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Open Source hurts Sun, not Microsoft

I am repeating part of my receent post here since it unlikley to seen under the prevous headding.

There are probably two important points to the open source movement that needs to be pointed out:

#1) Open source is Unix. Unix is Linux, Sun Systems = Unix. In other words, any talk of success in the open source market generally means a blow to Sun Systems. While movement in the open source community can hurt Microsoft, it in general hurts Sun systems *much* more. Linux and Sun are direct competitors. Sun might endorse Linux, but that simply means that sun will be worth less $$, and their cost structure will have to change (ie: less pay, or smaller company). It is that simple.

I was at a SCO Unix meeting some years ago, and I asked the rep what are they going to do about Linux? His response was classic FUD. A business cannot rely on Linux do to legal reasons, as there is some code in Linux that opens them up to lawsuits. I recognized his response as classic FUD.

Of course when IBM and Oracle announced whole handedness support of Linux, then the Unix Vendor SCO was finished. They were purchased by Red Hat....and if SCO was on the ball, it would have happened the other way around!

I have to admit that I am fan of Linux, and yet the ONLY intelligent real competitor with a brain to MS is Sun systems, and they have the most to lose in open source.

#2) If the OS becomes free (as is Linux), then what becomes valuable? Ask your self what would happen to the cost of a air plane ride if the jet, fuel, and the pilot were free? In fact, the cost of a air flight would actually go up!

Why? Well while you are reading this, you would say, hey lets fly to England for some beer, and real English fish and chips. Of course all the women in the office want to jump on a free plane ride to Paris to purchase some perfume. Of course the folks down the hall want to jump on a free plane ride to watch the next F1 race in Spain this weekend. Why not.....it is Free to go!

Thus, when you arrive at the air port, there would be a incredible mob scene as half the city is now at the air port for the free plane ride. Thus, while standing in line, and I have a important business meeting in France, I will offer the person in front of me some money to move up in line up. In fact, that simple low cost fight from England to France will now actually INCREASE in cost, due to people who actually NEED to fly from France to Engalhed start paying a airport user fee. Thus, while the flight is free, to control and manage the mob scene at the airport, the user’s fees and cost of what people are willing to pay to use the airport will eventually balance. In other words, if air planes be come free, then you better invest in air ports. I also believe that the cost of flights from places like England to France would actually go up in cost, since those people who need the flight will actually pay a higher user fee then people who just want to buy some perfume.

Ok, so a O/S is now free, so IBM who in a sense now owns a bunch of consultants and machines will be the winner. This is why IBM has endorsed Linux from top to bottom. From the smallest pc to the largest Mainframe from IBM can now run Linux. They are air port owners, and have been very good at selling systems for years. They don’t sell a OS, nor do they really sell computers....they sell solutions. That is what IBM does well.

When I look at the company down the street that is running Linux, they need the same amount of support that they guy down the street running a win2000 server does (we can aruge raw $$ here, but the costs are very close right now). In other words, the general jobs in the IT sector will NOT be hurt by open source. What will change somewhat, is who is going to get the support contract.

Since Sun is also a systems integrator, and application seller, it really means that IBM and Sun are also now heading for a big clash. MS just has to sit back and watch these two folks beat each other up...

Albert D. Kallal
Edmonton, Alberta Canada
Kallal@msn.com

Albert D. Kallal
Friday, April 26, 2002

So, let's see if I got it right, you mean that people won't go to Europa because it costs (let's say) 1000, but they will fight for a chance to go if it they are allowed to pay 2000 for the privilege.

And them, pilots knowing that they can get a plane for free, won't get one and create their own airlines and , therefore, there won't be more than enough planes to carry even those you want to go to Paris for breakfast.

I never paid much attention to the economy classes I got, but  I am afraid the economy doesn't work quite like you think it does.

I agree that, for the moment, Sun is under more of a direct attack than Microsoft from Linux, just like a couple years ago ago SCO (which was bought by Caldera, not Red Hat) was under more of direct attack than Sun.

Andres
Friday, April 26, 2002

Let's first point out you're only talking about free OS's like FreeBSD and Linux.  I imagine Sun likes all the opensourced Java applications that can be run in Solaris as easily as Windows. 

Second, we are in the year 2002.  I think there should be a decent free OS.  Evolution must occur at some point.  If a corp wants to make money, they should get with the times and build upon the basic infrastructure.

Open source is notorious for creating /tools/.  You can use those tools to create closed, proprietary software, despite what Microsoft FUDs.  Just target one level above your tools, or make really nice tools.

