Welcome!

Web 2.0 Authors: Lori MacVittie, Victoria Livschitz, Elizabeth White, Liz McMillan, Larry Dragich

Related Topics: Java

Java: Blog Post

Sun CEO Reviews Company's Prospects for 2009-10

The three forward-looking entries Jonathan Schwartz has produced so far in this series are miniature masterpieces

Sun's CEO Jonathan Schwartz has been reviewing Sun's three major strategic imperatives, and the company's progress going in to its next fiscal year. As industry blogs go, the three entries he's produced so far are miniature masterpieces. A fourth and last one is on its way.

The first in the series, titled "Understanding Sun in Three Easy Steps," kicks off with the bright and breezy intro:

"We're approaching the end of our fiscal year, and given all the swirl in the economy, I thought it worthwhile to restate where Sun's headed as a company, to let customers, partners, employees and investors see and understand where we're headed. Clarity's always useful, doubly so in times of uncertainty."

But it isn't long before Schwartz shows us how he's earned his reputation as one of the industry's most insightful bloggers, with a natural ear for a ringing phrase:

"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." [emphasis added]

In his second post. Schwartz gets down to his real message, namely Sun's strategic imperatives.

They are, in order, he says:

1. Technology Adoption
2. Commercial Innovation
3. Efficiently Connecting 1. and 2.

and it is in the course of his further explanation that perhaps the best passages in the three blogs published so far occur.

At one point, for example, he seeks to explain "positive option value." It strongly bears reproduction in full:

"Not to dip into finance 101, when the net present value of a lifetime revenue cycle exceeds the value of a one time purchase, a product or service that initiates the payment stream is either freely distributed (if it has no marginal cost, like software), or subsidized (if it has a hard cost). That's why you see so many free credit cards, free checking account, free mobile phones, free month's rent, free social networking, etc. In the technology world, free is the new black.


Free Markets

That's also why the internet's most valuable brands are *all* free - Amazon, Google, EBay, Skype, Yahoo!, Facebook, Hi5, MySpace, Baidu, TenCent, etc. Those brands reach more and have greater affinity than just about any other consumer brands. And in the technology marketplace, Linux, Java, MySQL, Firefox, Apache, Eclipse, NetBeans, OpenOffice.org, OpenSolaris, the same applies - free is a universal price, requires no currency translation, and reaches the longest tail of the market.

Now, could Amazon charge you to shop? Could your bank charge you to open an account? Google charge you to search? Could Sun charge people to download MySQL or OpenOffice.org? Sure, we could also destroy those brands in a matter of days. If you're not free, by definition you miss serving those that can't afford, or aren't ready to pay - which means your audience is capped, or destroyed if your competition is already free.

Microsoft's the only company I didn't include in the above list - and although I consider them a stupendously great brand, they're the only company that can really approximate free while making money on the distribution of their products. The fact is they're bundled on almost every PC across the planet, and appear "free" to the users who use those PC's - they've amassed immense power with their distribution, and few users believe they're paying for Windows when they buy a personal computer.

Thus, to developers (Sun's target market) with Windows PC's, Microsoft's product are, in effect, already free. (As an aside, notice Microsoft inexorably moving toward free distribution, too, to reach new users - at some point, you can't bundle every product on every computer, it'd be like printing a Sunday edition of the newspaper every day of the week).

This is exactly why we freely distribute our key software assets all over the world - 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. It's a free market, in every sense."

In his third blog entry, Schwartz nails Sun's business model even more succinctly:  "We offer utterly exceptional service, support and enterprise technologies to those that have more money than time," he notes. Adding, "It's a good business."

That concision follows an example that Schwartz cites to help once and for all explain how it is that free software and commercially supported software co-exist side by side. I will end by quoting it in full:

"When Free is Too Expensive
One of my favorite customer stories relates to an American company that did nearly 30% of its yearly revenue on Christmas Day. They were a mobile phone company, whose handsets appeared under Christmas trees, opened en masse and provisioned on the internet within about a 48 hour period. When we won the bid to supply their datacenter, their CIO gave me the purchase order on the condition I gave him my home phone number. He said, "If I have any issues on Christmas, I want you on the phone making sure every resource available is solving the problem." I happily provided it (and then made sure I had my direct staff's home numbers). Christmas came and went, no problems at all.

A year later, he was issuing a purchase order to Sun for several of our software products. To have a little fun with him (and the Sun sales rep), I told him before he passed me the purchase order that the products were all open source, freely available for download.

He looked at me, then at his rep, and said "What? Then why am I paying you a million dollars?" I responded, "You can absolutely run it for free. You just can't call me on Christmas day, you'll be on your own." He gave me the PO. At the scale he was running, the cost of downtime dwarfed the cost of the license and support. Numerically, most developers and technology users have more time than money. Most readers of this blog are happy to run unsupported software, and we are very happy to supply it. For a far smaller population, the price of downtime radically exceeds the price of a license or support - for some, the cost of downtime is measured in millions per minute. If you're tracking packages or fleets of aircraft, running an emergency response network or a trading floor, you almost always have more money than time."

