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Google and Sun differences are more than source deep

Matt Asay suggests that Google and Sun made the same bets on the future, and so far only Google has won. I would like to respectfully disagree. Not just that they made the same bet. But that Google has won.
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Written by Dana Blankenhorn, Inactive on

Matt Asay suggests that Google and Sun made the same bets on the future, and so far only Google has won. (To the right, the best CEO ponytail evah!)

I would like to respectfully disagree. Not just that they made the same bet. But that Google has won.

Let's review our history first.

Sun came to open source as a large, proprietary hardware business. Its revenue was, and is, driven by sales of servers, not software. And that business was sinking long before Scott McNealy made his dramatic turnaround on open source.

Google, by contrast, is a product of the open source ethos. It has no proprietary baggage. More important, its constant emphasis on cost reduction in delivering Internet services has made it enormously profitable.

In open source Sun bet on tools, on Java and mySQL. It bet on the business side of the open source market.

Google is betting on the consumer side. Its Android and Chromium projects are designed to enable mass market Linux devices of all types -- handheld, tablet, and laptop.

Finally, and most important, we don't yet know whether Google has won its bet. The different financial pictures of the underlying companies make it impossible to see any result.

What's clear in Sun's case is that open source was not the business. Hardware was always the business. Open source was a way to put lipstick on that pig and have it dance hoping someone would want to buy  it.

That someone was always assumed to be IBM, but it turned out to be Oracle, which lacked IBM's commitment to open source and didn't see the lipstick, only a barbeque.

What's clear in Google's case is that its revenue is still driven by advertising. Open source is an even smaller portion of its revenue stream than it was for Sun, back in its ponytailed heyday.

Ads still subsidize everything Google does. The acquisition of Doubleclick turbocharged Google's results, because its technology and sales efforts were combined with Google's low infrastructure costs. Android is still not "accretive" to earnings -- as the Wall Streeters say.

And it's hard to tell when that might happen. Google's intent here is to increase Web traffic, to widen mobile data streams so they are no different from fixed, and know it will get its share of the increased wealth that generates.

So to summarize. Sun was about hardware, Google about services. Sun was sinking when it came to open source, Google was rising. We don't know that Sun's open source efforts brought it anything more than a suitor, and Google's success with open source may always remain opaque, impossible to measure in a bottom line way.

Other than that, they're identical.

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