Sun: Zero-revenue model is no threat
Published: 12 Feb 2004 11:30 GMT
Sun Microsystems may have been the last major server maker to embrace Linux, but chief executive Scott McNealy argues that the company will benefit more than its competitors from the open-source software.
"The open-source model is our friend," McNealy said on Wednesday at the company's analyst conference in San Francisco.
Software in general has a low cost of distribution and of goods sold. The collaborative programming philosophy of open-source software lowers another expense: development. Open-source software, therefore, increases the pressure to move software pricing toward zero, McNealy argued.
"Sun, more than any company in the world, is less threatened by a zero-revenue model for software than just about anybody out there," because Sun sells a combination of hardware and software, McNealy said. "This is putting an immense amount of pressure under the software-only businesses...It hammers IBM's revenue model. It does a number on Microsoft's revenue model."
One analyst partly agreed. Sun is "better able to handle it than some -- such as Microsoft," IDC analyst Matthew Eastwood said. "I'm not sure you could really say that's true for IBM and Hewlett-Packard."
Sun, which shunned Linux for years longer than its competitors, has contributed to several open-source software projects, one notable example being the OpenOffice.org rival to Microsoft Windows.
But Sun does have a large quantity of proprietary software as well, including its Solaris operating system and its Java Enterprise System server software. And the company emphasises that its long-term strategy is to gain by use of its own intellectual property.
Indeed, Sun software chief Jonathan Schwartz reaffirmed the company's commitment to Solaris in his speech. "We've been somewhat unfashionable of late by saying we're not going to throw away our operating system and run everything on Linux," he said.
Schwartz predicted that Solaris and its accompanying development tools will be increasingly interesting to developers writing software for "x86" servers, those based on chips such as Intel's Xeon or Advanced Micro Devices' Opteron.
Today, Solaris is not widely used, except on Sun's UltraSparc chip.
Linux and open-source software such as OpenOffice are carrying Sun to areas where Solaris had little interest, though. For example, Sun's Java Desktop System (JDS) for desktop and laptop computers is based on Linux, but Sun is working to make Solaris catch up there, as well.
Sun announced a deal in November in which 500,000 computer users in China will use JDS. Curtis Sasaki, vice president of desktop solutions at Sun, said in an interview that as many as 500,000 more JDS users are expected in a deal with the UK government.
About 100 companies are in pilot tests with JDS, Sasaki said.
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