Sun's Big Blue bluff?

Schwartz's original thoughts on the issue surfaced over the weekend in his personal blog. His remarks suggest that IBM should be compelled to make the first move on Novell. "IBM is in a real pickle. Red Hat's dominance leaves IBM almost entirely dependent upon SuSe/Novell. Whoever owns Novell controls the OS on which IBM's future depends," Schwartz wrote in his blog.

However, subsequent conversations with Schwartz suggest that Sun is the aggressor, and not just jerking IBM's chain. Later, the Wall Street Journal reported Schwartz as saying that an acquisition of SuSE Linux, which runs on IBM's Power servers and mainframes, "could speed Sun's effort to spread Solaris to other servers."

In explaining his rationale, Schwartz told eWeek that such a move would ultimately force IBM to depend on Sun for its Linux operating system. IBM is already beholden to Sun for Java (one reason that Sun isn't rushing to open source that technology).

There's no doubt that Sun relishes the thought of IBM being beholden to it for yet another critical piece of today's software infrastructure. Schwartz's presumption that IBM would be beholden if Sun purchased Novell piqued my interest since, the last time I checked, IBM wasn't even beholden to Novell. Schwartz, however, has an explanation for this, too.

Referring to Red Hat's announcement at LinuxWorld that it would start to bundle ObjectWeb's open source-based J2EE application server (known as JOnAS) with Red Hat Linux (as well as sell support subscriptions to it), eWeek quoted Schwartz: "Now that they [Red Hat] are supporting an application server, IBM now finds Red Hat competing against it in its installed base."

The installed base to which Schwartz is referring is that of WebSphere--IBM's own J2EE-based application server. Schwartz is suggesting that by bundling JOnAS with its version of Linux, Red Hat is stabbing its partner and benefactor IBM in the back. Naturally, if you buy into Schwartz's theory, IBM will find this situation so objectionable that it will be left with no choice but to turn to the only other distribution of Linux that supports its hardware: SuSE.

Schwartz's quote in eWeek says it all: "What would happen if Sun decided to acquire Novell? What would IBM do? If Red Hat is competing with them, they are left with only one choice: Novell SuSE Linux. And no matter how small a portion of the market SuSE represents, it runs on all of IBM's hardware. Sun could then end up as the owner of the operating system that runs IBM's mainframe. Wouldn't that be an interesting scenario?"

The scenario is interesting because of what Schwartz says he'd do next--look to migrate SuSE's installed base to Solaris 10, which is due at year end and will run Linux applications. Schwartz contends that this scenario would put IBM, which doesn't have control of an operating system, between a serious rock and hard place. IBM could end up repeating history; Big Blue failed to scoop up Microsoft over a decade ago and invested in its own operating system (OS/2), which turned out to be a losing proposition.

After news surfaced of Sun's potential M&A activity, Schwartz told me via e-mail, "We believe our commitment to Solaris, and to simplifying modern Web services, gives us a huge advantage against a company without an operating system. And that IBM's reliance on public relations instead of innovation is leaving them as exposed as they were in the Microsoft era."

Schwartz has made no secret about his ambitions for Solaris to take on Linux. It's a battle that Schwartz is confident can be won by Sun (and Solaris). Compared to other vendor-specific implementations of Unix -- HP-UX and IBM-AIX -- "Only Sun has chosen to continue investing in [Unix]. We've brought Solaris to industry standard AMD, Intel and SPARC servers and we've announced plans to open source it," Schwartz told me.

Schwartz's theory of IBM's potential reliance on Sun, however, is dependent on his characterization of Red Hat's JOnAS bundling and support announcements as serious competition aimed at IBM and WebSphere. If this is the lynchpin to Sun's M&A ruminations, as it appears to be so far, I believe those ruminations are little more than red herrings. Here's why.

For starters, regardless of how well JOnAS works with Red Hat Linux -- relative to WebSphere, a J2EE server that rates first or second in market share (depending on which research you believe; it jockeys with BEA's WebLogic) -- JOnAS is as insignificant to IBM as a fly on a rhino in a wading pool in Africa. Relatively speaking, Microsoft's .Net is a far greater threat to WebSphere than JOnAS is or ever will be.

JOnAS' open source nature is not necessarily a ding against the product, but the limbo that all open source J2EE servers are in when it comes to certification for J2EE compliance is an issue. JOnAS is less than a sure bet when compared to bonafide certified offerings such as WebSphere or WebLogic.

To be fair, JOnAS is on course to get its certification. But, given Sun's lack of a final official, one-size-fits-all-policy (as well as continued wavering) on open source implementations of Java (virtually all such deals are taken on a case-by-case basis), corporations can't help but to have some additional discomfort when venturing into the open source Java zone.

None of this is to say that JOnAS isn't a worthy J2EE server. It's just that Microsoft is clearly one of IBM's top competitive priorities. If IBM found doing business with the purveyors of competing application servers to be so unpalatable that it would discontinue doing business with them (as in focusing strictly on SuSE in lieu of Red Hat), it would have acted accordingly against Microsoft. Yet, it hasn't. I just don't see IBM as being that impulsive in response to Red Hat's decision. In the same way the company must acknowledge the market reality that customers want IBM's servers with Windows .Net Server on them (by all measures, Red Hat has a commanding lead in the enterprise market for Linux servers even though most of IBM's iron is equally supported by SuSE), it must and will continue to acknowledge their customers' desire for choice, including Red Hat Linux.

