McNealy: CDDL is 'best of both worlds'

update Sun Microsystems CEO Scott McNealy says his company's open-source licensing model offers better intellectual property protection against software patent infringement.

update SINGAPORE--Sun Microsystems' Community Development and Distribution License (CDDL) addresses the limitations of proprietary and open-source licenses, according to its head honcho Scott McNealy.

Before Sun established the CDDL, the market lacked an open-source license that could encompass the best of both worlds--community sharing and profitability. Creating revenues to fund next-generation software development, McNealy said, is just as important as the need to develop intellectual property (IP). The CEO was addressing regional journalists and Singapore's IT industry in separate sessions today.

"CDDL allows the co-mingling of open-source with owned and protected IP," he said, adding that businesses and governments can then use the licensing model to create and protect their IP portfolios.

In contrast, some open-source licenses such as the General Public License (GPL), require developers to give their source codes away.

Driving home his point about IP protection, McNealy asked rhetorically: "What do you do when Microsoft comes knocking on your door?

"Say you're China, and you have adopted Linux. And all of a sudden, as a member of the WTO (World Trade Organization), you (may) step on a whole bunch of Microsoft patents by implementing Linux," he explained.

Barriers to exit
According to McNealy, the real cost of any technology is not in acquiring it, but the cost of moving away from that technology when it becomes obsolete.

"All IP and technology in the computer industry have the shelf-life of a banana. It's all going to be obsolete in 18 months," he said. "Rather than worrying about how much it costs to acquire technology, you should ask how much it costs to get away."

"Countries should understand that the barriers to exit for mainframes and PCs, override and dwarf the costs of acquisition by orders of magnitude," he said. "Beware of the IBM and Microsoft sales representatives who come in (touting) a low cost of acquisition."

Technology decision makers should consider whether their vendors operate on open source with collaborative development, "to create a sharing-like strategy that lowers the total cost of exit", McNealy said.

"Sun has a very low barrier to exit. I have empirical evidence that it's easy to move out of Sun--it's our revenue," he added. "But now that we are very (focused on) price-performing, and even more focused on collaborative sharing, I think we are a natural partner for countries because we will not lock you in."

"We will allow you to develop your own indigenous IP portfolio and engineering. We are comfortable with that, but I'm not sure if IBM and Microsoft are."

During both presentations, McNealy constantly took digs at his competitors including Dell Computer, IBM and Microsoft.

Sun has the ability to protect customers against Microsoft, he said. "We don’t post bugs on our Web site and hope somebody will fix it. The NSA (National Security Agency) hates that, and most security agencies do."

He also criticized IBM's managed services strategy. Using the analogy of a truck, he said: "They will buy your truck, garage and mechanics--that's called outsourcing. Then, they'll customize it even more by putting Tivoli mufflers, and then they got you."

"When you bring the truck back (from IBM), you can't recognize it…and (that's when) they'll do another five years of outsourcing."

Sun's big bets
McNealy also gave a glimpse into the technology areas that Sun is focusing its future on, starting with what he calls 'display-over-Internet Protocol' which can be delivered by the Sun Ray thin-client workstation.

"Let me argue that the display grid may become one of the most compelling products over the next 10 years," he said. "(It's a future where) your computer will reside somewhere on a grid network."

"Why do you care where your desktop is? You can just stick a (Sun Ray) card in and the display shows up (your personalized desktop profile). If you take out the card, the screen is gone. Somebody can steal the desktop and not steal anything," he said, likening it to a scenario where someone can have his TV stolen but still be able to watch a football game on another TV.

McNealy is also placing his bet on the company's open-source Solaris operating system, which has had close to 2.5 million downloads so far, he said. "We'll monetize it through service contracts. This is a potential iPod moment for Sun," he quipped, referring to how the popularity of iPod had helped turn Apple Computer around.

He further predicted that Windows and Solaris will be the only two operating systems left in the market eventually. "I don’t know who third place (holder) will be, maybe Red Hat. And after these three, what's fourth place?" he questioned.

"After Red Hat, it's kind of over," he said. "Consolidation in the industry is happening faster than you'd realize."

McNealy said that Sun is still open to acquiring more companies. However, he stressed that he would only try to buy complementary and synergistic companies, and not try to eliminate the competition. "We are not quite like (Oracle CEO) Larry Ellison," he jested.