Settlement with Kodak no betrayal: Sun chief

Jonathan Schwartz made Sun's case during a wide-ranging interview conducted during a flying visit to Australia this week, in which he also discussed new pricing models, Sun's perspective of rivals such as Red Hat and Hewlett-Packard and the impact of patents on innovation.

Schwartz -- who was appointed to the post in April this year -- was visiting Australia to meet some of Sun's larger customers, including financial institutions, telecommunications companies and government agencies.

Sun has "not" betrayed us all
Schwartz launched his defence of Sun's position on the Eastman Kodak decision after reading this commentary posted on ZDNet Australia's sister site, ZDNet UK, which stated that the settlement "undoubtedly includes a cross-licensing deal" and that Sun had "handed over the Danegeld" (defined in entertaining terms here).

Eastman Kodak and Sun had announced the settlement less than a week after a court in western New York ruled in Kodak's favour over accusations that Java violated three Kodak patents. Kodak had sought more than US$1 billion in damages. Sun agreed to licence the patents for US$92 million.

Schwartz said there was "no cross-licence" and that the settlement was at least partly driven by the fact the litigation was pursued through a court in Rochester, New York -- where Kodak's headquarters are located.

"To be found guilty in the headquarters of Kodak of infringing on Kodak's intellectual property by a jury of Rochester citizens who are probably very rightfully worried about the future of Kodak .... now one could take from their initial finding some potential concern that we would have to worry about having received the conclusion of the initial phase of the trial that maybe there'd be a large damage settlement," he said.

"Now, if you were us, and you were looking to protect your customers, protect your developers, protect your licensees and moreover protect your shareholders, the last thing in the world I think we'd want to do is say, let's go roll the dice again".

Schwartz said he "was not a big believer" in the aforementioned article's fundamental thesis and took particular issue with the "handed over the Danegeld" line. "Well, I guess I didn't want to put a billion dollars at risk from a jury that had already in some sense tipped its hand".

"I think what we did was very responsible and moreover, if you're a developer, you should take great solace in the fact that Sun ensured that no-one would come after you.

"And if you're a Sun customer, you should take great solace in the fact that we indemnified our customer base.

"We made sure they were not exposed to the risk that we were exposing by being a developer of intellectual property".

Taking the fight to Red Hat
Schwartz described a recent column by Forrester Research's chief executive officer, George Colony, as "about 80 percent right," taking some of the blame himself for not explaining the company's position properly.

Colony had interpreted a briefing by Schwartz and Sun's chairman and chief executive officer, Scott McNealy, as stating Sun's tactic on Linux was to make the argument that the open source operating system was "nothing more than Red Hat". However, Schwartz indicated Sun's remarks were primarily directed at the data centre.

He told ZDNet Australia   "I think what I did not effectively communicate to him is Linux in the data centre is Red Hat. It's one company. And that's largely because in software markets, markets tip.

"As soon as an independent software vendor qualifies to a single release, all the other independent software vendors will qualify to that release.

"Because customers can't deploy 'Linux,' they have to deploy a company's products. They have to deploy Red Hat," he said. "And so, what we've done is, recognising that customers can no longer afford the diversity of 100 different Linux distributions, they have dominantly picked Red Hat.

"And that's actually good news for two reasons. Firstly, I don't like putting Sun into a position where we are competing with the social movement upon which we were founded and secondly, it's become evident to me that as we now begin competing with Red Hat ... we [can] beat them because we have a better operating system that runs faster, has more scalability, has much better security [and] has global support standing behind it.

He stressed this competitive streak did not extend to the desktop and his aim was not to "vilify Linux.

"We are the largest deployer of Linux in the world on desktops.

"We have done more to advance the cause of open source and Linux than any other company times five".

Schwartz added, however, that the rise of Red Hat had significant ramifications for IBM. "It's also become evident to us that as Red Hat grows in strength, IBM is increasingly recreating history.

"They were in love with this little company called Microsoft because they dealt with the inconvenience of a PC operating system and that one company ended up hollowing out IBM over a period of a couple of decades, arguably better than anyone else has.

"Now, as far as I can see, on x86 servers, IBM is just recreating history, they've invited Red Hat into their installed base. Red Hat is beginning to compete with them. And that to me, looks an awful lot like history".

Asked whether IBM may be forced to buy out Red Hat, Schwartz agreed.

"And if they do, this notion of Linux as free and pure and anything other than Red Hat is going to be a tough message for IBM to communicate.

"Something tells me if the open source community found IBM, as the world's largest patent litigator, owning this free operating system called Linux, that they may have an adverse reaction".