Users cautiously optimistic about Sun/Microsoft accord

FRAMINGHAM (04/02/2004) - Users Friday were guarded but hopeful about Sun Microsystems Inc. CEO Scott McNealy's decision to settle his company's long-running legal battle with Microsoft Corp., ostensibly ending years of contention and ushering in a new era of cooperation to foster interoperability.

The announcement was a stunning turnabout for McNealy, who until very recently was prone to refer to Microsoft stingingly as a "convicted monopolist." McNealy, who initiated the talks with Microsoft CEO Steve Ballmer to end corporate hostilities, said in the end that he had heard from too many customers who told him pointedly to "cut the rhetoric, Scott, (and) go get interoperable."

But many users won't be ready to applaud until they know more about how Sun and Microsoft will improve integration of their server, database, directory, identity management and other products.

"It's good that there is going to be an era of cooperation, but what does it really mean to people?" said Satish Ajmani, CIO of the County of Santa Clara government in California. "What are they going to deliver that's different from what we have today, and will it result in an overall cost reduction for us?"

"That's potentially interesting news, and I would be borderline happy," said Daniel Morreale, CIO at the North Bronx Healthcare Network in New York. But first, he said, "I want to see something concrete and real happen."

If the announcement lives up to its claims, Morreale said, it might improve information-sharing between his Sun and Windows environments. "Long-term, it should make my life a little easier, and certainly my systems administrators' lives a little easier," he said.

Sun's decision to end the dispute with Microsoft is the latest in a series of moves the company has taken to broaden its reach beyond its Unix system. The company has strengthened its x86 low-end server line, embraced Linux and adopted the Opteron processor from Advanced Micro Devices Inc.

"When things aren't going well, you have to look for ways to make changes," said Tom Murphy, an analyst at Meta Group Inc. in Stamford, Conn.

And things certainly haven't been going well for Sun. The company Friday also said it would cut its workforce by 3,300 employees after reporting a net loss for the quarter ended March 28.

Microsoft is paying Sun US$700 million to resolve its antitrust issues and $900 million to settle patent disputes. For users, one cost savings may come from ending the dispute over Microsoft's use of the Java Virtual Machine. Microsoft had been planning to end support of its JVM in September as part of an earlier settlement, and users would have faced the cost of switching to Sun's JVM.

Under the agreement announced Friday, the companies will also share communications protocols, set Windows certifications for Sun servers and improve technical integration between Java and .Net.

For customers who found themselves in the middle of the Sun/Microsoft battle, the settlement and technical information-sharing agreements have the potential of making it "easier for organizations that have both Windows and Solaris to build cooperative computing solutions," said Dan Kusnetzky, an analyst at market research company IDC in Framingham, Mass.

George Weiss, an analyst at Gartner Inc. in Stamford, Conn., said the agreement may help Sun executives get past the view among some users that Solaris is "the central focus of all their major strategies."

"It's really the development environment that is crucial," said Weiss. "The users want the cheapest hardware."

Sun also announced that Jonathan Schwartz, who headed Sun's software business, had been promoted to president and chief operating officer. McNealy, who had held the president title, remains chairman and CEO.

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