The Open Road

There are many reasons to love open-source software, but Sun Microsystems CEO Jonathan Schwartz thinks that one of its biggest benefits is free advertising. As Schwartz suggests, developers don't spend money. They spend time. That time spent with your technology, then, equates to free advertising, which advertising can presumably be be leveraged deeper into a developers' organization:

Sun CEO Jonathan Schwartz

(Credit: Stephen Shankland/CNET)

[W]e freely distribute our key software assets all over the world [because] if we didn't...users and developers might pick someone else's free product (or simply use the one they assume to be free). And if they picked someone else's product on which to build their business or their application, Sun becomes a reseller - which isn't our mission or business model....

By being freely distributed, our products build their own audiences. And using the products, from Glassfish to ZFS or NetBeans, creates a branding experience (and a wildly positive one, if we're doing our jobs well). So why don't we advertise in traditional outlets? Well, every day, the number of people using our products, getting that positive branding experience, eclipses nearly all major newspapers globally, combined.

This makes Sun's $1 billion acquisition of widely distributed MySQL more understandable, but only if Sun has a way to turn all that "free advertising" into "paid adoption." So far, however, it, and every other open-source company, continues to tinker with the right model for turning downloads into dollars. Schwartz plans to address this topic in an imminent blog entry, but the real question will be whether he can do so in the market.

I think, however, that his reasoning is correct. Incumbent vendors have an interest in reaping the harvest from existing customers. Everyone else, however, has an interest in sowing new opportunities. Given that most vendors, most of the time, need new customers, open source offers a highly efficient way of "advertising" to them, to use Schwartz's nomenclature.

The real question, then, is how to turn this advertising into sales. But that's fodder for another post, both for me and for Schwartz.

Follow me on Twitter at mjasay.

Sun CEO Jonathan Schwartz has posted the first in a series of video blog entries. The message? We're on track here at Sun, and looking forward to a solid future.

I'm neither worried about the role information technology will play in the economy, nor am I worried about the relevance of Sun's offerings. I'm not worried about the future, I'm focused on its arrival date.

This, however, is a big cause for alarm, as ZDNet's Larry Dignan points out:

The revenue gap from morphing Sun, the mostly hardware company today, into Sun, the Red Hat of tomorrow, is about $11.4 billion in annual revenue....Simply put, Schwartz is likely to have a wrenching change ahead as Sun wrestles with its mature business and grows its new ones. It's great that Schwartz isn't worried, but I don't buy it.

I agree, and have suggested before that while Sun's open-source business is growing, it may not grow fast enough to recoup losses in Sun's traditional businesses like hardware. I continue to believe that Schwartz is doing the right things to rejuvenate its brand and jump start its growth, but it may prove to be too little, too late.

Novell, for its part, has the same problem. Even while its Linux business continues to grow, Novell's traditional businesses continue to decline.

So, what should Sun (or Novell, for that matter) do? Given that there is no short-term panacea for long-term decline, I'm not sure that it can do other than what it already is doing. Well, except to divest itself of languishing business units that may perform better elsewhere, like carving out its hardware business to focus on software.

Barring major surgery like this, will Sun run out of time?

I expect Schwartz will talk about this in his Open Source Business Conference keynote later this month. Let's hope he has answers.

Follow me on Twitter at mjasay.

I don't have any scientific proof of this, but it strikes me that open-source CEOs are different. Not just because some sport ponytails (Sun CEO Jonathan Schwartz), or some speak with a light Southern drawl (Red Hat CEO Jim Whitehurst), or even that some swear in Italian (Funambol CEO Fabrizio Capobianco).

No, what really makes them different, at least as compared to their enterprise software counterparts, is their cutting-edge adoption of technology.

In this they're no different (and probably a bit behind) the Web 2.0 crowd, but compared to an HP, IBM, or SAP CEO, the CEOs of open-source companies set new standards for connectedness and communication transparency. Perhaps it's the relative youth of open-source CEOs, but perhaps it's also a love of technology that stems from having to live so close to source code in an open-source company.

I first thought of this when I received notice that Whitehurst is following me on Twitter. I can't imagine Steve Ballmer following anyone on Twitter. Then I thought to how actively Schwartz blogs, providing useful information on Sun and its place in the larger enterprise computing ecosystem.

It also reminded me that I get text messages as often as emails from Whitehurst, and the same used to be true of Marten Mickos, former CEO of MySQL, as well as others (except Capobianco at Funambol, because his company does email sync, so he's not a big SMS user :-).

Enterprises should take note. I think company leadership has a material impact on the kind of technology that gets created within a technology vendor. If your vendor's CEO is stuck in the Stone Ages of technology, perhaps its products are, too?

This can only be taken so far, of course, but I wonder if there's something to it....

I was in Boston last week meeting customers. One of them, a senior IT executive at a large financial services company, asked me about Sun. "Matt, I know you're into open source. I'm a long-time Sun customer. Do you think Sun's open-source strategy will work? Should I be worried about my Sun investment?"

Long pause.

