SCO says it signs new Linux customer; trains staff

Hoping to build a $12 million line of business during its current fiscal quarter, The SCO Group Wednesday claimed to have signed up at least one new customer for its Linux licensing scheme and is retooling its sales force to make its case more effectively to a skeptical market.

Hoping to build a $12 million line of business during its current fiscal quarter, The SCO Group Wednesday claimed to have signed up at least one new customer for its Linux licensing scheme and is retooling its sales force to make its case more effectively to a skeptical market.

The Lindon, Utah, company filed a $3 billion lawsuit against IBM in March, claiming that IBM’s contributions to the Linux source code violate SCO’s Unix System V intellectual property (IP) rights. SCO has since maintained that the Linux source contains even more IP violations, and in August it unveiled a $700 IP License for Linux as a way for users to bring their Linux software into compliance with its claims.

The Linux community blasted the scheme, claiming that SCO had no right to demand licensing payments without first making its case in a court of law.

Despite the community outrage, SCO received over 900 telephone calls in the week after it went public with the licensing plan, and some of those calls have now begun turning into licensing deals, according to company spokesman Blake Stowell. The company has signed up at least one additional customer since it sold its first IP License for Linux on Aug. 11, he said.

Stowell declined to reveal the identity of the new customer or say how many other customers SCO may have signed up, but he did say that almost all of the company’s 100 sales representatives are now spending time selling the Linux license, and that SCO is readying thousands of invoices that it plans to send to Linux users worldwide before Oct. 15, when the per-processor price of an IP License for Linux will double to $1,400.

“Over the last month or so, employees in our company have been doing research on various companies using Linux , and that’s what they’ve based who they would send invoices to,” Stowell said.

Commercial organizations using a 2.4 or later version of the Linux kernel in the U.S. will be the first to receive invoices. “For the most part, these are big business types of customers,” Stowell said. “Initially it will start in the U.S., and will make its way internationally.”

SCO’s sales force has become more aggressive of late in its approach to Linux licenses. The company held a one day “all hands” training session in early August to instruct its sales staff on how to qualify leads and approach customers about Linux licensing, according to a source close to the company, and since then SCO salespeople have begun approaching customers directly.

SCO predicted that it would earn between $9 million and $12 million in revenue this quarter from the SCOsource division that sells its Linux licenses, but the Linux licenses will be a hard sell, according to one industry analyst.

“It’s difficult for me to see very many corporations who are going to be willing to start shelling out money for licenses,” Illuminata analyst Gordon Haff said. “One can imagine some companies with a modest degree of exposure finding that paying a few dollars is less potential hassle than dealing with potential exposure down the road. But risk averse as corporations are, one has to believe that this is a small number.”