Red Herring: Starry Eyed McNealy
redherring.com
Mr. McNealy gets starry-eyed
By Sarah Stirland
Redherring.com
September 1, 1999
NEW YORK -- Scott McNealy was in top form Tuesday as he explained
and defended the logic of Sun Microsystems's (Nasdaq: SUNW) latest
network computing play.
Mr. McNealy came to town with Sun's president and chief operating officer
Edward J. Zander to promote the purchase of German office productivity
software maker Star Division. Terms of the deal were not disclosed, but the
logic behind the deal was to use Star's office suite to promote what Sun calls
the "service-driven network" model of computing.
Following the acquisition, Sun plans to launch beta versions of a new service
called StarPortal this fall, followed up with a formal launch in the spring. The
service will make Star Division's office productivity software available to
users over networks and through browsers and devices like PalmPilots. The
information will reside on central servers. Sun is making Star Division's
StarOffice productivity suite available for free download from the Web;
alternatively, people can order a CD-ROM for $9.95.
At the New York press conference, Mr. McNealy
again promoted the idea of outsourced corporate
computing, a model in which software is given away and
corporations and individuals instead pay for product
support.
EVERYBODY'S FREE
"You're going to see a pretty major transition in
technology as what used to be industries are becoming
features," Mr. McNealy predicted. "Mail used to be an
industry -- remember [Microsoft (Nasdaq: MSFT)]
Exchange? It got blown away by Hotmail. It's free. The
great thing about free mail is that you don't have to pay
for it. And it's outsourced. You don't want mail on your
PC, you run it out over the network from your
browser."
And nowadays, it's not just email that's free. A whole host of other features
are as well, including chat, fax, and calendaring, he said.
"That's the model we're moving to ... and it seems brain-dead obvious, yet it
took one very bright German with a 15-year mission to finally get us to the
point where we've got free network-available, object-oriented, compatible
productivity tools available to anybody, anyplace, anywhere, anytime," Mr.
McNealy said, referring to Star Division's founder Marco Boerries, who will
stay on at Sun with the title of vice president and general manager of
Webtop and application software.
MCNEALY IS THE NETWORK
Though Mr. Zander, Mr. Boerries, and the other suits giving demonstrations
parroted these ideas over and over again, Mr. McNealy, in his signature
jeans, open-collared shirt, and blazer was the one who most coherently and
convincingly conveyed the vision.
At the same time as he explained why this model makes sense, Mr.
McNealy used his powerful sense of humor to draw attention away from the
privacy scare that was sparked yesterday with the news of Hotmail security
breaches. The incident made several reporters at the conference question
the wisdom of the network computing model -- especially when there's
sensitive data that looks as if it's a sitting duck on a server accessible
through a network.
Mr. McNealy compared firms that don't safeguard people's information
properly on their servers to banks that can't safeguard people's money: he
predicts that they won't last and will go out of business. He also ridiculed
people's worries about online privacy, pointing out that online security in the
form of encryption and authentication is more powerful than the non-existent
security employed for physical mailboxes today.
"You can go and find a mailbox right now, open the door to a tin box, tin
door, no lock, with unencrypted information in English, sealed in a
paper-thin envelope with spit, yet people are worried about online privacy,"
he said.
SPREADING THE NEWS
One interesting aspect of this StarPortal initiative is the way in which Sun
plans on popularizing the software. It has enlisted several business partners
-- including AT&T Internet Services (NYSE: T), BellSouth (NYSE: BLS),
and Digex (Nasdaq: DIGX) -- that will offer the Web-based office
productivity suite to their own customers. Sun hopes that other Internet
service providers, Internet outsourcing services, enterprise resource
planning, sales force automation, and other types of firms will act as
distribution channels for the StarPortal service. Sun also wants independent
software vendors to use StarOffice component code to built their own
commercial applications.
Despite these ambitious distribution plans, there is the small question of the
large installed base of Microsoft Office users. And though more and more
Internet services are offering productivity features online that previously have
been PC-based, there hasn't been any evidence of widespread corporate
adoption of these services -- yet. Mr. McNealy predicts that StarOffice will
make inroads on Microsoft's customer base when it comes time for
Microsoft Office's next upgrade. He also predicts that the educational and
government communities will be early adopters of this new "free" software.
Tom Dwyer, the Aberdeen Group's research director for enterprise Java,
says that StarOffice's availability on Linux is a key factor in this new
initiative. The combination of the office suite with Linux may prove an
attractive front-end alternative to the Windows/Microsoft Office
combination, he said. |
