Sun, Microsoft Pact Viewed As 'Unholy Alliance' Against Linux, IBM

During a brief press conference, Microsoft CEO Steve Ballmer and Sun CEO Scott McNealy--megarivals whose companies have battled fiercely in the operating system market for more than 20 years--pledged to make their platforms and respective development tools interoperate.

The wide-ranging pact calls for seamless interoperability between Windows and Solaris Unix operating systems and Java and .Net development platforms. It also ends Sun's aggressive antitrust litigation against Microsoft and transfers $1.6 billion of the $55 billion in Microsoft's war chest to Sun, which has seen its profit margins battered by the growth of Linux on Intel servers.

The two executives alluded to the creation of a framework for the technology collaboration, including joint efforts on Sun's Opteron server plan, but few specifics. Microsoft Chairman and Chief Software Architect Bill Gates and Sun CTO Greg Papadopoulos are hammering out the details of the technology-sharing pact, both companies said.

The complex deal began in earnest roughly a year ago after Ballmer and McNealy, two Detroit natives, high school and college buddies as well as business archrivals, met for a golf game. It was presented simply as a truce instigated by customer demand for interoperability and less rhetoric, but many saw the historic pact as a resounding battle cry against Linux.

During the conference Friday, neither CEO mentioned open source or Linux specifically as motivating factors. But their continual emphasis on intellectual property (IP) and patent rights--fighting words to those who back Linux and the open--source movement--signaled the formation of a proprietary software army.

"It's a 10-year cooperation to make interoperability unique and exceptional in a way that will advantage Microsoft and Sun customers in a special way," said McNealy, noting that corporate customers told the two vendors to stop making noise about interoperability and do something--or else. "Maybe we've grown up. Maybe they've grown up, or maybe the customer is in charge. This [deal will offer] a higher level of interoperability and compatibility while respecting each [other's] IP."

Ballmer acknowledged that it took the two vendors more than a year to rebuild trust after decades of battling in public and in the courtroom but that they were united in their common interest in protecting IP rights and patents in a new era of software development.

"It's all about helping customers who own our stuff and who will continue buying stuff. It's an agreement that comes from two companies that believe in IP, develop IP and respect IP, and we needed a framework for our collaboration that respected our mutual IP ... we do both value IP. How to interoperate without giving away the crown jewels, so to speak," Ballmer said.

Patrick Derosier, co-owner and CTO of CPUGuys, Hanson, Mass., said the deal is clearly a "shot across the bow to Linux."

"Linux is not as attractive as it was yesterday," said Derosier. "The collaboration between these two companies nullifies Linux's advantage in the server market. This means Java is going to be a higher-end product. It takes away any objections to Java. One of the main problems with Java was that it conflicted with XP and every other operating system that Microsoft ever made. There were always serious patches and security flaws."

Derosier said it also means "higher-quality products" from both Sun and Microsoft. "Getting the software from these two companies to work together has always been a big problem for VARs," he said. "If these two companies ever combined on a server, Linux would be done."

Novell and IBM said they would not comment. Linux software leader Red Hat issued a statement Friday, saying, "The alliance validates open source as an alternative."

Several analysts said the deal will help Microsoft and Sun battle IBM and Linux, but claim market forces drove the deal.

McNealy has been under pressure to return Sun to profitability for some time, and many viewed his single-minded disdain for Microsoft as a personal crusade that clouded his judgment to make savvy business decisions.

Sun's reconciliation with Microsoft and the promotion of former Software executive vice president Jonathan Schwartz to president and COO signals a sea change at Sun that could pave the way for growth.

"Microsoft wants to get the EU off its back, the Sun board wants McNealy to stop obsessing about Microsoft and start addressing the needs of Sun's customers, and Java/.Net integration and interoperability is at the crux of customer needs," said Anne Thomas Manes, vice president and research director of application platform strategies at the Burton Group.

Still, it's unclear how the 10-year technology-sharing pact will impact Sun's own support for Linux on the desktop and server. Sun currently sponsors a number of open-source projects, including NetBeans.org, OpenOffice.org, JXTA.org and SunSource.net. Sun has also invested heavily in the Linux platform, including desktop technology (Gnome, KDE, Java Desktop), application suites (StarOffice and OpenOffice) and platform infrastructure (Java Enterprise System, Java runtimes, application servers), but it hasn't really embraced Linux from the hardware system perspective, Manes said.

Despite all those efforts, Sun is viewed as being highly ambivalent about Linux and somewhat late to the party with its full support.

Solution providers in the Windows, Unix and Linux markets had widely varying views on how the pact will shape the computing and channel landscape.

In a meeting with reporters Friday afternoon, McNealy and Ballmer said the pact was a big win for partners.

"There will probably be a lot more channel partners doing both Microsoft and Sun because of this," said McNealy.

