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Charles Babcock
Charles Babcock
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Schwartz Must Usher In Software Age At Sun

Call it founder's disease. Call it what you want. But Scott McNealy hindered Sun from becoming a successful software company. Now Jonathan Schwartz has got his work cut out for him.

Call it founder's disease. Call it what you want. But Scott McNealy hindered Sun from becoming a successful software company. Now Jonathan Schwartz has got his work cut out for him.Scott McNealy has stepped aside as CEO of Sun Microsystems, and thus passes another giant of the era in which founders ran their own technology companies. See my colleague Darrell Dunn's story "McNealy Steps Down As Sun CEO; Schwartz Steps Up" on our Web site.

IBM passed through this phase about two generations ago as the Watsons gave up the helm. Hewlett-Packard is still struggling down the path of finding its way after losing the founders' sanctioned successor, Lew Platt. Now it's Sun's turn. Jonathan Schwartz is going to have his work cut out for him, but he enjoys one asset that McNealy lacked. He has an instinct for where Sun's opportunities lie on the software side of the business.

He wouldn't call it such, but he implemented a "scorched earth" open-source approach that kept Sun's crown jewel, the Solaris operating system, in play. He made it open source before Linux could run like a prairie fire through Sun's Unix customer base. Solaris has attracted a vigorous developer community. Solaris is a high-end operating system. If programmers have Solaris to play with as open source, they'll be less likely to be consumed by Linux.

Then Schwartz phased in open-source versions of Sun's middleware.

How can Sun afford to do this? Isn't a slowdown in revenue the problem at Sun?

No, Sun needs to transition itself into a software company--in the midst of an open-source revolution and after a period where the founder and his many lieutenants thought of hardware first, software second.

Schwartz has chosen a disruptive move to get Sun's Java software in play. You don't lose revenue by open sourcing software that wasn't selling in the first place. Sun is now undercutting BEA Systems, IBM, and Oracle with its Java Enterprise System. JES may not be leading-edge, but it's solid and it's going to find its way into many enterprises. Sun needs to find ways to capitalize on that foot in the door, and to do so it will need more software assets.

It needs to more quickly follow the emerging standards of the Internet instead of assuming that, eventually through Java, it will create them. Ruby on Rails, Ajax, Dojo, and OpenRico are leading changes in Web applications, not Java.

Sun needs to keep innovating the way it did when it came up with Java. It's years behind where it should be as a software company. Sun under Scott McNealy is one of the few companies that could capture the spirit of the age in a new software language and not emerge as a leading supplier of Java software. Let's not forget that it did collect a $2 billion check from Microsoft to settle outstanding Java disputes, and that's payback of sorts. But it's not a software business strategy.

Call it founder's disease. Call it what you like. It was missed opportunity, and Schwartz must set about recouping the loss more decisively than he has been able to do to date.

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