Great blogging by Sun's CEO. Keep it coming!

More Stories By Jeremy Geelan

Jeremy Geelan is Chairman & CEO of the 21st Century Internet Group, Inc. and an Executive Academy Member of the International Academy of Digital Arts & Sciences. Formerly he was President & COO at Cloud Expo, Inc. and Conference Chair of the worldwide Cloud Expo series. He appears regularly at conferences and trade shows, speaking to technology audiences across six continents. You can follow him on twitter: @jg21.

Comments (0)

Share your thoughts on this story.

Add your comment
You must be signed in to add a comment. Sign-in | Register

In accordance with our Comment Policy, we encourage comments that are on topic, relevant and to-the-point. We will remove comments that include profanity, personal attacks, racial slurs, threats of violence, or other inappropriate material that violates our Terms and Conditions, and will block users who make repeated violations. We ask all readers to expect diversity of opinion and to treat one another with dignity and respect.


@ThingsExpo Stories
The Internet of Things will greatly expand the opportunities for data collection and new business models driven off of that data. In her session at @ThingsExpo, Esmeralda Swartz, CMO of MetraTech, discussed how for this to be effective you not only need to have infrastructure and operational models capable of utilizing this new phenomenon, but increasingly service providers will need to convince a skeptical public to participate. Get ready to show them the money!
The Internet of Things will put IT to its ultimate test by creating infinite new opportunities to digitize products and services, generate and analyze new data to improve customer satisfaction, and discover new ways to gain a competitive advantage across nearly every industry. In order to help corporate business units to capitalize on the rapidly evolving IoT opportunities, IT must stand up to a new set of challenges. In his session at @ThingsExpo, Jeff Kaplan, Managing Director of THINKstrategies, will examine why IT must finally fulfill its role in support of its SBUs or face a new round of...
One of the biggest challenges when developing connected devices is identifying user value and delivering it through successful user experiences. In his session at Internet of @ThingsExpo, Mike Kuniavsky, Principal Scientist, Innovation Services at PARC, described an IoT-specific approach to user experience design that combines approaches from interaction design, industrial design and service design to create experiences that go beyond simple connected gadgets to create lasting, multi-device experiences grounded in people's real needs and desires.
Enthusiasm for the Internet of Things has reached an all-time high. In 2013 alone, venture capitalists spent more than $1 billion dollars investing in the IoT space. With "smart" appliances and devices, IoT covers wearable smart devices, cloud services to hardware companies. Nest, a Google company, detects temperatures inside homes and automatically adjusts it by tracking its user's habit. These technologies are quickly developing and with it come challenges such as bridging infrastructure gaps, abiding by privacy concerns and making the concept a reality. These challenges can't be addressed w...
The Domain Name Service (DNS) is one of the most important components in networking infrastructure, enabling users and services to access applications by translating URLs (names) into IP addresses (numbers). Because every icon and URL and all embedded content on a website requires a DNS lookup loading complex sites necessitates hundreds of DNS queries. In addition, as more internet-enabled ‘Things' get connected, people will rely on DNS to name and find their fridges, toasters and toilets. According to a recent IDG Research Services Survey this rate of traffic will only grow. What's driving t...
Connected devices and the Internet of Things are getting significant momentum in 2014. In his session at Internet of @ThingsExpo, Jim Hunter, Chief Scientist & Technology Evangelist at Greenwave Systems, examined three key elements that together will drive mass adoption of the IoT before the end of 2015. The first element is the recent advent of robust open source protocols (like AllJoyn and WebRTC) that facilitate M2M communication. The second is broad availability of flexible, cost-effective storage designed to handle the massive surge in back-end data in a world where timely analytics is e...
Scott Jenson leads a project called The Physical Web within the Chrome team at Google. Project members are working to take the scalability and openness of the web and use it to talk to the exponentially exploding range of smart devices. Nearly every company today working on the IoT comes up with the same basic solution: use my server and you'll be fine. But if we really believe there will be trillions of these devices, that just can't scale. We need a system that is open a scalable and by using the URL as a basic building block, we open this up and get the same resilience that the web enjoys.
"Matrix is an ambitious open standard and implementation that's set up to break down the fragmentation problems that exist in IP messaging and VoIP communication," explained John Woolf, Technical Evangelist at Matrix, in this SYS-CON.tv interview at @ThingsExpo, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
We are reaching the end of the beginning with WebRTC, and real systems using this technology have begun to appear. One challenge that faces every WebRTC deployment (in some form or another) is identity management. For example, if you have an existing service – possibly built on a variety of different PaaS/SaaS offerings – and you want to add real-time communications you are faced with a challenge relating to user management, authentication, authorization, and validation. Service providers will want to use their existing identities, but these will have credentials already that are (hopefully) i...
