to know the files and lines of code it is alleged to have misappropriated. A plaintiff may not persist in vague assertions about the substance of the claimed secret and leave the defendant to guess at the basis of the lawsuit."

Hear, hear! I've read some of the Exhibits, and SCO's position appears to be in part that IBM already has the code and that they want confidentiality preserved. That again, to which IBM says, fine to the confidentiality, but it continues to press for the particular code. IBM points out in the Memorandum that in its marketing, such as the SCOForum, SCO showed specific lines of code, but in discovery, it hasn't mentioned one line of code but instead mentioned "non-literal transfers" of "methods". So, it's "put up or shut up" time at last, it seems. IBM has requested oral argument. That means both sides have to show up and actually present their arguments to the judge, not just on paper. I'd so love to be there for that.

Thank you, Frank. Thank you, too, Mrs. Sorenson, for putting up with Groklaw. We have more documents too that Frank got for us, the Exhibits, but it'll take a while to get it all up for you. Meanwhile, enjoy what we already have available.

On the Red Hat front, if anyone in DE is passing by the courthouse, here is what is new:

9/30/03 14 Letter to Clerk from A. Poff re DI # 13; problems with formatting and minor typographical errors; enclosing a corrected version of the brief (ft) [Entry date 10/01/03]

10/2/03 15 MOTION by SCO Group Inc. to Stay Discovery Pending Resolution of Motion to Dismiss Answer Brief due 10/16/03 re: [15-1] motion (ft)

10/3/03 16 STIPULATION to extend time for deft. to file reply brief in support of Motion to Dismiss; with proposed order (ft)

10/6/03 -- So Ordered granting [16-1] stipulation reset Reply Brief Deadline to 10/10/03 re: [8-1] motion to Dismiss ( signed by Judge Sue L. Robinson ) Notice to all parties. (rd)

UPDATE: Here are the exhibits we promised:

Exhibit A - IBM letter April 2, 2003
Exhibit B - IBM letter May 5, 2003
Exhibit C - Maureen O'Gara LinuxWorld story

Exhibit D - Defendant IBM's First Set of Interrogatories and First Request for the Production of Documents

Exhibit E - Plaintiff's Responses to Defendant's First Set of Interrogatories and First Request for the Production of Documents

Exhibit G - IBM letter August 27, 2003
Exhibit H - SCO letter September 8, 2003
Exhibit I - IBM letter August 29, 2003

Exhibit J - Plaintiff's First Request for Production of Documents and First Set of Interrogatories

Yes, we seem to be missing Exhibit F, but we're hunting for it.

Try this for Exhibit F - SCOSource Slide Show.

We have arranged to get the DE documents, so no more volunteers are needed.

"It was mostly a room full of SCO resellers. And they were not too big on having a love in. Nothing hostile, however not one positive comment for the morning's session. During the 'we be so profitable' section of the spiel, one reseller in the crowd asked 'where does the money come from?' The response was largely a pointer to the SCO source initiative. The response? 'What you are profitable in will not make me profitable.' Wow. That was good. One raised the points that this quibble is hurting his business. SCO's stance is that they'd love to settle this tomorrow (har har). Stance not bought by aforementioned reseller - the paraphrased retort was 'litigation will resolve nothing that I am interested in. SCO needs to adapt to the times, or it will perish'. Wow wow. People seem to get this. I like it.

"The survey was widely seen as a blanket statement about the cost of ownership of the platforms, rather than a more qualified statement about their relative costs for running certain types of applications, according to Forrester analyst John Rymer, the author of the report.

"'There was a huge outcry about the Microsoft study,' said Rymer, who blamed the way the media covered the report for much of the criticism. "Microsoft cheaper than Linux:" That was the basic headline. There were a dozen variations on that. Obviously, if you read the report, the conclusions in the report are much more qualified than that,' he said.

"In addition to Microsoft having funded the study, critics also took exception to the small sample size (12 companies) that Forrester's results were based on, as well as the study's methodology."

Ah, the sweet smell of FUD going splat. It seems Microsoft was using the study to sell reporters, and a lot of the media just chewed and swallowed. But when their headlines were read by more careful and knowledgeable folks -- that would be us -- the outcry followed. Here's what Microsoft was doing, and as you read it, file it under "This is how FUD is done" so we can react appropriately every time FUD lifts its ugly head from the mud:

"In Microsoft's case, the study was offered as the latest data point in the company's 'fact-based' campaign against Linux, an initiative promoted by Microsoft's general manager of platform strategy, Martin Taylor.

"'Martin Taylor went out and visited with a bunch of reporters, and he was referring to the study and using it to advance his case that Linux doesn't have a lot of advantages,' said Rymer. 'George (Colony) was uncomfortable with this'."

As are we all, friend, as are we all.

FUD only works if you let it. That "outcry" is us at our best. And as you see, FUD can never stand the light of day, so all we have to do is shine the light in the nicest way possible, and FUD wilts and dies. Now, as for the media, let's just keep educating them in a pleasant way, and the analysts too. Microsoft's entire business is built on the proposition that they know more than the rest of us do about tech, and with FUD, they try to capitalize on a lack of accurate information. Maybe that proposition worked when they started the business, because there weren't a lot of folks who understood computers, which gave rise to Clippy and other obnoxious MS hand-holding. But a lot of us are technically adept now. The world has changed.

FUD is MS holding the media's hands and handing them a pre-written story, which any reporter is glad to have, because they are always struggling to meet deadlines and sometimese having an uphill time of it understanding the issues, being usually generalists rather than specialists. PR is based on recognizing that need and filling it.

But reporters can learn, and one thing is for sure: most reporters will tell the truth if they know it and if they are sure they are on solid ground. That's what they want to do; it's a job description, after all.

Forrester is to be commended for what they have done. The beauty part is that with the internet, FUD has become just another name for shooting yourself in the foot, because the light always shines here, thanks to those of us who don't just read the news and accept it as true when we happen to know better and are willing to devote a little time to patiently and politely correcting the record.

Groklaw is, therefore, preparing a list of questions for reporters to ask SCO. We are preparing it as a public service, because we recognize that there is a need for some help with this very complex story. We also recognize that FUDsters are at work, that Microsoft is actively working on a campaign against Linux and pushing their view on reporters as if it were "fact-based", and we intend to present clarifying information on Groklaw to counter the FUD.

The list of proposed questions for journalists will be posted here within the week, and to you reporters who read Groklaw, welcome, and we hope our list proves useful to you. If you need anything else, just ask and we'll try to provide whatever it is you need. If MS or SCO bends your ear, you might want to give us an opportunity to fill you in with The Rest of the Story.

"The SCO Group has insisted that changes made by Silicon Graphics (SGI) to some of its Unix code will not be enough to prevent termination of SGI's Unix licence.