Users split on need for legal indemnification

IT users are apparently split on whether new legal indemnification programs from major vendors such as Sun Microsystems Inc., Novell Inc., Hewlett-Packard Co. and SUSE Linux AG will fuel a wider adoption of Linux within their businesses.

In interviews at the LinuxWorld Conference & Expo in New York, a sampling of users in businesses where IT is mission-critical, such as insurance and health care administration, said the expanded indemnification programs make them more comfortable with Linux. But they said other factors remain to be addressed inside their companies before they can decide how to proceed.

Other users said indemnification is simply not an issue for them or -- at best-- is far down their list of criteria.

The issue of indemnifying, or protecting, companies that use Linux from legal actions similar to the lawsuit filed earlier this year by The SCO Group Inc. against IBM has arisen numerous times during this week's event. Just yesterday, IBM said it wouldn't offer any such program because it doesn't believe indemnification is needed.

Users were less certain.

Rudy Ebisch, assistant technical support director for core systems in the IT division of Canon U.S.A. Inc. in Lake Success, N.Y., said legal concerns are definitely a factor as his company eyes Linux as a possible alternative in a migration from multiple operating systems.

"That's the No. 1 question my general manager asked when I was coming here," Ebisch said. So far, the printer and copier vendor is trying out the open-source operating system only in small ways, including experiments with network monitoring tools. But as major vendors, including HP, Novell and Oracle Corp., adopt Linux strategies, Canon's options continue to expand.

"It makes it legitimate," he said. "I'm not taking the risk I would have a year ago" by moving to Linux.

For Canon, though, any move to Linux will be slow, he said. The company isn't looking so much for cost reductions as for long-term security. The company, which has deployments of Novell NetWare, IBM AIX, HP-UX and Windows NT on several hardware platforms, would more likely consider Linux as a replacement for one of the existing systems instead of simply adding it to the mix, he said.

Richard Teasdale, a Unix administrator for a U.S.-based insurance company that he asked not to be named, said indemnification programs "make it more palatable" to consider Linux. But that's just one issue of many that must be considered.

"I don't think it's a make-or-break issue," he said. "We're looking at it. We're under tremendous pressure to reduce costs so we're looking at every way ... and Linux is one of them."

Colt Jackson, a systems engineer at CareFirst Inc., an Owings Mills, Md.-based health care insurance company with subscribers in Maryland, Delaware and Washington, D.C., said IT planning in the insurance industry moves at a conservative pace. As a result, indemnification programs are helpful -- but won't likely trigger a mass migration.

Health insurance companies "want to have a track record for technologies they put in place, but they don't want to create that track record themselves," Jackson said. "They definitely want to limit risks."

Another user, an enterprise architect at an East Coast financial services company who asked to remain anonymous, said indemnification is indeed meaningful. "It actually is something we were really concerned about. We were in the process of putting together a position paper on Linux when the (SCO) lawsuit hit, and we put it on hold," he said. "But to have companies step to the plate and say they're having indemnification programs meant they were acknowledging and dealing with the problem."

Questions remain, though. "We're not coming away from this with any big reasons not to (move to Linux)," said the enterprise architect. But because it will likely take years for legal issues to be resolved, "it's important for the companies that believe in their (Linux) products to back them up with indemnification," he added.

Alex Drought, head of technology for movie editing workers at Blue Sky Studios in White Plains, N.Y., a unit of Fox Filmed Entertainment, said indemnification means little in his business, where film studios can quickly turn to other operating systems like Apple's Mac OS X in the event of legal problems such as the SCO lawsuit.

That's different from the situation at financial services and insurance companies, where a quick change isn't possible because of the depth of their IT integration and architectures, Drought said. "They cannot turn on a dime if things change overnight," he said. "They would really be in a tough position."

On Monday, Red Hat said it will offer a program that it calls the Open Source Assurance Program to protect all existing and future Red Hat Enterprise Linux customers from legal challenges as long as they're using the software. Red Hat's move comes on the heels of last week's decision by Novell to indemnify SUSE Linux customers against possible legal action from SCO.

In its lawsuit, SCO alleges that IBM contributed some of SCO's System V Unix code illegally to the open-source Linux project. Additional suits and countersuits have been filed by Red Hat and Novell since the case began.

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