How do APIs and IoT relate? The answer is not as simple as merely adding an API on top of a dumb device, but rather about understanding the architectural patterns for implementing an IoT fabric. There are typically two or three trends: Exposing the device to a management framework Exposing that management framework to a business centric logic Exposing that business layer and data to end users. This last trend is the IoT stack, which involves a new shift in the separation of what stuff happens, where data lives and where the interface lies. For instance, it's a mix of architectural styles ...
Cultural, regulatory, environmental, political and economic (CREPE) conditions over the past decade are creating cross-industry solution spaces that require processes and technologies from both the Internet of Things (IoT), and Data Management and Analytics (DMA). These solution spaces are evolving into Sensor Analytics Ecosystems (SAE) that represent significant new opportunities for organizations of all types. Public Utilities throughout the world, providing electricity, natural gas and water, are pursuing SmartGrid initiatives that represent one of the more mature examples of SAE. We have s...
P2P RTC will impact the landscape of communications, shifting from traditional telephony style communications models to OTT (Over-The-Top) cloud assisted & PaaS (Platform as a Service) communication services. The P2P shift will impact many areas of our lives, from mobile communication, human interactive web services, RTC and telephony infrastructure, user federation, security and privacy implications, business costs, and scalability. In his session at @ThingsExpo, Robin Raymond, Chief Architect at Hookflash, will walk through the shifting landscape of traditional telephone and voice services ...
The Internet of Things is tied together with a thin strand that is known as time. Coincidentally, at the core of nearly all data analytics is a timestamp. When working with time series data there are a few core principles that everyone should consider, especially across datasets where time is the common boundary. In his session at Internet of @ThingsExpo, Jim Scott, Director of Enterprise Strategy & Architecture at MapR Technologies, discussed single-value, geo-spatial, and log time series data. By focusing on enterprise applications and the data center, he will use OpenTSDB as an example t...
Explosive growth in connected devices. Enormous amounts of data for collection and analysis. Critical use of data for split-second decision making and actionable information. All three are factors in making the Internet of Things a reality. Yet, any one factor would have an IT organization pondering its infrastructure strategy. How should your organization enhance its IT framework to enable an Internet of Things implementation? In his session at Internet of @ThingsExpo, James Kirkland, Chief Architect for the Internet of Things and Intelligent Systems at Red Hat, described how to revolutioniz...
Bit6 today issued a challenge to the technology community implementing Web Real Time Communication (WebRTC). To leap beyond WebRTC’s significant limitations and fully leverage its underlying value to accelerate innovation, application developers need to consider the entire communications ecosystem.
The definition of IoT is not new, in fact it’s been around for over a decade. What has changed is the public's awareness that the technology we use on a daily basis has caught up on the vision of an always on, always connected world. If you look into the details of what comprises the IoT, you’ll see that it includes everything from cloud computing, Big Data analytics, “Things,” Web communication, applications, network, storage, etc. It is essentially including everything connected online from hardware to software, or as we like to say, it’s an Internet of many different things. The difference ...
Cloud Expo 2014 TV commercials will feature @ThingsExpo, which was launched in June, 2014 at New York City's Javits Center as the largest 'Internet of Things' event in the world.
SYS-CON Events announced today that Windstream, a leading provider of advanced network and cloud communications, has been named “Silver Sponsor” of SYS-CON's 16th International Cloud Expo®, which will take place on June 9–11, 2015, at the Javits Center in New York, NY. Windstream (Nasdaq: WIN), a FORTUNE 500 and S&P 500 company, is a leading provider of advanced network communications, including cloud computing and managed services, to businesses nationwide. The company also offers broadband, phone and digital TV services to consumers primarily in rural areas.
"There is a natural synchronization between the business models, the IoT is there to support ,” explained Brendan O'Brien, Co-founder and Chief Architect of Aria Systems, in this SYS-CON.tv interview at the 15th International Cloud Expo®, held Nov 4–6, 2014, at the Santa Clara Convention Center in Santa Clara, CA.
The major cloud platforms defy a simple, side-by-side analysis. Each of the major IaaS public-cloud platforms offers their own unique strengths and functionality. Options for on-site private cloud are diverse as well, and must be designed and deployed while taking existing legacy architecture and infrastructure into account. Then the reality is that most enterprises are embarking on a hybrid cloud strategy and programs. In this Power Panel at 15th Cloud Expo (http://www.CloudComputingExpo.com), moderated by Ashar Baig, Research Director, Cloud, at Gigaom Research, Nate Gordon, Director of T...