Microsoft wins latest Halloween PR bout – without really trying

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Analysis Microsoft and SCO will be delighted by the reaction to Eric Raymond's latest Halloween Memo. Facing fairly incriminating evidence on the charge that both parties want to wipe out free software development, Microsoft walked free on the lesser charge of funding SCO's specific legal campaign against Linux, under the Scottish verdict of "not proven".

How did this happen? It hadn't been particularly good week for SCO. The company promised, and promised again to unveil a major customer for its Intellectual Property License. Computer Associates was eventually cited, an impressive name indeed. But it turned that CA hadn't purchased SCO's new IP license at all, but bought some UnixWare™ licenses from the Canopy Group. Indemnity by other means, yes, but it was "totally wrong" for SCO to represent this as legitimizing the IP License.

Bright Lights

Many SCO watchers - including Eric Raymond - hav been scanning the skies for bright objects which might provide the proof that Microsoft was not only walking amongst us, but funding the litigation itself. With the zeal of a UFOlogist, Raymond presented his 'proof' here.

"This is the smoking gun," he wrote. The email, from McBride's old pal Mike Anderer, proved that "the extent of SCO's sock-puppet relationship to its masters in Redmond", was now exposed.

Everyone loves a leaked memo, and Raymond's original Halloween brace were two of the most delicious exhibits that the tech community has enjoyed. (Our own favorites are bradsilverberg's intensely frustrated email to billg and Gates' own two carpet-munching exercises directed at Symbian and Nokia).

Equally, however, there's a trope to fetishize evidence. With so much synthetic "news", nothing has the refereshing ring of authenticity as a genuine leak.

But the map is not the territory, and a memo is rarely more than a dot on the map. However, a memo can mean much more than it really does, if you're convinced that the world must fit a particular narrative, and you've thus far has been starved of real evidence.

The memos we mentioned above are valuable because they revealed psychological approaches evident at Microsoft. Only two of the five memos could confidently be construed as containing strategic plans. Does Halloween X suggest that Microsoft financed the entire operation, or merely greased the skids for a plan which SCO had already hatched.

Raymond, who recently castigated John Perry Barlow on his weblog for demonstrating "paranoid self-absorption as a political style" (pot, meet kettle), has overlooked several possibilities that suggest otherwise.

The Mark of the Beast

One we know about. Microsoft had already paid SCO for a Unix license and this helped SCO embark on its legal campaign with both cash and the mark of legitimacy.

Another is that one of Anderer's roles was explicitly to bring in investment capital. He took a percentage on the deals. Boasting about how swimmingly this was going, and how much upstream clout he has, is entirely natural. As is over-exaggerating his own influence.

Rather more obviously, if Microsoft was, as Eric reckons, financing the entire operation, you'd think it would know better than to leave its fingerprints behind. It's true that Microsoft co-founder Paul Allen - and this is another factoid offered as proof of conspiracy - is an investor in BayStar Capital. But Allen invests in lots of things, not all of which are complementary to Microsoft's business. He likes a punt, which is the essence of high-risk capital investment.

It doesn't help that as an (anonymous) poster on Groklaw notes, Raymond double-counts the revised BayStar deal.

"ESR misinterpreted the memo in a couple fairly important ways. He double counts the new $16 to $20 million deal: first he treats it as part of the '$82 to $86 million' total, which he thinks has already
been paid to SCO, then he adds it in again, to get a projected total of $98 to $106 million.

"We already know where all of SCO's license revenue came from last year, and the total from Microsoft was ~$16 million. The leaked memo suggests only that Baystar was a 'Microsoft referral' and then attributes the $50 million to Microsoft, but I think Stowell is probably correct when he said that Microsoft did not actually fund that deal. I think they probably just pointed Baystar in SCO's direction."

"I think the key thing about this newly revealed deal is that it DID NOT HAPPEN. SCO was negotiating this in October last year, and Chris Sontag is claimed to have been not interested in a deal for less than
$5 million per quarter. Coincidentally that is just about what it would take to keep SCO in the black, and this is the time frame when SCO would have been eager to make a deal to rescue their just-reported

"From this email, if we take it at face value, a big deal was in the works that could have stabilized SCO's financials for the next four quarters. The deal has not materialized."

If the Beast was truly behind the deal from the start, wouldn't it prime the pump just when SCO needs the money the most, i.e., round about now? The alternative view, that Microsoft may have encouraged speculators to have a go, but that BayStar now views the proposition as somewhat less attractive, certainly seems more rational. The conspiracy case simply isn't proven.

In another sense, Microsoft will breathe a huge sigh of relief. The energy consumed by the SCO case - and what might be a fruitless search for a conspiracy - has distracted the software libre community from Microsoft's decision to embark on a patent licensing scheme of its own. ®

Related stories

SCO confirms MS 'smoking gun' email is genuine
Email 'leak' suggests SCO got up to $100m from MS
Microsoft aiming IBM-scale patent program at Linux?

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