Skepticism over Sun, AOL partnership
How will Sun and Netscape deal with competing application server and e-mail products?
By Jim Kerstetter, PC Week
April 1, 1999 9:53 AM PT
NEW YORK -- Sun Microsystems Inc. and America Online Inc. may have started explaining how their partnership will operateTuesday via the new Sun-Netscape Alliance.
But analysts say they are a long way away from being satisfied with the companies' explanations about how they will work together and, in particular, how they will deal with competing application server and e-mail products.
"We asked a lot of questions when they first announced the deal and they said they couldn't answer them for legal reasons," said David Smith, an analyst at the Gartner Group, in Stamford, Conn. "Now the deal's closed, and they still won't answer the questions. And they won't tell you when they will answer the questions."
The Sun-Netscape Alliance, as it is being called until executives come up with a better name, will operate as an independent company, with its own executives, sales force, developers and products. Revenues, profits and expenses will be funneled back to AOL (NYSE:AOL)and Sun (Nasdaq:SUNW)under a complicated profit-sharing scheme.
All of Netscape's enterprise products, including groupware, e-commerce servers, Web servers and the Netscape Application Server will find a new home in the alliance. The sticking points are the NAS, which has a direct competitor in Sun's Net.Dynamics server, and Netscape's Messaging Server, which competes with Sun's Internet Mail Server.
Alliance executives said the Alliance Messaging Server 5.0, a combination of the two e-mail servers, will ship in the first quarter of next year. The Alliance Application Server 6.0 will also ship early next year.
Questions mount
But the alliance will first have to overcome intense skepticism concerning its ability to deliver on its promises, whether that's integrating product lines or simply attacking the market with the finesse of a smart software company.
Much of the skepticism is due to Sun's spotty track record as a software vendor and a growing concern in the analyst community that Sun is avoiding making tough product decisions. They wonder if Sun would be better off deciding on one application server and sticking with it, rather than enduring a painful process of combining two very mature applications.
They wonder, too, about Sun's ability to do more than sell hardware and evangelize for Java.
"Their opportunity is enormous but they will sub-optimize it because their lack of competence will show," said Mike West, another Gartner analyst. "Their lack of competence will cost them time in the market before they get it right. And they will get it right. But it will take them time."
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