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We've discontinued all our Linux activities in the company because we identified that there were big problems with Linux.

Users assume that Linux is developed with the same sort of rigorous, commercial software development processes that, for the most part, goes into commercial software.

Linux is not developed that way. It has all sorts of people loosely associated making contributions.

Although the software is publicly visible as open source, we're talking about seven to 10 million lines of code. Even when you pour a lot of resources on it, it [takes] a substantial amount of time to go through all that code and look for possible issues.

So the argument that it's freely visible so it makes for pure software - well, maybe over the long term with enough resources that's possible.

We will help with the purification process. We're raising all these issues with Linux and identifying our intellectual property in Linux - putting Linux into a refiner's fire.

Would you perhaps at some time come back to selling something based on Linux?
I don't think so, primarily [because of] the licensing model with which Linux is provided, the GNU Public Licence. As we've really gotten into it, it appears very problematic for commercial software development.

It doesn't allow the commercial software provider to hold in reserve some of their proprietary bits that they've put a lot of energy and resource into.

It all has to be - effectively - put into the pot as shared stew, and it makes it hard for a company to want to make contributions to that sort of model, when they have no other means of being able to extract economic value.

In other words, software developers involved in Linux find it very difficult and it's hard to make money.

Linux was not developed completely independently. There are certain portions of it that were developed independently.

But there were some who made contributions, some of them large commercial entities such as IBM who we are dealing with in our lawsuit, who made contributions into Linux intellectual property for which they did not have the rights to do.

Can you give any indication of what sort of information you will be asking IBM for?
All the versions of AIX, so we can carefully analyse all the history of where AIX has gone, to compare with [IBM's] contributions made to Linux.

[When] we have the code snapshot of the whole of AIX, [we will] with 100 per cent assurance be able to say: 'Yes this did come directly from AIX without some intermediate modification.'

We do have a number of snapshots of some pieces of what IBM has contributed that we definitely can tell came from AIX inappropriately in violation of their contract with us.

HP and Novell have both announced indemnification schemes.
Neither of them have any IP basis to be able to provide indemnification. It's really not an indemnification. They are saying 'we will stand up and provide legal services for you if you are sued over IP issues over Linux.'

But there are lots of qualifications and limitations and you have to pay extra money to HP and Novell to get the indemnification programme; that's of the order of $700 per year for both of them. So the pricing of them is really steep and they are not true insurance - you can still face legal consequences.

They are also both capped in terms of how much they will pay. So if you're a very large user of Linux you may have a substantial amount of money you still pay. Their umbrella is very fragile in terms of what it's protecting you from.

Compare that to the licensing programme that we've been rolling out. We're providing the end user with a licence that is a one-time charge, about the same price as what they're charging for a yearly indemnification. So it's $699 for a one-time licence per most single CPU servers.

We have been in the process of rolling out the licence slowly and carefully. But now we're further rolling it out. We also expect we will be taking action against a number of Linux end users, and probably ramping that up over time.

Can you tell me who these users are? Can you give me any names?
No. We've changed them a number of times over the last month or so. Even if I could tell you, they would be subject to change.

When is the first one going to be announced?
It could be very shortly, within a couple of weeks. We'll have US entities that we'll take legal action against. We'll have other international entities we will take action against. Some will be multinationals, and we'll also probably take actions in international settings over time as well.

Any that are UK-based?
There are some large international users of Linux that are UK-based for which we have a great deal of concern. We have had some discussions with some of those companies. The discussions have not been fruitful.

As we're talking about very large commercial usage of Linux for which our intellectual property is being exploited [there's] a good chance of legal action.

It is unfortunate that end users bear the burden for liability related to Linux. It's because of the GPL. I don't think most companies realised what they were signing up for when they started making significant deployments of Linux. They are aware of it now.

The end user bears all the burden, and it's not quite as free as it used to be. Red Hat, Novell and the major providers of Linux now are charging more for Linux than SCO charges for its high-end commercial versions of Unix. So the benefits of Linux have largely gone away.

Linux supporters claim that because of the number of people who contribute to Linux, if there is a security hole it gets fixed much quicker.
There are also costs of having all the code always available. For example, if a robber had the blueprints to your house, would it be easier for them to rob your house? Yes. Because, when you can see all aspects of the code you can see the vulnerabilities that exist in the code.

When there are some portions that are held back or for peer review you end up with more reliable code because you don't give away the blueprints to all the possible exploitations. Fully open source, fully publicly viewable source code is not the most secure.

When you take a look at most commercial use of Linux, a very small number of end users really want to muck around in the source [code].

Now that Novell has completed its purchase of SuSE, will you be going after Novell?
It certainly is an option. We may or may not take action against Novell. But Novell has taken on itself a significant amount of liability in a number of ways.

It has acquired SuSE, which is in violation of the licence-back we have with Novell, [under which] we licence back to Novell intellectual property for them to use in a limited way in their core network business, as long as it did not compete with the business that Novell sold to SCO - Unix.

They would dispute that, wouldn't they?
Obviously they're disputing that because they've gone ahead with their acquisition of SuSE even though we've given them fair warning of the problem they will be facing and the liability that they're undertaking. Novell is kind of in a position that they had to jump onto Linux because they had nothing else.

Are you still going after Embedded Linux users?
We're getting feedback from end users who are using Embedded Linux. Hopefully in the next two months we'll have an announcement of specific pricing on that or pricing levels for an embedded version of the licensing programme.

What numbers of people have actually signed up for the Linux licence?
Not a huge number yet.

Tens or hundreds?
Tens. Given that I have only talked so far to 20 or so companies, we have a quite high adoption rate. I suspect, when we will be seeking legal action, that the adoption rate will increase, and we are also now allowing significantly more people to go out and educate on the licensing programme and provide the licence to people.

If somebody was on Linux and wanted to get off Linux, but they want to have cover for a period of time, we have a yearly licence that's only $149 per year on the same single server environment.

[The one-time licence] always was available. But we had it somewhat limited in terms of how much we were rolling it out. We've now trained our international salesforce. We will also be rolling it out to our qualified resellers in the coming months.

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