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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: Valley Girl who wrote (35109)	12/6/1999 1:50:00 PM
From: Bill Fischofer	Respond to of 74651

Re: Java and Profits There are only two ways SUNW can conceivably make significant money from Java. The first is that SUNW miraculously transforms itself from a hardware company into a software company and is able to extract monopoly rents from Java as a proprietary product. This clearly is the vision held by many of Java's proponents. The second possibility is that widespread adoption of Java fuels accelerated demand for huge central servers ("hardware drag") which SUNW will supply. A moments reflection shows that neither of these two scenarios is tenable. For the first, nobody in the industry wants to see a MSFT monopoly replaced by a SUNW monopoly. The real lessons of the MSFT anti-trust episode is that key software technologies are simply too vital to the global economy to be entrusted any more to a single company, no matter how "benevolent" their intentions may be. Ironically, this is one of the reasons why MSFT's current position is unlikely to be soon challenged--MSFT will not be replaced by any single company but rather by a wholescale shift in the software technology landscape. Thus, for Java to become the ubiquitous technology platform its proponents desire, it will do so at the expense of SUNW's ability to retain proprietary control over it. My personal belief is that Java is too useful to fade away and hence will of necessity be wrested from SUNW's control. SUNW seems to understand this but is also very reluctant to abandon the dream of becoming heir to the MSFT Windows position of industry dominance on this issue. Once Java is liberated from vendor-control, however, it will only accelerate the commoditization of the server space since Java applications will no longer have any affinity (technical or sentimental) to SUNW's hardware. This, of course, plays directly into the hands of EMC and the move towards storage networks which were discussed here earlier. In the post-server era the real source of proprietary value is in the care and feeding of data, not applications. None of this, of course, argues that SUNW is not a fine investment, especially over the near term. Demand is clearly sufficient to support many winners over the next several years. However, if SUNW remains successful it will be in spite of Java rather than because of it.