(IDG News Service) — In a deal that brings together companies that Linux backers consider bogeymen, The SCO Group announced Monday it has shaken hands on a licensing agreement with Microsoft Corp. over SCO's Unix operating system.

Through the deal, SCO has licensed Unix technology, including source code and patents, to Microsoft, said Chris Sontag, senior vice president and general manager of SCO's SCOsource, a division in charge of managing and protecting the company's Unix intellectual property.

This deal ensures Microsoft is in compliance with SCO's Unix intellectual property and will help Microsoft improve the Unix compatibility of its products, specifically Microsoft Windows Services for Unix, Sontag said.

Windows Services for Unix, now in version 3.0, consists of different components that bridge the gap between Windows-based and Unix-based systems running in the same network, according to information on Microsoft's Web site.

The product's services include file sharing, remote access and administration, password synchronization, common directory management, a common set of utilities, and a shell, according to Microsoft's Web site.

Microsoft didn't immediately return calls seeking comment on the deal.

The deal is not a reward from Microsoft for SCO's recent legal challenges to the Linux operating system, Sontag said. Microsoft has been very vocal about the threat that Linux poses to its business.

"That is simply not the case," he said. "This is a standard, straight-up Unix licensing agreement like many we've done in the past" with other companies, he said.

The deal appears to be a normal Microsoft attempt to make sure it is honoring properly SCO's intellectual property rights, IDC analyst Dan Kusnetzky said. Those advancing a conspiracy theory to explain the timing of the deal will have a hard time proving it, he said.

"I'm not sure there's a way to support a quid pro quo notion. It is certainly an interesting theory, but it's one that would be almost impossible to prove or disprove," he said.

Asked to comment on the news of the licensing deal at a press conference Monday, Oracle Chairman and Chief Executive Officer Larry Ellison seemed to have no compunction about drawing a link between the agreement and SCO's litigation. "Bill (Gates) is innovating. Microsoft has always had incredible innovation. You've had advanced bundling and what you see now is extreme litigation. They have a lot of experience with extreme litigation, actually," he said.

Microsoft once licensed Unix source code from AT&T Corp., Unix's creator, but that license ran out after Microsoft abandoned the Unix-related project that had prompted the licensing, Sontag said.

The licensing agreement announced Monday is one of two SCO signed in its second fiscal quarter, ended in April, worth a combined total of over $10 million, Sontag said. He declined to be more specific on how much the Microsoft deal was worth.

SCO and Microsoft both have grievances against Linux. SCO, which owns Unix, claims Unix code has been illegally copied into Linux. Meanwhile, Microsoft sees Linux as a rising threat to its desktop and server operating systems.

The kernel of the Linux operating system is developed by a team of volunteers led by Linux creator Linus Torvalds. The Linux kernel is available to anyone who wants it free of charge. Moreover, it is distributed under a license that gives users access to the Linux source code, and permission to modify, copy, share and redistribute it. Linux is the best-known example of open-source software.

By contrast, most commercial software vendors, such as Microsoft, rarely, if ever, disclose the source code of their programs, and normally forbid users from freely modifying, copying or distributing them, an approach sometimes called "proprietary."

The SCO-Microsoft announcement comes little over two months after SCO filed suit against IBM Corp. and days after SCO said it will suspend its Linux business. [See "SCO drops Linux, warns Linux users," May 14.]

SCO has become increasingly reviled in Linux circles in the past two months with its allegations that Unix code has been copied illegally into the Linux operating system's kernel, allegedly violating SCO's intellectual property rights.

SCO's actions over this matter so far include a formal lawsuit against IBM and stern warnings against Linux users and vendors, such as Red Hat Inc. and SuSE Linux AG, that they also might be in violation of SCO's intellectual property. [See: "SCO sues IBM over Linux, seeks $1 billion" March 7] IBM has denied the allegations, while Red Hat and SuSE have brushed off SCO's warnings, saying they are baseless.