I then proceeded to explain open source's role in rejuvenating Novell's fortunes, but that it took several years. It also helped that Novell wasn't dealing with as big a gap as Sun has between existing (but declining) proprietary revenue and new (and increasing) open-source revenue.

In other words, I equivocated. The question for me is not whether Sun's new strategy is "Right," but whether Sun will have time to prove it out.

Sun clearly has a tough slog ahead of it, as Techcrunch points out. But I find it hard to read Sun CEO Jonathan Schwartz's review of Sun's terrible Q1 without feeling some cause for optimism:

The biggest highlights were the performance of our Solaris based, chip multi-threading (CMT) systems, which again grew a whopping 80%, year over year....Simultaneously, our Open Storage systems also delivered a great quarter, up 150+% year over year. These systems, known by many as Thumpers, are amplified by the awareness of our open source ZFS file system, a technology at the heart of Sun's storage business....

... Read more

I was supposed to attend the recent DLA Piper Technology Leaders Summit, but was unable to do so due to work and family commitments. Perhaps I should take heart, however, as after reading through JasperSoft CEO Brian Gentile's commentary on the day, I may not have liked what I heard.

Gentile doesn't suggest that the summit was poorly organized or that the speakers didn't have the right pedigrees, but rather that the summit apparently broke little or no new ground. I don't fault the conference organizers for this: I fault the chosen participants, who don't get paid to innovate.

Take Ray Ozzie, for example. Microsoft's job is simple: extend its desktop dominance for as long and as profitably as it can. That's it. Anything the company says about the Web or something disruptive invariably must tie it to its existing cash cows, Windows and Office.

It's little wonder, then, that Microsoft's biggest "innovation" of the past few years is not the Surface, but is rather a content-management system called SharePoint that (gasp!) lets users connect Office documents through Windows Server(s). Microsoft has made well over $1 billion from this invention, and will undoubtedly mint billions more. No, Microsoft has nothing new to tell us.

What about the cloud vendors? This group basically consists of next-generation Microsofts that hope to do what Microsoft did, except instead of distributing packaged software they hope to centrally manage software so that customers will have even less choice than under the Microsoft regime.

Where can I buy some of that?

Where was open source in this discussion and throughout the summit? Open source, which enables the cloud and promises to topple the monopolies of yore while unwittingly enabling the monopolies of the future?

Apparently it was largely ignored until Jonathan Schwartz, CEO of Sun, took the podium. Of Schwartz's presentation Gentile writes:

Engadget has an interesting interview with Sun's CEO, Jonathan Schwartz. Schwartz spends a lot of time talking about mobile, but also has this commentary on the importance of open-source software for network access...and Sun:

Unlike Microsoft and others, we actually view the success of the free software as a good thing, we are enormously pro-GPL, enormously pro free software, enormously pro the Mozilla license, the BSD license. Our view, is that we want to be known as the world's largest contributor and commercial supporter of free and open source software...because it enables the democratization of the network -- that creates more opportunity for us....I think its going to be an intersection of price and user experience that defines success.

Yes, but Larry Dignan pokes holes in whether that price/user experience equation will be enough to push Sun's business forward. I want to believe that it can, but it's true that Sun has a massive mountain to climb to make free software pay dividends.

Sun is almost unarguably the world's largest contributor to open-source software. Now it's time to see if that investment can be made to pay.

Businessweek has a great article on Jonathan Schwartz and his efforts to rebuild Sun in an open-source software mold. Sun is on a rebound, but it's tough to tell if its gains are temporary or are laying the groundwork for a long-term revival.

I get to talk with the company fairly often, and think it's the latter (Jonathan tells me, for example, that Sun's software revenue has been up 13% since it started giving it away). But it's a difficult thing to rebuild a faded brand (just ask IBM, Novell, or any other company that has gone from "Hot" to "Not" to relevant again). Sun is doing better in this, as the article suggests:

Where Schwartz and his critics agree is that Sun's comeback requires more software developers and corporations to adopt Solaris. That boosts the odds that companies will buy machines that run it--servers account for 46% of Sun revenues--or at least Solaris support contracts to get upgrades, phone help, and the like.

For the first time in years, there does seem to be some movement. ... Read more

Jonathan Schwartz

(Credit: Sun Microsystems)

Jonathan Schwartz is a man on a mission. While at Linuxworld today, I took an hour to visit with Jonathan Schwartz, CEO of Sun Microsystems. After spending an hour prodding Jonathan with questions about Sun's history and future with open source, I was left with one clear impression:

Sun is rising, and open source is the driver behind its rebirth.

Jonathan is an executive who sincerely believes in open source as a fundamental business-model advantage, and not as a cheap complement to throw to the community in order to drive sales of "the real value." It's not a marketing gimmick with him. It's a strategy for winning. Jonathan, despite wearing a tie when we met, clearly understands the importance of community before commercial. Or, rather, he understands that community leads to commercial success.

As he stressed, the open-source battle is not between Red Hat and Sun. They are allies. Red Hat and Sun both want open source to succeed, and both want this phenomenon that started at the edge of the network to define the entire computing landscape.

And so I asked,