Er, ty again: Talk about living in glass houses & casting no stones!: " IBM's Gerstner Sees Trouble for Sun, EMC, Microsoft Models
New York, Dec. 12 (Bloomberg) -- Sun Microsystems Inc.,
Microsoft Corp. and EMC Corp. sell proprietary computing systems
that can't survive in a world of billions of connected devices,
International Business Machines Corp. Chairman Louis Gerstner said.
In a speech prepared for the eBusiness Conference and Expo in
New York, Gerstner said these technology giants -- all IBM
competitors -- are facing an ``inexorable'' move to open-computing
standards driven by the Internet. His main point was that their
market leadership has been built on closed systems, and the
marketplace now demands easy connectivity.
The world's largest computer maker is convinced, Gerstner
said, that the rapid growth of small computing devices of all
varieties, and all connected by the Web, will favor standards
allowing every device to talk to every other device. So, he said,
IBM will invest nearly $1 billion next year to develop the freely
available Linux computer operating system.
``The movement to standards-based computing is so inexorable,
I believe Sun -- and EMC and Microsoft, for that matter -- is
running the last big proprietary play we'll see in this industry
for a good long while,'' Gerstner said.
Gerstner has been IBM chairman since 1993 and is widely
credited with a major corporate turnaround that streamlined and
modernized the company's management. In recent quarters, however,
analysts have openly expressed concern that IBM has not boosted
revenue or maintained market share against rivals.
IBM shares fell $2 to $95 yesterday. Palo Alto, California-
based Sun, a maker of server computers that run corporate networks
and Web sites, fell $4.94 to $34. Redmond, Washington-based
Microsoft rose $3.63 to $58.06. Hopkinton, Massachusetts-based EMC,
the No. 1 seller of large computer data-storage systems, rose $3.06
to $90.
``The infrastructure that is being built is too important for
any one company, industry or nation to `own' or dictate,'' Gerstner
said.
Microsoft's .NET
Microsoft, the No. 1 software maker, is aware that the
Internet threatens to become, in effect, an operating system that
overrides the company's proprietary software. It's developing what
it calls its .NET strategy to use the Web more fully as part of a
new operating system.
IBM, based in Armonk, New York, has vigorously backed Linux,
an updated version of the Unix operating system that was created by
Linus Torvalds and made available on the Internet. Linux companies
tailor and distribute the software but cannot stop a programmer
from making changes to or copying it. IBM is seeking to show that
Linux can run everything from a computer watch to huge
supercomputers.
Billions of Devices
Computer networks, Gerstner said, ``must be open and based on
cross-industry standards'' to connect people and businesses to what
soon will be billions of small devices, ranging from Web-enabled
cell phones to handheld computers and Internet-connected cars.
``That's why we're betting a big piece of IBM's future on
Linux,'' Gerstner said. He argued that Linux ``can do for business
applications what the Internet did for networking and
communications'' -- that is, allow any-to-any computing to
flourish.
Linux shipments are growing faster than proprietary operating
systems, and every seller of server computers will have to respond,
he said.
``It's going to be interesting to see if three or four years
from now anybody with a proprietary Unix system will still have a
leading position,'' Gerstner said. Sun's Solaris operating system
is a proprietary version of Unix.
The head of IBM's data-storage group, Linda Sanford, has
publicly called on EMC to back open operating standards so that any
storage device will be able to communicate with any other storage
device. EMC says its units can link to Hewlett-Packard Co. storage
devices and that more ``interoperability'' is on the way.
Microsoft's flagship operating system, Windows, runs an
overwhelming majority of the world's personal computers. Linux,
however, is growing at twice the rate of Windows NT, which runs
corporate networks, and by some estimates will overtake NT,
Gerstner said.
Shell's Contract
The exploration arm of Royal Dutch/Shell Group, Europe's
largest oil company, will buy more than 1,000 small IBM servers and
use Linux software to make them act like a single supercomputer,
IBM announced today. Gerstner called it ``the largest Linux
installation in the world.''
Gerstner also made these points in his speech:
-- The Internet is an ``integrating'' medium that is forcing
companies to operate in a more centralized fashion than they might
otherwise like.
-- The computing ``pipes'' that make up the Internet will soon
be so burdened by Web traffic that the network itself will require
``intelligence'' built in. This ``intelligence'' will help balance
the load, manage traffic and make data secure.
-- Increasingly, companies will purchase computing services
such as Web hosting and data storage as a utility-like service on a
pay-as-you-go basis over the Internet.
-- Serious public policy issues, primarily concerns about
personal privacy, will have to be overcome for the Web to reach its
full potential.
----Paul Horvitz in Boston (617) 338-5800, or
phorvitz@bloomberg.net, through the Princeton newsroom
(609) 279-4000/atr |
