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To: cheryl williamson who wrote (848)	12/1/1998 5:50:00 PM
From: Bill Fischofer	Read Replies (4) \| Respond to of 5853

A few points First, IBM has had the enterprise market "sewn up" for decades. The glass house is where IBM made its reputation and that's the turf they'll defend against all challengers. Sun and others today are nibbling at IBM's edges (just as NT is today nibbling at Sun's edges), but it would be naive to think that IBM will take any real inroads lightly. Second, as the article mentioned in my prior post pointed out, there appears to be little demand for special-purpose Java hardware. What's the real need? Virtually all embedded applications require little in the way of processing power and dirt-cheap microprocessors from ARM (now Intel), Hitachi, and others are fully capable of running Java as well as any other software required of them. There's also the problem that Java is not currently ready for real-time applications, which is the comparatively "high-margin" end of the embedded market. Third, we have evidence that Sun's pricing power for Java licenses is limited. HWP recently balked and threatened to write their own implementation of embedded Java until Sun hastily renegotiated their licensing terms (doubtless at greatly reduced fees). The only way Sun will succeed in getting their Java licensed everywhere is by making only pennies per copy. Take the case of smart cards, for example. Assume a billion Java-based smart cards are issued over the next ten years and Sun gets 25 cents from each of them. That's $25 million in licensing revenue per year--hardly anything for a company of Sun's size. Even then, until Java is an ISO standard, deployment will be limited. C++ is only now getting around to final standardization and I see little chance of Java achieving standardization before 2005 at the earliest. And even if Sun "owns" the standard, the market for development toolsets is comparatively limited and there is vigorous competition in that market. In short, I just don't see where the big Java money is going to come from.