Martin Pool's blog

Problems with DiDio analysis

Laura DiDio has run up her colours in her latest article.

Reasonable people can differ on some aspects of the issue, and in particular on just how much caution is justified, or whether there is any likelihood that there's any common code. It's arguable. We'll know in a few years: by which time it's likely to be moot, as Linux will have rolled on regardless.

DiDio's original position was extreme caution: companies should go slow on Linux because there's a risk of SCO charging licence fees. OK: I disagree, but it's a valid opinion.

Now she goes a lot further than that. pro_coder is quoted on LWN with a nice reply to Yankee Group:

Provable, egregious factual errors first:

1. The very first line "The SCO Group lawsuit against IBM for copyright infringement"

There is no copyright violation case, it's a contractual dispute. This has been pointed out by numerous commentators on many occasions.

2. "SCO claims it comes directly from UNIX System V: the copyrights it owns"

SCO has made no such claims. SCO concedes that IBM possesses the copyrights for most of the code in question, including RCU, JFS, SMP. And SGI possesses copyrights on NUMA.

SCO has also not accused IBM of contributing the infamous "80 lines".

3. "The Yankee Group strongly urges IBM Linux licensees to contact SCO."

There are no "IBM Linux licensees". IBM does not "license" Linux. There is no "IBM Linux" to be licensed. Sam Palmisano was very insistent on this, that IBM would not create an "IBM Linux" to compete with RedHat or SuSe.

IBM installs RedHat or SuSe on some servers that it sells while IBM Services may support a Linux installation, but again, there is no IBM Linux. There are no "IBM Linux licensees".

IBM does not "license" Linux.

Next, statements made in the analysis with no evidence offered, but with much publicly-available data that points to the exact opposite conclusion."

1. "There are strong indications that the industry at large takes SCO's claims seriously."

Ms Didio does not point to a single public statement by any corporation (other than those who stand to gain directly by SCO's actions). And she ignores a mountain of evidence that shows that this assertion is plainly wrong. Corporate adoption of Linux since the whole SCO business started has been astounding, with new announcements of contract wins occuring almost daily.

2. "Wall Street sees it that way. SCO's stock soared nearly 15 percent on the news. It jumped $2.82 and was trading at $14.77"

The gold-standard test for "wall street confidence" is that options become available from brokerages. The fact that this has not happened is a good indication that "wall street" has zero confidence in SCO.

And there are many reasons to back up this reading that "Wall street" has zero confidence in SCO.
- Volumes are extremely small.
- Institional ownership in SCO has been going down.
- There is a massive amount of dumping, of run-for-the-exits from SCO insiders. Many times in the last month SCO insider selling accounted for 10% of total volume.

And a highly imprudent recommendation. "Yankee Group strongly urges IBM Linux licensees to contact SCO. It doesn't cost anything to have the conversation and determine the cost of their binary Linux license offering."

Is it Yankee Group's position that giving one's name and corporate IT information freely to a possible offensive litigant is a good thing to do?

So if SCO has absolutely no knowledge of some company, is Yankee group really recommending to such companies that they phone SCO and tell SCO "we're using Linux, take down our name and address and our patterns of Linux usage so you can pursue us in the future with more threats".

Is that really Yankee Group's position? Is that really a prudent action?

(This made me smile.)

Interesting that Ms Didio feels the need to include this statement - "Linux community to work overtime promoting their respective points of view to influence the opinions of corporate customers, the media, and analysts. Such posturing is designed to make one or the other party blink."

Does Ms Didio consider it "posturing" when people point out concrete factual errors? Does Ms Didio consider it "posturing" when people point out obviously misleading statements which have no basis in publicly available information?

And this is especially instructive. "In the interim, the case will be tried in the court of public opinion." "Would It not be in Yankee Group's interest and in the public interest that your published works be accurate? That these works add value to the debate and not make factual errors and baseless assertions?

There are a couple more inaccuracies in addition to those pro_coder noted:

Although SCO has given no indication it will file suit against any corporate customers in the near or intermediate term, registering the copyrights certainly gives the company the ability to do so.

According to a real lawyer (not some random analyst), registering a copyright in the US does not establish any ownership of the material. SCO have done some paperwork; they have not gained an ability in a meaningful way.

Big Blue is a loser at this point...

I'd be happy to bet $100 on which one of SCO and IBM will be profitable in five years.

IBM seem to be taking a slow and steady approach, rather than seeking to shut SCO up straight away. Presumably they're doing that based on good legal advice and confidence that they will prevail. Perhaps if SCO's FUD starts making customers edgy they'll change that approach. The option of offering indemnities, or a countersuit against SCO remains open.

Incidentally, DiDio's (old?) bio is on the web, plus comments on her competence to assess code issues, or legal or stockmarket issues for that matter.

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