Microsoft and Sun redrew the battle lines in the computing world last week, with news of a 10-year pact designed to better integrate the leading proprietary Unix and Windows platforms and unifying the rivals against a common enemy--IBM and Linux.
During a brief press conference, Microsoft CEO Steve Ballmer and Sun CEO Scott McNealy--megarivals whose companies have battled fiercely in the operating system market for more than 20 years--pledged to make their platforms and respective development tools interoperate.
The wide-ranging pact calls for seamless interoperability between Windows and Solaris Unix operating systems and Java and .Net development platforms. It also ends Sun's aggressive antitrust litigation against Microsoft and transfers US$1.6 billion of the US$55 billion in Microsoft's war chest to Sun, which has seen its profit margins battered by the growth of Linux on Intel servers.
The two executives alluded to the creation of a framework for the technology collaboration, including joint efforts on Sun's Opteron server plan, but few specifics. Microsoft chairman and chief software architect Bill Gates and Sun CTO Greg Papadopoulos are hammering out the details of the technology-sharing pact, both companies said.
The complex deal began in earnest roughly a year ago after Ballmer and McNealy, two Detroit natives, high school and college buddies as well as business archrivals, met for a golf game. It was presented simply as a truce instigated by customer demand for interoperability and less rhetoric, but many saw the historic pact as a resounding battle cry against Linux.
During the conference last week, neither CEO mentioned open source or Linux specifically as motivating factors. But their continual emphasis on intellectual property (IP) and patent rights--fighting words to those who back Linux and the open source movement--signaled the formation of a proprietary software army.
"It's a 10-year cooperation to make interoperability unique and exceptional in a way that will advantage Microsoft and Sun customers in a special way," said McNealy, noting that corporate customers told the two vendors to stop making noise about interoperability and do something--or else. "Maybe we've grown up. Maybe they've grown up, or maybe the customer is in charge. This [deal will offer] a higher level of interoperability and compatibility while respecting each [other's] IP."
Ballmer acknowledged that it took the two vendors more than a year to rebuild trust after decades of battling in public and in the courtroom but that they were united in their common interest in protecting IP rights and patents in a new era of software development.
"It's all about helping customers who own our stuff and who will continue buying stuff. It's an agreement that comes from two companies that believe in IP, develop IP and respect IP, and we needed a framework for our collaboration that respected our mutual IP ... we do both value IP. How to interoperate without giving away the crown jewels, so to speak," Ballmer said.
Patrick Derosier, co-owner and CTO of CPUGuys in the US said the deal is clearly a "shot across the bow to Linux."
"Linux is not as attractive as it was yesterday," said Derosier. "The collaboration between these two companies nullifies Linux's advantage in the server market. This means Java is going to be a higher-end product. It takes away any objections to Java. One of the main problems with Java was that it conflicted with XP and every other operating system that Microsoft ever made. There were always serious patches and security flaws."
Derosier said it also means "higher-quality products" from both Sun and Microsoft. "Getting the software from these two companies to work together has always been a big problem for VARs," he said. "If these two companies ever combined on a server, Linux would be done."
Novell and IBM said they would not comment. Linux software leader Red Hat issued a statement Friday, saying, "The alliance validates open source as an alternative."
Several analysts said the deal will help Microsoft and Sun battle IBM and Linux, but claim market forces drove the deal.
McNealy has been under pressure to return Sun to profitability for some time, and many viewed his single-minded disdain for Microsoft as a personal crusade that clouded his judgment to make savvy business decisions.
Sun's reconciliation with Microsoft and the promotion of former Software executive vice president Jonathan Schwartz to president and COO signals a sea change at Sun that could pave the way for growth.
"Microsoft wants to get the EU off its back, the Sun board wants McNealy to stop obsessing about Microsoft and start addressing the needs of Sun's customers, and Java/.Net integration and interoperability is at the crux of customer needs," said Anne Thomas Manes, vice president and research director of application platform strategies at the Burton Group.
Still, it's unclear how the 10-year technology-sharing pact will impact Sun's own support for Linux on the desktop and server. Sun currently sponsors a number of open-source projects, including NetBeans.org, OpenOffice.org, JXTA.org and SunSource.net. Sun has also invested heavily in the Linux platform, including desktop technology (Gnome, KDE, Java Desktop), application suites (StarOffice and OpenOffice) and platform infrastructure (Java Enterprise System, Java runtimes, application servers), but it hasn't really embraced Linux from the hardware system perspective, Manes said.
Despite all those efforts, Sun is viewed as being highly ambivalent about Linux and somewhat late to the party with its full support.
Solution providers in the Windows, Unix and Linux markets had widely varying views on how the pact will shape the computing and channel landscape.
In a meeting with reporters late last week, McNealy and Ballmer said the pact was a big win for partners.
"There will probably be a lot more channel partners doing both Microsoft and Sun because of this," said McNealy.
"It's the channel partners who want us to be able to take complexity out of solutions so they can focus more on value-added solutions," said Ballmer.
One solution provider said Sun is making a big mistake, and that no pact will slow the spread of Linux.
One open-source solution provider said Microsoft and Sun are merely banding together to stop their respective financial and legal nightmares.
"I doubt it [will] hurt Linux," said Chris Maresca, a principal at Olliance Consulting Group. "Sun has just started selling Linux PCs at Wal-Mart, so they seem pretty committed to Linux."
Other solution providers said the deal is good for channel business.
"VARs and users are the big winners," said Frank Basanta, director of technology at Systems Solutions, a US-based systems integrator. "A long-standing feud between two of the major players in the technology industry is over. This will mean better integration and collaboration of the two different product sets and gives the VARs a much deeper ability to work with both products and not fear any kind of reprisal from either one of vendors. This brings us closer to a true heterogenous computing environment."
Linus Torvalds, the leader of the open-source movement who invented and trademarked the Linux operating system, said he is no business expert but he viewed the deal as two hurting vendors licking each other's wounds, more than a battle cry against Linux.
"Sun is probably very tired of that 'everything we do is to screw Microsoft over' approach to technology and marketing, which clearly has never worked," said Torvalds. "If you want customers, you should show yourself to love your customers, not hate your enemies."
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