Furthermore, if IBM has a problem with Red Hat's bundling of JOnAS, then it would have much more of a problem with Novell's announcement at LinuxWorld that SuSE Enterprise Linux Server 9 will now be bundled with the other big open source J2EE server--JBoss. Having been one of the first open source J2EE servers, and one of the first to work through the dicey certification issues, JBoss clearly commands the lion's share of the market's interest in open source J2EE servers and is, in fact, along with the Apache's Tomcat servlets, almost synonymous with it.

Assuming that Novell remains a stand-alone company, if IBM has any proclivity to turn it's back on a Linux distributor that's bundling an open source J2EE server with its operating system, then my sense is that it would turn its back on the bigger threat (Novell/JBoss) before it turns its back on Red Hat/JOnAS.

If Sun buys Novell, then any appetite that IBM has for working exclusively with SuSE would most surely subside. After Microsoft, Sun is the company that IBM most despises (in fact, the two competitors are now in a partnership that clearly threatens IBM). Furthermore, if IBM has a problem with companies that bundle open source J2EE servers with their Linux distributions, that problem would have to be compounded by doing business with a company that gives away a commercial, certified, J2EE application server (Sun's Application Server 8) that Schwartz himself has positioned as a challenge to IBM.

During an interview for a previous column regarding turf wars on the Java front, Schwartz discounted IBM and BEA's collaboration on some J2EE extensions as a desperate response to Sun's release of the free Application Server 8. Bottom line, even if JOnAS represents a threat to WebSphere, Application Server 8 is far more of a threat which means, if you follow Schwartz's logic, Sun would be a far riskier partner than Red Hat.

For a moment, let's toss out my devil's advocacy and instead, simply consider IBM's thoughts on the issues. According to Steve Eisenstadt., spokesperson for IBM's software division, "The Red Hat app server is meant for a different audience than WebSphere. I've seen coverage where [Red Hat CEO] Matt Szulik has said that himself. The Red Hat app server will provide a basic level of functionality, and not capabilities that a typical mid-market or large WebSphere customer seeks."

Regarding IBM's relationship with Red Hat, Eisenstadt said, "As you know, IBM and Red Hat have a strong partnership. We work together to support and enhance the Linux kernel, we collaborate to ensure that Red Hat Enterprise Linux runs on IBM's entire eServer line, and Red Hat Enterprise Linux is a strategic Linux distribution supported by IBM's software portfolio. The IBM sales force and our partners lead with the WebSphere family of infrastructure software that includes WebSphere Application Server (and WebSphere Application Server Express for the mid-market). If the Red Hat app server will help certain customers, that's great. We think that Red Hat promoting open standards-based solutions is positive for the industry and customers. Our view is that all support for Linux and open standards is good."

If IBM is experiencing a sudden love loss for Red Hat, it's certainly not reflected in the company's official position. Eisenstadt's use of the term "strategic" to characterize how Red Hat Linux fits into IBM's software portfolio is, at the very least, a statement of long term direction.

Sun's Schwartz is one of the sharpest people I know. There's no question in my mind that he's been through the very same logic that I've just outlined. So, what could Schwartz gain by speculating openly about acquiring Novell? One small victory is that some of the news reports that I have seen have pointed to his blog. This is not an insignificant coup. Blogs can be an extremely powerful messaging tool for executives like Schwartz who want to make a connection with current customers as well as prospective ones. I'm surprised that more tech executives aren't doing it.

Another thing that Schwartz's speculation accomplishes is that, within 24 hours, he and other Sun executives get to gauge the market's receptiveness to such an idea. This couldn't be done in a press conference since Sun has nothing to announce.

Also, just because Schwartz's explanation for buying Novell doesn't make a whole lot of sense doesn't mean that Sun isn't interested in the acquisition for reasons that Sun would rather not disclose. Few companies have the inside track on the realities of the Unix intellectual property dispute that Sun does. If Novell has the rights to Unix that it says it does, then it's entirely possible that a purchase of Novell puts Sun in the catbird seat with respect to not just Unix ownership (a move that could eliminate any minor barriers to open sourcing Solaris), but management of IBM's license to Unix (which Novell contends that it, and not SCO, is in control of). Additionally, any substantial control of Unix intellectual property would improve Sun's invulnerability to future patent infringement relating to Solaris or Linux.

Intellectual property rights might not be the only Novell asset Sun is after. Though specific plans have yet to surface, I've speculated that one outcome of the newly minted relationship between Sun and Microsoft might be a Microsoft-endorsed, Sun developed and distributed *ix-based (Solaris and Linux) version of .Net. Right now, the only meaningful work being done to make .Net available on non-Windows platforms is the Mono Project, which Novell inherited when it acquired Ximian last year.

Finally, by bluffing, Schwartz could be trying to force IBM's hand. This entire flurry of speculation started with Schwartz's implication that IBM will make a play for SuSE. What Sun probably most wants is for IBM to make a play for either SuSE or Red Hat--a position that IBM has so far avoided and will continue to avoid.

Why? Look at what happens when an 800-pound gorilla with significant market influence owns a popular operating system. Sooner or later, it ends up in court defending itself against the trust busters and open source developers crying foul. When it comes to antitrust law, IBM has been there, done that too many times. IBM knows that if Linux continues to make inroads, it could end up in antitrust court again 10 or 20 years from now. To IBM's credit, it has learned that it doesn't have to own an operating system to influence its direction. And, as long as the operating system lives in the open source world, IBM can easily nudge it any direction that best satisfies the company's agenda without claiming ownership. In a world like that, IBM gets to have its cake (evolve the OS to its liking) and eat it too (be immune to antitrust since it doesn't own Linux).

Will Sun buy Novell? I wouldn't count on it.

You can write to me at david.berlind@cnet.com. If you're looking for my commentaries on other IT topics, check my blog Between the Lines or my archives.