Sun goes on the software offensive

Scott McNealy has taken the bull by the horns and announced two software bundles - aimed at Microsoft's desktop market and IBM's middleware customers
Written by Andrew Donoghue, Contributor

The best form of defence, allegedly, is attack. Never one to do things by halves, the chief executive of Sun Microsystems Scott McNealy has taken this strategem on board -- and then some.

Confronted with a stalling stock price -- caused to some extent by the company's potential customers opting for the cheaper combination of Linux or Windows on Intel rather than Sun's Solaris operating system on its expensive but robust servers -- McNealy has decided to not only hit back but slip a pound of lead into his boxing gloves.

Sun lost around $2.38bn in the last financial year along with then president and former COO Ed Zander. Adding insult to injury, the company's image as a technology innovator took a blow last week when the company's chief scientist and uber-geek Bill Joy announced he was leaving the company possibly to start his own firm.

But rather than trying to simply roll over, go with the flow and rely on continuing areas of strength in high-end supercomputing and Java-based Web services, Sun has apparently decided that rather than carving a niche for itself in the current computing landscape, it's going to bulldoze a quarry.

Speaking at this week's SunNetwork 03 conference in San Francisco, in typical bullish mood, trademark white teeth on display to the home crowd of Sun groupies, McNealy kicked off the three-day event by aping the controversial campaign to recall the current governor of California, Gray Davies, by promising to "recall cost and complexity" in the IT industry.

McNealy then went on to imitate US late-night talk show host David Letterman's trademark 'top ten' shtick with a supposedly comedic list of reasons IT is too costly and complex. "Number Eight: Of the $87bn slated to rebuild Iraq -- $80bn is slated for IBM Global Services," he quipped.

The Sun chief -- who named his children Maverick, Dakota, Colt and Scout after US cars -- also continued an analogy he has been pushing for the last year or more, that the computing industry should model itself on the motor industry. In this analogy, the industry should focus on the "performance and handling of systems" rather than getting caught up in the nuts and bolts of individual components such as operating systems and processors.

Having carefully laid the groundwork of where the industry is going wrong, he then let rip with Sun's solution to the problem. McNealy has effectively initiated a war on two fronts by announcing two software bundles that seem to go after the core business of its two main competitors in the enterprise computing space: Microsoft and IBM.

The bundles, aimed at Microsoft's desktop heartland and IBM's middleware strength, previously given the respective codenames Mad Hatter and Orion, were fleshed out and their slightly less imaginative go-to-market titles formally announced -- Java Desktop System and Java Enterprise System.

Formerly known as Mad Hatter -- a shortening of Alice in Wonderland's Mad Hatter's tea party to suggest the disparate software elements that go to make up the package -- Java Desktop System is Sun's repost to the Windows and Office bundle. Sun is obviously hoping that the momentum caused by the recent rash of viruses combined with the groundswell of support for Linux on the desktop will provide the right conditions to unseat the Redmond clan from its dominance in client software.

Set at the catchy price of $100 per desktop -- catchy that is if you happen to be a US customer, the UK will have to put up with the clunkier direct conversion of £62.40 -- the Sun Java Destop comprises Sun's StarOffice 7 open-source alternative to MS Office, a desktop environment based on Gnome, the Mozilla browser, and Ximian Evolution for email and calendaring applications.

Meanwhile, on the middleware front, and also priced at around £65 per employee, the Java Enterprise System consists of a series of products previously bundled under the Sun One moniker including directory server and a portal server as well as calendaring, Web server and messaging software.

Although Jonathan Schwartz, executive vice-president of Sun's software group, claims the bundles could net the firm around $1bn in annual revenue if the company's top 65 customers' 10 million employees bought into the software strategy, the whole focus of the push could be seen to feed back to Sun's cash cow business -- servers.

The software bundles, combined with the emphasis on reducing complexity via a utility computing model that pushes the idea of software as a service and thin clients, is a clever way of pushing companies to buy more of what Sun does best and makes most of its cash from -- servers, and the bigger the better.

When confronted about the motivation behind the software bundles, Sun's Schwartz admitted that the company is hoping that the software push will eventually feed back into its server business. "No one runs software on anything else but hardware, so as we sell more software this will create a halo effect on our hardware," he said.

Whether the software 'halo' will illuminate Sun through the dark days ahead remains to be seen. With around $5.7bn in the bank and products that range from Java smart cards to super computers, Sun's definitely not going down without a fight.

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