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24 June 2009, 12:55

SCO vs. Linux: a new start with unXis?

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The SCO Group, threatened with liquidation and still locked in a legal tangle with companies, including IBM, over alleged use of code from UNIX System V in Linux and with Novell over the copyright to UNIX, has published a list of FAQs on the takeover with which it hopes to avert liquidation, on its website. According to the information provided, the software business would be sold to unXis, whilst the SCO Group would continue the, so far highly unprofitable business of litigating against Novell, IBM, Red Hat and others. Revenues from the sale will reportedly restore SCO Group to financial health and allow it to continue to pursue its various legal disputes.

The information on its new policy, which SCO hopes will achieve a last minute stay of execution from pending bankruptcy proceedings, also includes details of the new investors behind unXis. These include Gulf Cap Partners, backed by known investor Steven Norris, who has been interested in SCO since early 2008. It is joined by London-based investment company Merchant Bridge, which, according to its website, has up to now primarily been involved in Iraqi companies and banks. According to anti-globalisation observers at Corporate Watch, Merchant Bridge is among the top ten companies to profit from reconstruction work in Iraq.

In disclosing this information, SCO Group is clearly seeking to restore trust among businesses still deploying SCO products, such as SCO OpenServer, UnixWare and SCO Mobile Server. Almost all of SCO's technical support staff, software developers and Unix marketing staff will, according to the website, move to unXis. The new company will primarily work on virtualisation solutions, based on their many years of Unix experience. The separation from the SCO Group will, according to SCO, protect customers of the new company from any legal claims by third parties which might arise as a result of the ongoing legal dispute. The website goes on to note that, "with certain exceptions", unXis customers will be protected from being sued by the SCO Group for illegal use of SCO software or Linux.

Whether unXis will be able to make a genuine fresh start and be accepted by remaining SCO customers remains to be seen and is dependant on the findings of the bankruptcy court. It will resume proceedings, which were interrupted by the introduction of new investors, on the 16th and the 27th of July. IBM and Novell, already involved in the liquidation proceedings, will now be joined as creditors by Red Hat, which has lodged an objection and will attend the hearing. The case between Red Hat and SCO Group is currently suspended until the outcome of the dispute with Novell has been resolved, nonetheless Red Hat clearly does not intend to sit on its hands while there is the prospect of a potential rival such as unXis entering the market. The company has been offering its customers legal protection from litigation by SCO since 2004. Novell has also launched a similar program which is reported to have enjoyed substantial success, particular in conjunction with its cooperation agreement with Microsoft.

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