Respectfully, I have to read your post as if it said, "HP-UX hurts Sun, not Microsoft."  If instead you're saying that free software is killing the industry, then you might want to bolster that argument.

battle for stalingrad
Friday, April 26, 2002

Does Sun suffer, since Software is not there core business - hardware is.

In the early days Hardware was very expensive, and software represented a tiny proportion of the cost.  It was the hardware manufacturer, like IBM, made the biggest profit.

As Hardware costs fell, the proportion of the cost spent on software increased and increased so that Software become the significant cost in purchasing a computer system.  Microsoft wins, IBM loses.

The importance of Software was hurting Sun.  The most impotant software, Windows, didn't run on their hardware.  This is why they've given away Java and StarOffice, to make sure the necessary software exists to make their own hardware is viable.

Sun does lose out in terms of the Solaris OS, but there core business is Hardware.  A return to Hardware being the significant portion is of benefit to them.

Open Source lowers the cost of software again, so that Hardware becomes the significant cost once again.

To refer to your analogy Sun is the airport, not the airline.

Ged Byrne
Friday, April 26, 2002

Andres ---------------------------------------------------------------
So, let's see if I got it right, you mean that people won't go to Europa because it costs (let's say) 1000, but they will fight for a chance to go if it they are allowed to pay 2000 for the privilege.
-------------------------------------------------------------------------

What Albert is saying is that only the people who need to go to Europe will go for a 1000, but if they were free then you would have to pay more to GUARANTEE a place on the flight.

The effect he is discribing is easily visible here in the UK, where healthcare is free at the point of use.  Waiting lists are huge and many patients are forced to pay more for private care.

Ged Byrne
Friday, April 26, 2002

Another example is road travel.  A few decades ago cars were expensive, and only a few could afford it.  This mean that those who did own cars could quite easily and cheaply drive into the centre of the city for work and park near to the door.

Now cars are much cheaper everybody has one.  However, the cost now to drive into the city is greater in terms of time and fuel because of traffic jams.  The cost of parking once you get there is astronomical.  The cost of maintaining the road network is also increasing.  This means that as Cars get cheaper, the overal cost to the society gets greater - and thats even before you factor in enviromenal damage.

Ged Byrne
Friday, April 26, 2002

Ged, there is a big difference.

If you applied the airline scenerario described to health care, you would have free medical equipment, doctors and nurses that work for free and hospital buildings that don't cost anything either.

That's not likely to be the case in the UK.

Andres
Friday, April 26, 2002

Many of the large companies that switched to Linux did so from Solaris or other commercial UNIX.  Lets not forget though, that Linux is displacing some Windows servers in the realm of web serving and file and print serving. 

This is a two-fold blow to Microsoft.  1.  To there ego.  How could someone actually want to use something besides our softwar?  2.  Microsoft doesn't get any money from cals needed to connect to there file and print servers because the file and print servers are Linux.  Also bear in mind that since Linux with Samba can handle higher loads than Win2k for file servering you will need less hardware.

I see Windows on the desktop ad infinitum, but being displaced where applicable by Linux for cost reasons and performance reasons.  Currently stuff that should be considered commodity serving: file and print serving, web serving, radius, are all likely candidates for replacement.  Big stuff like RDBMS are further down the road, at this point most companies feel more secure trusting this domain to proprietary vendors and maybe always will.

I also think Microsoft's newest, previously postponed twice licensing plan will push companies to seek genuine lower TCO, not just that promised by a certain large corporation's marketing department.

Just my thoughts, but I know our company is doing all the things I've described.

Ryan Ware
Friday, April 26, 2002

If you could've all the women, all the cars, all the power and all the money in the world, wouldn't you eventually get tired of it all? Won't it loose value in your eyes? Wouldn't you eventually get bored?

Same thing with free software, you can have everything you want, but is that what's really good for you?

Look at kids, if you give them plenty of gifts on there birthday, they quickly get tired of them all and not play any. But if you give them only one gift, they'll keep playing it for a long time.

Roger
Friday, April 26, 2002

I don't find the reference anymore, but I remember reading on _The Register_ that Sun is phasing out Solaris on Intel and is supplying Linux to their customers that want it. Isn't Sun in the high-end hardware business? Certainly it's true that there are customers who want anything instead of MS.

