Posts Tagged ‘Sun Microsystems’

Google: A Healthy Respect Towards Microsoft

July 10, 2009

The latest news out of Sun Valley, reported by the Wall Street journal’s Julia Angwin, is that Google CEO Eric Schmidt was cool to the idea of building its Chrome Web browser. Schmidt, a veteran of several wars with Microsoft, resisted the project for six years before a demo of the browser changed his mind.

This minor revelation says a lot about Google, I believe, and reflects a new more healthy attitude towards Microsoft–and perhaps a sign of maturity for Silicon Valley. Ever since Microsoft took over the market for PC operating systems and business software, Silicon Valley companies have generally assumed one of two positions towards Microsoft: abject fear (as evidenced by any startup) or loathsome obsession with taking it down (best embodied by Sun Microsystems’s former CEO Scott McNealy).

Schmidt’s position on Chrome reflects a new attitude toward the Redmond giant that I would characterize as healthy respect. Schmidt did not want to rush into a fight with Microsoft over the browser because he knew, having lost many battles with Microsoft as an executive at Sun and Novell, that it was an unwise and potentially distracting move for the company.

“At the time, Google was a small company,” Mr. Schmidt said. “Having come through the bruising browser wars, I didn’t want to do that again.”

Since then, Google has gotten much much bigger and much more powerful. The Chrome project, both the browser and the operating system, has evolved to a point where it was good enough to fight for consumer’s attention in the marketplace. And Microsoft, though it remains arguably the most powerful tech company in terms of its financial heft, is no longer the pole star around which the entire technology universe revolves.

Even so, Schmidt is still wide enough to not pull a McNealy and stick a finger in Microsoft’s eye, antagonizing the giant and attracting more attention from regulators poking around its business. Schmidt and Google cofounder Page, says Angwin, were careful not to position Chrome as a competitor to Microsoft Windows. They argued that Chrome will expand the market for netbooks, rather than eating into Windows’ share of the netbook market.

I doubt they really believe that. But it’s a much smarter move to play down expectations of this effort.

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Can Oracle Make a Success of Sun?

April 21, 2009

I don’t know about you but I was pretty surprised when Oracle announced its intention to buy Sun Microsystems. It’s not just the thought that Sun’s business has been suffering from a slow and steady decline. It’s also the fact that Oracle has NEVER been in the hardware business. It’s a fairly radical move for a stand-alone software company to make a big bet on hardware. Most tech companies are moving in the opposite direction, dumping hardware assets and bulking up in software and services, a la IBM and Hewlett Packard.

But the more I think about it, the more this deal could actually make sense. For one, Sun is a software company, and many of its most valuable assets are in software. Namely, the Java programming language and the Solaris operating system. Moreover, by buying Sun, Oracle scoops up the number one rival in its core database business–open source database provider MySQL. This shrewd counter-attack alone may justify the price of the deal. Lastly, with Java under its wing, Oracle gets more leverage over IBM, which over the years has made a big investment in Java to counter Microsoft, and can offer more integrated technology solutions to its customers.

Still, Oracle has to overcome three main challenges to make this deal a success, as my colleague Aaron Ricadela noted in his story today. One, Oracle has got to find a way to wring more money out of Java without alienating its customer base. Two, Oracle needs to prove it can run a hardware business. Three, it has to do some pretty nifty financial engineering, including a massive layoff of more than 10,000 people, to make the numbers work over the long term.

As one top tech CEO told us recently, Sun will be an accretive deal for the first 18 to 24 months, thanks to the cost cuts that can be made. But the real challenge will come after when those gains run out, and the server business continues to decline.

Did Steve Jobs Miss the Bullseye at Macworld?

January 19, 2008

BusinessWeek technology reporters Heather Green, Arik Hesseldahl, Catherine Holahan and Spencer Ante discuss Macworld, whether the tech sector is headed for a downturn, and the billion-dollar-plus buys of MySQL and BEA in this week’s broadcast of the Digital Dish.

My colleague Arik is bullish on the future prospects of Apple’s new online movie rental service. But I am less optimistic. Apple TV will get better and do better but it’s not a groundbreaking product like iTunes/iPod or the iPhone. Jobs can’t ride into the local square and save the day because there are already a few sheriffs in town. Netflix is the dominant player in online movie rentals and they are offering a download service for FREE with 6,000 movies and TV shows right now. Interestingly, the top five most-watched shows are all TV programs, according to the list on the NetFlix Web site on January 19: Heroes, The Office and 30 Rock.

As for Macworld, the maestro Jobs turned in a middling performance. He was due for one, no doubt. That’s the nature of creativity. Every film Martin Scorses makes can’t be a masterpiece like Raging Bull or Taxi Driver. Every once in a while you’re going to have a Casino or a Bringing Out the Dead. Macworld 2008 was the Casino of Steve Jobs career.