From the beginning, Sun intended Java to be primarily a loss leader for hardware. The more Java-enabled Web sites there were and the greater the number of programmers using Java for ecommerce software, the bigger the (perceived) need for Sun's high-end Web servers. The company made the decision not to sell Java by itself for fear of cutting into server sales.
For a while, this strategy worked fine. In the late '90s, Java helped sell untold Sparc servers - untold because Sun's not saying. But then Dell came along and cut Sun off at the knees with cheap servers running Linux software. IBM and BEA Systems, meanwhile, latched on to Java and sold it in the lucrative market for application server software, which helps link computers to backend databases over the Web. Today, those companies own a majority of the $3.9 billion annual business. "When Java hit, it was the greatest thing since canned beer," says John Rymer, a vice president at Giga Information Group. "Sun began with the upper hand, but it lacked a software strategy that was worth a damn."
With all the losses and job cuts, I wonder if the financial types at Sun have finally started asking hard questions about JavaSoft? Loss leaders are great - unless they aren't leading to anything. The fascinating thing to me is that Sun is starting to get the same rap that I had to fight back in the day at ParcPlace:
Will the new approach work? Hotels.com director of architecture Brad Schneider likes the pricing scheme for the Java Enterprise System, but his bosses are freaked out about buying from a company they think could go under any day now. "People talk about Sun like it might have the doors chained," he says.
Previous Topic