Christopher Wells
Friday, April 26, 2002

I understood sun's problems to be caused more by forking.  Lots of flavours of unix were released making consumer choice difficult because of the conflicting standards and minor deviations between flavours.  It is also a pain in the neck attempting to decide which platform to support or supporting more than one flavour of unix.  It was the unix manufacturers themselves that weakened their market long before linux became viable.  Linux stays strong because it has not forked, ditto for windows.  There is one accepted version that stays stable.  In fact you could look at the problems of linux establishing itself on the desktop market being down to the lack of standardisation in the windowing systems.  With Gnome, KDE and all the other options it becomes a tough choice to decide what to support, and how to make it look good on any given system.

An interesting read on the subject of forking is located at http://www.linuxmafia.com/~rick/essays/forking.html

Colin Newell
Friday, April 26, 2002

Microsoft is dead scared of the open source movement and from linux. They are using every dirty  trick, every resource they have to fight back. They want laws established to stop funding open source research, they give billions to CS programs to force the students to use Windows and their tools. How long can microsoft keep on doing this?
On the other hand Sun is a hardware company, they have one of the best machines in the world that no x86 based atchitecture would be able to match for a long time.
Remember a cluster of 256 X86 processor is not equivalent to
a Sun enterprise with 256 processors.

Michel
Friday, April 26, 2002

Albert D. Kallal: I would have to disagree that open source is bad for Sun.  While open source could be argued to benefit Linux more than Solaris, it definitely benefits Solaris more than it does Windows.

As you say, "open source is Unix".  Say that is the case, and open source is successful, so that the majority of the consumer market uses applications developed for Unix.  Compare those with applications developed for Windows.  The former will be much, much more likely to run under Solaris, even if they were developed primarily with Linux in mind.  That means that consumers thinking about using a different OS will have a lot less to worry about in terms of being able to use the apps they currently enjoy.  There's a much smaller barrier between Solaris and Linux than there is between either of them and Windows.

Even if Solaris isn't free, there are theoretical reasons to use it over a free Linux.  Without knowing the details of Solaris, I can say that all OSes have to make decisions involving tradeoffs between performance and perceived responsiveness and security and ease of configuration and ability to take advantage of good hardware and so on.  And all Unix OSes can make these different choices and still be completely compatible with typical Unix apps.

That means Sun could market Solaris as the best OS for Sun hardware (which is itself very competitive), most secure, most scalable, easiest to configure, or any of a number of things, and charge, say, $150 per license, and still make money off of it.

In other words, open source doesn't just fail to hurt Sun, it boosts it amazingly.  Even the Solaris department benefits.

Paul Brinkley
Friday, April 26, 2002

I don’t like the airport metaphor. It makes no sense to me. The roads and cars metaphor is much better.
It goes like this. Think of software as roads, and hardware as cars. You need both to get anyplace, but roads are infrastructure. We all pay for them through taxes or tolls. People and companies own cars and trucks, they are a physical asset, just like a server or a PC.
There are many companies that build roads.  Standards are available about how wide a road must be, how tight a curve can be, etc. All cars and trucks can drive on the roads.
There is not a Ford only road that is incompatible with Chryslers. There is a Microsoft product that will only work with Intel architectures. If Sun is a hardware company, they want to have open, standard based software that allows their hardware to work with other systems. That would let them sell hardware based on  features, performance, service, or stability. Unfortunately, it eliminates lock in which makes it much more important to build good stuff and give great service.
IMH(umble)O, as a consumer this is a good thing. It forces people who build physical assets to compete. It also forces the software companies (road constructors) to bid and compete to upgrade the infrastructure. Everyone benefits from the improved infrastructure. A well-run company will succeed; a poorly run company will fail.
This is very bad for a company like Microsoft. If I ran the only company that made roads, I would make a huge amount of money and not care how bad the roads are. In fact, I would force car manufactures to add features just to overcome my poor road making. I would also try to segment the market. I would charge different fees for truck roads and car roads and fast roads. I would do this for public safety, because I am a nice guy. After there were roads everywhere, and there was no more money in making new, better roads, I would force everyone to pay a subscription.  In the case of a road, that is acceptable, roads wear out, bits do not.

Doug Withau
Friday, April 26, 2002

60% of all Sun hardware goes directly from Sun into an AOL NOC. Hardware is still the core of Sun's business. Thus, anything that hurts AOL hurts sun, more than Linux does.

In any case, Sun deserves to die for dumping Java onto the world and promoting it as a general purpose language.

AOL NOC Engineer
Friday, April 26, 2002

Andres ---------------------------------------------------------------

Ged, there is a big difference.

If you applied the airline scenerario described to health care, you would have free medical equipment, doctors and nurses that work for free and hospital buildings that don't cost anything either.

