Business Tech

With a back-to-the-future technology called JavaFX to be launched Thursday, Sun Microsystems hopes to attract a new class of developer while building a much-needed new revenue source.

JavaFX 1.0 returns to the sales pitch that Sun used during Java's launch more than 13 years ago: a foundation for software on a wide variety of computing "clients" such as desktop computers or mobile phones. JavaFX builds on current Java technology but adds two major pieces.

Sun CEO Jonathan Schwartz

(Credit: Stephen Shankland/CNET Networks)

First is a new software foundation designed to run so-called rich Internet applications--network-enabled programs with lush user interfaces. Second is a new programming language called JavaFX Script that's intended to be easier to use than traditional Java.

But JavaFX faces some steep challenges. Chief among them: while Sun spent much of its energy adapting Java for servers, a host of other software options for building rich Internet applications sprang up. Java paved the way in 1995, but now it's got to take on Adobe Systems' Flash and AIR, Microsoft's newer arrival, Silverlight, and JavaScript and its more sophisticated cousin Ajax.

"This is the essence of the Hail Mary," said Illuminata analyst Jonathan Eunice. "I would like to think there's a role for Java on the client, but it's very late."

But Chief Executive Jonathan Schwartz, despite Sun's dropping revenue, low stock price, and large new layoff, believes that JavaFX will overcome its obstacles.

"Don't confuse relevance for stock price," he said, pointing to Java's widespread adoption among developers and students, and to Sun's expansion into newer open-source areas such as the MySQL database software. "We're more relevant today than any other software developer on the face of the Earth."

And while JavaFX may not be widely discussed today as a rich Internet application foundation, "I promise you that will change in the next 60 to 90 days," Schwartz said.

Java's stronghold
With help from allies such as IBM, Sun built Java into a powerful technology for server software tasks such as running stock-trading applications. And it gained a stronghold on millions of mobile phones.

But it missed out on desktop computers, where it was notoriously slow to load, and lost out chiefly to JavaScript built into the browser and to Adobe's Flash plug-in. On mobile phones, Java has suffered from a sprawling set of optional features that undermine its "write once, run anywhere" promise to developers. Different phones essentially have different varieties of Java.

JavaFX is designed to address both of those issues. First, a more unified "runtime" foundation spans PCs and mobile phones, though the latter version isn't expected until the first half of 2009. And this time, Sun supplies it in an unmodified form so phone manufacturers won't splinter it into incompatible versions.

Sun is promoting JavaFX as a good way to write rich Internet applications. (Click to enlarge.)

(Credit: Sun Microsystems)

"We're making our binaries available" to mobile-phone makers "so we can unify the Java platform implementations," said Schwartz, who expects rapid adoption. "We're starting with a couple billion handsets in the marketplace and swimming downstream."

The business case
Sun also will charge those handset makers a per-unit royalty for JavaFX, and right now, Sun needs all the revenue it can get. Although Java has been good for Sun's brand, it hasn't been a cash cow, but here again, Schwartz has high expectations.

"Java has become the single most profitable software product at Sun, growing more rapidly than any other," he said, pointing to billings (PDF) that Sun charged customers in the company's most recent quarter.

In raw revenue, though, its 18 percent growth to $34 million lagged that of MySQL, for which billings grew 50 percent annually to $37 million. And Sun's hardware revenue still is an order of magnitude larger than its software revenue.

Schwartz also believes that JavaFX has more appeal to content providers because it comes from a neutral technology supplier, not a potential rival.

"The problem with browsers, when viewed as the default mechanism for delivering content for the Web, is that browsers have become hostile territory," Schwartz argued. "Internet Explorer is owned by Microsoft. Firefox is owned by Google, at this point. Chrome is owned by Google. Beyond that, with maybe (the exception) of Safari, which is owned by Apple, there is no safe route to distribute your content into the marketplace."

Perhaps JavaFX's open-source nature reduces the threat that Sun could hold a business partner hostage. But when it comes to safety, there also are risks to betting on new technology.

Distributing JavaFX is another challenge. The auto-update feature in desktop Java will take care of PCs, starting next year--though people will be able to actively download it sooner in coming days--but for mobile phones, Sun relies on handset makers and electronics companies such as TV makers to build it in.

EZ coding
JavaFX is designed to be easier to use too. The JavaFX Script origins lie in a project originally called F3, short for the "form follows function" slogan from the Bauhaus school of architectural thought.

"You can use Java to solve difficult problems," but doing so often requires sophisticated programming, said Eric Klein, Sun's vice president of Java marketing. And regular Java isn't well-adapted to creating basic, media-rich applications that run in browsers. Building a simple media player application in Java takes 100 lines of code, but JavaFX Script can do it in 20 or 30 lines, he said.

