The Most Hated Company In Tech

“He can’t say he wasn’t warned. In June, 2002, when Darl McBride was getting ready to take over as chief executive at struggling Caldera International Inc. in Lindon, Utah — later renamed SCO Group Inc. — he mused that claiming ownership of some of the underlying code in the popular Linux computer operating system could keep the company afloat. Even though Caldera’s revenues were declining, it was losing $5 million per quarter, and its stock had slid below the $1 NASDAQ delisting price, the reaction of outgoing CEO Ransom Love was instantaneous. ‘Don’t do it,’ Love says he told McBride. ‘You don’t want to take on the entire Linux community.’

McBride did it anyway. Last March, he shook up the computer world by filing a $3 billion suit against tech giant IBM (IBM), claiming Big Blue had illegally inserted more than 800,000 lines of SCO-owned software code into Linux. Since then, McBride has turned up the heat. In December, SCO sent letters to more than 1,000 Linux customers accusing them of illegally using SCO’s property. Now, the company warns that it will sue a Linux user within days. One potential target, SCO says, is Internet search phenom Google Inc. The company, which says it has not talked to SCO about its claims, uses Linux computers and is on the verge of its initial public offering.

As a result of all this, SCO has become the most hated company in the tech world, surpassing, at least temporarily, Microsoft Corp. SCO has infuriated dozens of businesses and thousands of volunteer programmers who helped Linux become the world’s second-most-popular operating system for server computers, with tens of millions of copies in use, trailing only Microsoft’s (MSFT) Windows. Linux is open-source software: free in its most basic form and owned by no one. Many of the tech world’s top companies — including IBM, Hewlett-Packard (HPQ), and Dell (DELL) — have hitched on to this rocket. For its most ardent fans, no words are too harsh for SCO. “They’re a cornered rat, and I think they have rabies to boot,” jabs the normally mild-mannered Linus Torvalds, who started Linux as a college student in 1991.

The retribution against SCO has been fast and furious — a volley of arrows from all sides. Since it sued IBM, SCO has been slapped with two countersuits, one by IBM and the other by Red Hat Inc. (RHAT), the largest seller of Linux software. SCO’s Web site has been shut down three times by hackers. And McBride has even received death threats. One was so unnerving that SCO’s security had a sharpshooter in the room when McBride spoke at a tech conference in Las Vegas in December. ‘The theater of this — it’s sort of beyond belief for all of us,’ he says.”