Game over
McNealy’s on a roll with Linux, picking up free games at the expense of IBM, Microsoft, and Dell
SUN CHIEF SCOTT MCNEALY is having fun again. No, I don’t mean the Microsoft-bashing and golf-major jokes. “They sell newspapers for you guys,” McNealy laughs, but the real fun he’s having is with his shiny new Linux strategy.
Scott argues there’s nothing new about it: “We’ve been peeing in every corner of this opportunity.” But you have to admire the way Sun has walked into the Linux game and picked up the leash from IBM with a thanks for holding its place on line.
The timing couldn’t be better. When former CEO Ed Zander left, McNealy brought senior management into a room and said, “I tell you what, guys, my job didn’t change — yours did. Get on with it.”
In his LinuxWorld keynote and several press conferences last week, McNealy did little to conceal his delight with his new Zander-less team. “What do you think — are we off-base?” he asks Editor in Chief Michael Vizard and me after an interview (see “Sun shines over Linux” ).
“There was a little issue internally in terms of figuring out where we want to go,” Scott nods. “This team is making decisions.” Now he revs up: “I have such basic, clear philosophies around which we’re running this company that I don’t think it’s worn out at all. Open interfaces, participative not consensus. Agree and commit, or disagree and commit, or get the hell out of the way. Kick butt, have fun.”
“Let me say this diplomatically,” new software chief Jonathan Schwartz says about his boss. “He’s let a lot of wolves out of their cages.”
Schwartz replaced Pat Sueltz, who moved over to head the services division. McNealy laughs off rumors of discord. “It’s nice to see Jonathan and Pat work together because they’re joined at the hip. She told me she understands what his deal is; he understands what her deal is.”
Schwartz’s deal is to ride the Linux magic bus straight through IBM’s DB2 and WebSphere revenue, and take a slice out of Microsoft along the way. “We will go drive Linux like a wedge. We will go hollow out DB2 and WebSphere with either a free database or a free app server,” Schwartz recites. “We can give away the Apache Web server, Postgres, a free directory, a free messaging system, a free calendar and free portal, a free infrastructure. All of it for free for 100 users, and we can still make money. Microsoft can’t.”
Schwartz is on a roll. “So what happens to Dell now? Where are they going to go get [the software] from? They have to pay Oracle, they have to pay Red Hat, they have to pay somebody, so they are going to get squeezed.” And here’s Johnny with the punch line: “We can make life really hard for Microsoft by giving away the software. Dell has got to find that software from somewhere and, believe me, when they come to me and ask for it, it ain’t going to be free.”
McNealy laughs at the thought Dell can differentiate on the hardware. “It’s hard to shoot holes in that logic. It’s the same Asian suppliers laundering the same hardware through Intel to a set of vendors — and if you don’t think we’ve got good pricing, think about Intel’s motivation to try and come in and hollow us out.”
Vizard: “But what about Dell’s alleged magic assembly process?”
McNealy: “Assembly? We don’t do any assembly [laughs]. They have this robot that picks the sucker up and drops it in the box. That’s their secret. We can’t compete with that. We just can’t.”
Gillmor: “Game over.”
McNealy: “Yeah, game over. They got a robot. Our sales reps are just running from it.”
Software may just be a feature of hardware in Scott’s old turn of phrase, but Schwartz says he commands the lion’s share of the R&D budget. “We’re the single largest R&D line inside Sun. We spent more money on software than on any other element of R&D. Microprocessors, storage, disk arrays, I don’t care, software is No. 1.”
Scott won’t talk about Sun’s desktop strategy, but Schwartz can’t contain himself. “We’ve had 5 million downloads of StarOffice. We’re on 100 percent of the Linux distributions. And the Linux marketplace is growing on the client.” Sure, it’s doubling from two to four, I thought to myself.
“But my, isn’t it interesting that the largest single open-source activity is StarOffice, followed closely by Mozilla?” Schwartz arches an eyebrow. “Wouldn’t it be interesting if something interesting happened with Java, too?”
Open sourcing the Java desktop stack would certainly be a logical next step, and stitching together Jini and Jxta would present the Liberty Alliance with a HailStorm doppelg?1228?nger.
Schwartz has more pressing concerns. “What the Linux community needs to be aware of is that, to the extent that we have identified Microsoft as an enemy, Microsoft’s best friend right now is IBM. And if the two of them are going to go doing joint briefings [about Web service standards], then the two of them are going to go set the monopoly standards.”
Schwartz is sure to elaborate on this in his keynote at InfoWorld’s Next-Generation Web Services II conference Sept. 18 through Sept. 20 in Santa Clara, Calif. (As added points for reading this column, you’re entitled to a special discounted registration fee of $895 for the event. To get this price, go to and enter priority code XV73002 on the registration page.)
Surprisingly, McNealy is more sanguine. “We aren’t doing TCP/IP because we invented it. We just popularized it,” he says. Scott does take credit for NFS (Network File System), Java, XML, but not SOAP. “As long as they’re royalty-free, we’ll do it. It’s six of one, half-dozen of the other. Let’s just pick which side of the street to drive on.”
Game over.
