Sun, Microsoft settle one, start another
- 18 February, 2001 22:00
The one just ended was the court fight begun three years ago when Sun alleged Microsoft had broken the terms of a Java licensing agreement. Microsoft handed over $US20 million as part of the settlement announced three weeks ago.
The new confrontation isn't taking place in the courts but has the makings of a marketing war. It's Microsoft's .Net platform, launched in the middle of last year, versus Sun's ONE strategy, detailed earlier this month.
When Sun's combative boss, Scott McNealy, was asked about .Net while visiting this part of the world last November, his response was "dot-what?”
“It's like they've suddenly discovered the internet," McNealy went on (which is what he's hard-wired to do at any mention of Microsoft). Certainly, it was easy to be suspicious when Microsoft took the wraps of .Net in June -- soon after being declared a monopoly by the courts -- that the move was designed to entwine the browser and operating system so tightly that no judge could ever prize them apart.
In the space of a few months, though, McNealy has gone from refusing to acknowledge that .Net amounted to anything, to helping validate it by pitching ONE against it. In typical McNealy style, as he announced ONE (it stands for Open Network Environment), he couldn't resist saying that his company has been "doing network services since the day we started". Having gone around for years saying "the network is the computer", there's some justification for that claim.
Is ONE just the counter-blow of a man obsessed with spoiling Microsoft’s party? Is it the miffed behaviour of one billionaire jealous that another has more billions – and makes greater margins -- than he does? If you look at the record of McNealy outbursts against the software company, there’s no doubting Microsoft is a big distraction for him. As recently as this month, McNealy told the National Press Club in Washington that he considered Microsoft was carrying on in a monopolistic manner which limited consumer choice.
He’s apparently also put his money where his mouth is. According to a just-published account of the US government’s anti-trust suit against Microsoft by former Economist writer John Heilemann (Pride Before the Fall, HarperCollins), Sun funded Project Sherman, a $US3m initiative which paid dozens of lawyers and antitrust experts to help persuade the feds to take Microsoft to court. With the case back in court at the end of this month, McNealy continues to give verbal -- if not financial -- support to the government.
"I believe anybody who sits down and rationally takes a good hard look at [the case] comes to the same conclusion that the judge came to. This is clearly anticompetitive behaviour that is bad for the consumer," McNealy told the press club. "This is not an emotional issue, this is not a political issue. It's not a financial issue. This is absolutely about putting competition and choice and innovation into, I think, one of the most critically enabling technologies." Inevitably, it’s also about competition between Sun and Microsoft.
According to US analysts, however, ONE, which pulls together a number of Sun software offerings, along with upgraded servers from iPlanet E-Commerce Solutions, isn’t just an anti-.Net strategy, but is also a response to web services being touted by IBM (Application Framework for e-Business), Hewlett-Packard (e-services) and Oracle (Dynamic Services Framework). And the analysts lend weight to McNealy's claim that web services are not a Microsoft invention, pointing out that the concept has been in development for as long as the past two years.
What does Sun say ONE will do? It is a Java-based architecture for creating, assembling and deploying web services, which Sun calls Smart Services. The architecture includes J2EE (Java 2 Enterprise Edition), EJBs (Enterprise JavaBeans) and the Forte for Java Tools. And Sun says it supports the de facto standards XML, SOAP (Simple Object Access Protocol), UDDI (universal description, discovery and integration), and WSDL (web services description language). None of which will translate into anything useful anytime soon, says at least one of those analysts.
Eventually, though, it should help Sun sell more software. And perhaps this is the crux of McNealy’s Microsoft envy: while his hardware company is a nice little earner, last year making $US1.5 billion at an 11% margin, Bill Gates’ outfit pocketed $US9.4 billion at a 40% margin. That’s enough to make anyone jealous.