Linux users outside of the Fortune 1000 cannot buy the software license The SCO Group Inc. has been offering since August as a way to protect themselves against legal action, the company confirmed Tuesday.

"We're trying to execute on this licensing plan (by) really starting to deal with the very top players and working our way down," said Blake Stowell, a SCO spokesman. "After the company has rolled this out to the Fortune 1000 and we're satisfied with how the program is going ... we'll then roll it down to small to medium businesses."

SCO has asserted that the Linux source code contains a number of violations of its Unix intellectual property (IP) rights, though Linux advocates have hotly disputed the validity of the evidence it has presented so far. The company announced its Intellectual Property License for Linux in August, saying Linux users must purchase the US$699 license to avoid violating SCO's Unix IP rights.

Until Tuesday, SCO had not indicated that its Linux licensing plan is available only to the Fortune 1000, a term generally used to denote the world's 1,000 largest corporations. "We didn't articulate that at the time, and probably should have," Stowell said.

One Linux user who had been trying to purchase a SCO license since August said that he became frustrated by SCO's actions.

"It would have been easier for me if they had said something about that when I had first called them," said Drew Streib, vice president of operations with Permisoft Inc., a San Francisco software vendor that sells Linux-based application servers to city and state governments.

Streib, who considers himself a Linux advocate and said he probably would have purchased only one Linux license from SCO, expressed concern that the Lindon, Utah, company might consider his company legally liable for its Linux use even though he presently can't purchase SCO's license.

Linux users should not be concerned about SCO lawsuits being launched without warning, according to Stowell. "I don't think that any company is going to see a lawsuit rolled out to them that hasn't been given an honest and fair chance to purchase a license," he said.

SCO has admitted in recent weeks to having difficulties rolling out the licensing plan. Last Thursday it revealed that it had delayed until Nov. 1 a plan to double the price of the license in order to give users more time to buy licenses at the lower rate.

Stowell advised small and medium-sized businesses interested in the Linux license to wait for SCO to contact them. However, customers that contact SCO before the Nov. 1 deadline will be eligible for the $699 per processor rate even if they can't actually purchase the license by that date, he said.

Streib said he would like to see that in writing.

"Where's my letter saying, 'Thank you for talking to us, when we're ready to sell this to you you'll get it at the discounted rate and, by the way, we're not going to sue you?'" he asked.

SCO may be proceeding cautiously with licensing sales for fear of litigation from an entity like the Free Software Foundation which has intellectual property claims to Linux, said IDC analyst Dan Kusnetzky. "As soon as they sell the first one, litigation will be started from all quarters," he predicted. "I think the people from The SCO Group realized that if they opened that box, they'd never be able to close it again."

One SCO reseller said the decision to leave smaller businesses out of the licensing program will have little effect on his business. Most small businesses running Linux wouldn't purchase SCO's license anyway, according to Tony Lawrence, owner of A.P. Lawrence, a consulting firm based in Sharon, Massachusetts.

"I think the chances of collecting from small businesses are very small, because they have very little to lose," he said. "They don't necessarily know whether they have SCO or Linux. The only time they care about their computer is when it crashes."

IDG News Service

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