"It's the channel partners who want us to be able to take complexity out of solutions so they can focus more on value-added solutions," said Ballmer.

One solution provider said Sun is making a big mistake, and that no pact will slow the spread of Linux.

"The deal is an unholy alliance that spells the end of Sun Microsystems as we know it. This move makes Sun the Apple Computer of the Unix world. Apparently, McNealy thinks the enemy of his enemy--Linux--is his friend. They couldn't possibly be more wrong," said Ron Herardian, CEO of Global System Services, Mountain View, Calif. "It's just an unbelievable disaster for the industry. This won't stop Linux; it just puts Sun on the losing side of the battle line."

One open-source solution provider said Microsoft and Sun are merely banding together to stop their respective financial and legal nightmares.

"I doubt it [will] hurt Linux," said Chris Maresca, a principal at Olliance Consulting Group. "Sun has just started selling Linux PCs at Wal-Mart, so they seem pretty committed to Linux. Sun's strategy is most likely Linux on the desktop and low-end servers, Solaris for the back office and data center. This deal was all about Microsoft's problems with the European Union and trying to tie up all those loose ends, especially since Sun got everything it wanted."

"I think Microsoft is starting realize that it cannot fully combat open

source and this gives them some ties to that community,' said Michael Goldstein, vice president at LAN Associates, Fort Lauderdale, Fla. "It also aligns them with a strategic Unix type partner against the IBM/Novell/Linux world."

Other solution providers said the deal is good for channel business.

"VARs and users are the big winners," said Frank Basanta, director of technology at Systems Solutions, a New York-based systems integrator. "A long-standing feud between two of the major players in the technology industry is over. This will mean better integration and collaboration of the two different product sets and gives the VARs a much deeper ability to work with both products and not fear any kind of reprisal from either one of vendors. This brings us closer to a true heterogenous computing environment."

Basanta said the deal could save VARs hundreds of hours of costly development and integration time. "These are savings that will be passed on to clients," said Basanta. "This had to happen because Linux is making such strong inroads."

"As Java and .Net continue to grow as platforms, the ease of interoperability and seamless integration becomes more important, especially for clients that are moving toward service-oriented architectures and smart clients," said Ken Winell, CEO of Econium, Totowa, N.J. The pact will let developers find the best fit of technologies and ease concerns about heterogeneous environments, he added.

David Tan, CTO of Chips Computer Consulting, a Lake Success, N.Y., solution provider, agreed that the deal will be a boon to VARs.

"This is more opportunity for us," said Tan. "We can now integrate systems that previously could not talk to another or work together. Now you can come up with solutions that bridge those two technologies. It creates a world of new applications possibilities."

Jim Guinn, national practice director at Houston-based Sun solution provider Consultants Choice, is positive on the pact but wants to see details on how interoperability will be achieved. He characterized the companies' plan to foster interoperability between the Sun Java System Identity Server and Microsoft Active Directory as a "very positive win for Sun's unified identity strategy and Liberty. ... It most likely means [Microsoft] Passport, which has been hot and cold, will become more open."

Linus Torvalds, the leader of the open-source movement who invented and trademarked the Linux operating system, said he is no business expert but he viewed the deal as two hurting vendors licking each other's wounds, more than a battle cry against Linux.

"Sun is probably very tired of that 'everything we do is to screw Microsoft over' approach to technology and marketing, which clearly has never worked," said Torvalds, via e-mail to CRN. "If you want customers, you should show yourself to love your customers, not hate your enemies. That Sun war against Microsoft has obviously made people wonder about whether Sun has any real positive strategy at all. And Microsoft was probably more than willing to make friends too, since Sun certainly isn't threatening them and they probably want to make [themselves] look [like] good guys in light of the EU sanctions."

The top Sun and Microsoft execs said the deal was signed at 4:15 a.m. Pacific time Friday. At the end of the press conference Friday morning, Ballmer characterized the pact as good for everyone.

"I think there's nothing in this, nothing, nothing, nothing, nothing, nothing, that will do anything other than delight customers." we're looking for the downside, and we don't see downside," said a triumphant Ballmer.

But at least one security analyst noted that the sharing of protocols and other technology hooks between the two could have security ramifications.

"Sun and Microsoft making peace sets the stage for technical collaboration. Interoperability has the potential for positive results for enterprise clients and interest to certify each other's platforms will benefit enterprises," said Adam Lipson, president and CEO of Network and Security Technologies, a consulting firm in Pearl River, N.Y.

"However, system interoperability comes with a security price. When systems interoperate by opening the system to communications, we also open ourselves to security vulnerabilities. But my sense is that the positive outweighs the negatives."

For background on Sun and IBM's uneasy alliance, see related story.

Elizabeth Montalbano and Larry Hooper contributed to this story.