"The goal was to make (the) power of Java accessible to an entirely new class of developers," Klein said. "For existing developers, it would accelerate how fast they could get things done."

JavaFX also comes with a slick feature, the ability to move running applications out of the browser and onto the desktop--and back, if desired. Essentially, they can change their nature and abilities according to where they're housed. And the same application also can run on JavaFX Mobile, holding the promise for programmers that they won't have to endlessly rewrite the same applications for different media.

"You can build a media player, run it in a browser, then you can simply drag it out of your browser onto your desktop, and it becomes a desktop application automatically. It's the same code, the same application," said Jeet Kaul, Sun's senior vice president of Java engineering.

Moving to the desktop, the application could take advantage of new screen real estate that affords a better user interface and new permissions for tasks such as writing files to a hard drive, Kaul said.

Again, though, incumbent players have an edge. JavaScript has matured as an interface language, Flash has many loyal developer fans, and Silverlight is powerful, Eunice said.

"I'm invariably skeptical that a language you don't know yet is going to be easier than all the languages you do know," Eunice said. And unlike with earlier chapters of the Java saga, "Sun has to do all this heavy lifting on its own."

Sun Microsystems is a pioneering tech company that is having trouble getting any respect.

A Forbes article on Thursday notes that the company's market cap has dropped below $3 billion: "The company has become so toxic that no one dares to swallow it."

As Sun CEO Jonathan Schwartz likes to say, the Forbes writers "over-rotate." But Sun has fallen further and harder on Wall Street than its main competitors over the last few years and months. Schwartz has bravely pushed Sun down the path of open source and created demand for its hardware and service via free software, but the big payoff has been slow in materializing. Add in the crumbling economy, and Sun has no choice but to take cost out of its business model.

From a stock market perspective, Sun has fallen further than its competitors.

(Credit: Yahoo)

This morning, Sun revealed that it is taking the headcount reduction route to profitability, letting go of 15 percent to 18 percent (up to 6,000 employees) of its global workforce and taking a charge of $500 million to $600 million over the next year. The headcount reduction will reduce annual expenses by $700 million to $800 million.

The economic reality is that 2009 isn't going to be a good year for the tech industry. Sun is facing reality with the cuts. Other tech companies will follow with headcount reductions too. This week, IDC cut its 2009 growth rate for spending on tech by enterprise companies worldwide from 5.9 percent to 2.6 percent. The U.S. growth rate for next year was revised from 4.2 percent to 0.9 percent.

Sun CEO Jonathan Schwartz

(Credit: Dan Farber/CNET News)

In the Forbes article, various analysts who cover Sun suggest ways, in addition to headcount reduction, that the company could become more profitable. Among the suggestions: selling the Sparc microprocessor business to Fujitsu, spinning out the Java language group, dropping the low-end hardware business, and selling more customized servers to cloud computing providers.

In an e-mail response Thursday night to my query about the Forbes article--and just hours prior to announcing the layoffs--Schwartz gave his take on the substance of the Forbes piece:

Various analysts have told me our revenue was $299 million last quarter (it was $2.9 billion), that we should lay off 50,000 employees (that would be more than 100% of our employees), that no "real" companies use open source (I guess Google and GE don't count), that we're losing customers in droves (we gained customers last quarter), that we're losing cash (we generated more than $150m last quarter), that Niagara/SPARC is a niche (it was a billion dollar a year business, growing 80% last quarter), that we're losing share on x86 (our biggest competitor was down 18% last quarter, but we grew more than 4%), and that we lost $1.7 billion in cash last quarter (no - we impaired a goodwill asset, just like CNET's parent company, CBS, wrote down $14 billion - it's an accounting change).

So, I'm a tad skeptical of folks looking for sensational column inches... we're very comfortable we're on the right path. We had more than 1,000 requests for our new ZFS-based Storage platforms just a day after launch. And we're deluged with requests from big customers wanting to talk about open source adoption as a vehicle to reduce proprietary licensing fees.

But with even larger companies pre-announcing 15% revenue declines, it's evident the whole industry's got some challenges. I understand everyone's worried, but sensationalism belongs on grocery store checkout counters, not in the business press.

Schwartz is waiting for the world to change, to move to more of a cloud computing model where Sun can power millions of data centers with its hardware, software, and services. This model requires that Sun get more than a fair share of the market compared with competitors like IBM, Hewlett-Packard, Dell and eventually Google. Open-source, free software is Sun's disruptive element. Schwartz maintains that free software brings the marginal cost to acquire a customer to zero and helps drive revenue.

"The majority is going to buy hardware (to run the free software), and not just from Sun," Schwartz said earlier this year.

If Sun cannot intercept enough of the enormous demand for its hardware and services in the coming cloud era, no amount of headcount reduction will earn Sun the respect it craves.