What’s in SUN’s sights next year? Microsoft, of course.

1999-10-15

With earnings at 33 cents per share, SUN finished its first fiscal quarter of Year 2000 beating analysts expectations by 2 cents. With its ISP successes, Java story and now StarOffice, the company would appear to be full steam ahead for a successful year.

SUN is, at the end of the day, a platform company. It wants to ship hardware, and not just any hardware. Despite having more or less launched the open systems movement in the eighties, SUN systems look pretty proprietary. Sure, they run Unix, but it is still the case (despite efforts to the contrary) that SUNs are used to develop and run SUN applications. The miracle of a single operating system flavour never happened – indeed, the closest we might get to that is through Monterey (which is ostensibly IBM’s AIX ported to 64-bit Intel with SCO technology) or Linux, which (let’s face it) is a phenomenon happening despite the best efforts of the major vendors. Remember when SUN refused to allow the Linux sources on SunSite, its download portal? Enough said.

Despite all this, the SUN platform has become “the enterprise platform of the Internet”. This has far more to do with marketing and alliances than technology, though admittedly the high-end of SUN hardware has grown up to encompass the kind of transactional capability that we expect of eCommerce sites. What of Java? The programming language has achieved widespread acceptance (according to our own figures, 28% of programming job ads are for Java, compared to 38% for C++ and the gap is closing), however one of Java’s essential strengths is its portability so it cannot be seen as one of the technical drivers towards using SUN. All in all, a pretty slick campaign, in this phase of technology where managing the mainstream is at least as important as having a good product.

So that’s SUN’s first goal met. Given the way the Web is going, SUN would have to make some pretty big mistakes to lose its market share. Microsoft won the desktop and, with Windows 2000, will make more inroads into the departmental market, but the enterprise will remain a Windows exclusion zone for the forseeable future. On to SUN’s second goal, which is dubbed self-protection by the senior execs of the company. Truth is, though, that the company smells blood. The next big battle to be fought is for Application Service Provision – providers, or ASPs, are ostensibly ISPs who cannot make any money through a basic connection and hence who are looking round for differentiating sets of application services that they can offer. At the client end, the operating system is unimportant as it is likely that the majority of applications will have a Java-based front end. Server-side, however, a decision will need to be made over which, compatible set of applications can be provided. As always, this boils down to “should we run a Microsoft configuration, or not?” ASPs will want to offer the set of applications which are most appealing to their customers. At the moment, despite most of their functionality being ignored, Microsoft Word, Excel and PowerPoint are the de facto desktop applications. This may be for no other reason than file compatibility, but ASP customers are unlikely to move to a set of services which cannot read their existing files.

Enter Star Office, which reads MS Office files like a native. It is unlikely that SUN see Star Office as a strategic application. More realistically it is a non-application, intended to remove differentiators from the Microsoft-based offering. Microsoft apps need Microsoft OS need Intel hardware, it’s that simple. If SUN do not challenge the perception that MS Office is essential, then the corporation may end up losing a sizeable part of its ISP business. It is interesting to note Scott McNeally’s recent comments concerning the his doubts about Microsoft breakup – given the size of the prize, it is likely he would prefer one big target to lots of little ones.

(First published 15 October 1999)