That's not likely to be the case in the UK.
-------------------------------------------------------------------------
Andres,

For the end user, it is as good as.  Health care is free at the point of delivery.  Sure I pay a hefty wad of tax, but when I go to casualty so that I can wait 6 hours to look at my newly broken arm, money is nowhere to be scene.

After 30 minutes, if the doctor offered to see me straight away for $500, I'd reach for my credit card.

Ged Byrne
Friday, April 26, 2002

You are right, that's the way it works in real life, because the cost of health care is so astronomical that, no matter how much they tax out of us, the governments can hardly cope with it.

But with the given airline scenario, the cost is  null to the provider. If governments could get a hospital complete with the best technical means and doctors for free, you would have Tony Blair inaugurating a new hospital, just in time for prime time TV news, on a daily basis, there would be no waiting lists and private doctors would have to close shop for lack of patients.

I know, it doesn't work like that, but that's the way it would work with the given hypothesis

Andres
Friday, April 26, 2002

I actually started this thread in sense to garner some opinions about Open source, and Sun. In thinking about this, some of you have actually managed to “change” my mind a bit here. It is very possible that open source is actually a benefit to Sun. Since much of my argument is Sun=Unix, then it does follow that if open source is a positive thing for Unix, then that could very well be considered plus for Sun. I am going to have to think on this a bit more. Hence, my argument really can go both ways.

I do see a trend for many shops to drop those Sun boxes, and this of course is in the lower end of the market. As time marches on, then it would seem that Sun future lies in the same camp as IBM. That is providing quality solutions to businesses in general (this of course is what Sun does now anyway).

As for some poking a few holes in the free airplane example, I have no problem at all with this!. However, I did offer this analogy simply as a *thinking* aid. In other words, to answer these tough questions, I often look for an analogy. This is simply what we call “out of the box” type thinking. It this type of thinking that I look for in developers. If I ask you how cheap can a phone call can get, then you might want to ask how much electricity AT&T purchases in a year! While the electricity used in a phone call might be small, you do have to ask that question, and most people don’t.

Anyway, back to the cost of the OS issue.

Even with such low cost hardware, the cost of the OS is actually quite a small portion of the total cost of owing a pc. Windows at OEM prices is what, around $90? That is not a lot, and is considerably less then what it costs a company to *remove* a old pc!

If a company is run well, and produces a product that has value, then don’t think Sun, or even Microsoft has to worry about open source. Open Source can however kill profits in certain portions of the IT industry. It does however seem that Sun has more to lose in this.

Albert D. Kallal
Edmonton, Alberta Canada
Kallal@msn.com

Albert D. Kallal
Saturday, April 27, 2002

> It does however seem that Sun has more to lose in this.

I don't know about that. Think of a telco or ISP who wants for some reason to use PC-like hardware for some subsystems. If it weren't for Linux then they would perhaps have to consider to consider MS ... but, given Linux, they don't.

Christopher Wells
Saturday, April 27, 2002

I'm a bit partial to Kent Pitman's thoughts on the matter.  Though I still am on the side of open source, unlike say, a Microserf.

[ http://groups.google.com/groups?q=g:thl2954264445d&dq=&hl=en&selm=sfwit7ahjdl.fsf%40shell01.TheWorld.com&rnum=82 ]

People who write software often take an element of risk for doing so.  That is his argument, and he continues by saying that people who undercut the price (free) will erode many risky projects.

This I believe is wrong, since we all know the Amigas of the world.  When the company dies, all the source goes down with it.  Amiga was apparently technically brilliant, but we'll never truly learn from it.  The Microsofts of the world, with their strategy taxes, win out.

Kenny Bloom
Monday, April 29, 2002

Kent's argument is interesting, but if you follow his Logic then Microsoft should never have release Excel - 123 had already filled the market.  The same goes with Word (Wordperfect - which should never have replaced Wordstar).

Ged Byrne
Monday, April 29, 2002

Yes, and they should never have released a free Internet Explorer to cut off Netscape's air supply.  One poor Microsoft programmer even claimed in his weblog that free programs undermine capitalism because they set up shadow economies.  But as an old king said, "I just do what I want and let the scholars justify it."

Kenny Bloom
Monday, April 29, 2002

I try to find out which is the second big construction company from England. please, if you know how to enswer to my question, send it to my e-amil: andobogdan@yahoo.com. I am from Romania, I am construction engineer and I am trying to find a job in this field. thank you

Andone Bogdan
Friday, December 12, 2003

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