Online Extra: Sun: It's Not "Linux or Nothing"

CEO Scott McNealy answers those who say the free OS threatens his Unix-based products: A vote for Linux is a vote for Unix

Sun Microsystems has a penguin problem. As Linux and its ever-present mascot, Tux the penguin, gains a foothold in corporate America, it appears to be doing so at the expense of businesses like Sun (SUNW ), which makes big computers running on the Unix operating system. Microsoft (MSFT ) execs may huff and puff about Linux' shortcomings, but the Unix outfits appear most imperiled by the free operating system. In fact, by 2006, more than 25% of new servers are expected to run on Linux, up from 13.7% in 2002, according to market researcher IDC. The Unix share is expected to drop from 14.6% in 2002 to 11.9% in 2006, according to IDC.

But Sun CEO Scott G. McNealy isn't backing down. In fact, McNealy says his company can embrace Linux while still selling its own Unix operating system, called Solaris. On Feb.18, McNealy, in an e-mail interview, responded to questions from BusinessWeek Correspondent Jim Kerstetter regarding Linux and Sun's tricky balancing act between supporting its proprietary software and getting on the open-source bandwagon.

Q: Are you concerned that Linux is eating into your rather enviable installed base, particularly on Wall Street?

A: I'm concerned anytime someone isn't buying Sun. But Linux and Solaris on [Intel's x86 computer chips] are expanding our installed base in the financial space. We look at our customer data, not anecdotal quotes in the press. Our sales to Wall Street continue to be robust -- just look at our recent win with Archipelago.

We're going to stay focused. We're not going to do what HP (HPQ ) or IBM (IBM ) are doing in abandoning Unix. Their strategy is confused and undermines customers' investments.

Q: Sun has been accused of having a bipolar reaction to Linux. On one hand, you have a definite Linux strategy. On the other hand, many in the Linux community think you're relegating Linux to the fringes of the network. Should they believe that?

A: We've donated millions and millions of lines of code to open source and are investing an even greater amount in establishing Linux on the desktop. So, that's just nonsense mixed with competitive rhetoric.

Let's flip that for a minute. Why is HP preventing Linux from expanding on the mainstream desktop? Why aren't they converting every user to an x86 Unix desktop suite like we're doing with Project Mad Hatter [Sun's Linux PC]? We know we've got more to do on the desktop and the server. But HP is breathing a little too much of their Linux exhaust. We're just not ready, like IBM for example, to abandon our Unix Solaris and declare that it's Linux or nothing.

We're going to double down on our 20-plus-year investment in our mission-critical Unix Solaris and continue to work on the things that matter -- security, reliability, scalability, mission-critical directories, messaging, application servers and identity.

Sure, we'll offer Linux where it makes sense as a choice, but we think that the right things for our customers is to keep our focus on taking cost and complexity out of the whole infrastructure that they built for network computing.

I saw a recent Gartner report that really said it well -- maybe it's not quite everything to everyone as it's been cracked up to be. That's fine. That's what we said all along. Meanwhile, IBM looks like this is the answer to all their multiple-operating-environments woes, and who cares if it turns out to be harder for the customer to implement than they said -- they'll send in IBM Global Services to fix it. But then when the majority of your revenue is now service-based, what would be your incentive to make your product offerings less complicated to use? None! Sure IBM loves Linux -- it guarantees their services revenues into the next decade!

Q: How should the open-source community view Sun's attitude toward Linux and other open-source initiatives, such as the Apache Web server, the JBoss application server, Open Office, and the MySQL database?

A: Simple -- judge us by our actions. We've been a consistent and major contributor as well as innovator to the cause of open source, and we'll continue to do that. I think we've contributed more to the open-source community than IBM or HP. I think people should view eight-million-plus lines of code as proof of that.

Q: How deeply does the Linux GPL, the license that requires any modifications to Linux be handed back to the open-source community, concern you?

A: The GPL family of licenses is great -- we use it for one of the most successful open-source projects, We believe in selecting the right license for the right kind of software project. There's room in the world for all licensing types depending on what it is you want to achieve.

Q: Does Linux change the way the computer industry should define the operating system?

A: Not really. The operating system is still the underlying plumbing on top of which you build the real value-add -- the applications and services to run your business. I think the interesting evolution is watching what else gets added to the operating system over time, while remaining integratable with other standards-based products.

Remember when you used to buy a spell-checker separate from the word-processing package and thought that was normal? Not anymore. Likewise, at the enterprise level, you're going to see more of the traditionally separate (and often complex to combine) middleware products fold into the operating environment, making it easier for customers to buy and run systems. Now that will change the way the industry defines an operating system. But unlike the welded-shut Windows operating system, we see the opportunity for an integrated, integratable, open, standards-based operating system of the future.

Q: In the short term, does Linux have a more significant impact on Unix companies or Microsoft? What about the long term?

A: Linux impacts everyone. As I said, IBM and HP are so impacted they're apparently abandoning their enterprise-class Unix in favor of Linux, marooning customers in the process. Abandoning that investment just seems shortsighted. We're actively redoubling our support of Solaris on Sparc [Sun's own computer chips] as well as Intel (INTC ) and AMD (AMD ).

It was just a few years ago that everyone said [Microsoft's Windows] NT would be the only OS left anywhere. So my answer based on that is: Clearly Microsoft has been impacted. As desktop alternatives like our Project Mad Hatter take hold, [Microsoft's] high prices, scary licensing subscription plans, virus-crashing software empire finally meets its match. The question there though is: How long? Linux is good news for Unix. A vote for Linux is a vote for Unix.

Q: How long do you believe it will be before Linux takes a significant share of the market for PCs?

A: Outside of North America it already has -- close to 3 million desktops worldwide, with enormous growth month after month. We believe it'll be Microsoft Windows and Office that'll bear the brunt of this shift.

We'll also let you know as our Mad Hatter project takes off. We've got significant interest from our customers, especially those running large-scale, heavily transactional sites such as help desks and call centers. They don't need the bells and whistles, but most of all they don't need the expense of a Windows desktop. Mad Hatter is aimed squarely at them. We plan to start shipping in the summer, so we'll let you know what the response is like.

Q: Are you tired of people asking you about Linux?

A: No. I'm tired of people not asking Microsoft, IBM, and HP some tougher questions about Linux! Like: Why are they [IBM and HP] abandoning 20 years of investment and marooning their customers? Linux is ultimately a conversation about Unix, and we like that. Bring it on! That plays to our strengths.

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