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Why Open Source May Be Doomed
By Megan McArdle

I have to admit that I was never much of a believer in open source. Maybe my business school coursework rendered me blind to the glorious vision of a "gift culture" in which people contribute their work to a decentralized development project like Linux for honor instead of money. Or possibly I'm just too thick to understand how cutting off a multi-billion dollar revenue stream from software sales, without putting anything else in its place, could be good for the software business. Whatever the problem, I never quite believed in the fairy tale world they promised in which we'd all get an operating system that was better than Windows in every way, for absolutely no money -- not even when IBM started retailing Linux PC's and the juggernaut of fabulous free operating systems seemed unstoppable. But I confess that in all my skeptical musings, I did not imagine that Linux might be brought down by something even more prosaic than a lack of funds: a lawsuit. ...

...Don't get me wrong: for all my skepticism about open source as a business model, I think Linux is a great operating system. The decentralized development model, in which volunteers are constantly building, refining, and debugging the code has produced an unquestionably fine product. And, of course, it's free. Nonetheless, if SCO wins this lawsuit -- or loses on technical grounds other than copyright infringement -- I think you'll see corporations taking a pass on open source software. Because for corporations, the real problem with this lawsuit is not a few lines of stolen computer code, which is why HP's attempt to stop the damage by indemnifying its Linux customers against SCO is unlikely to work. The real problem is this: if you're an IT manager deciding whether or not to purchase a Linux machine, how can you be sure that those stolen lines are the only ones?

Corporations simply can't afford the risk of a lawsuit, even if the cost of a non-open-source OS is several hundred dollars higher. At the corporate level, lawsuits are expensive and distracting, even if you win. And at the IT manager level, telling the board that your hot new installation just embroiled the company in a legal battle is a career killer....