Briefs: November 13, 2006

SUN READIES GPL LICENSE FOR JAVA
Java

Generally, the company will offer both commercial and GNU General Public License (GPL) options in a hybrid model reminiscent of the one followed by MySQL and other companies trying to straddle the open-source/commercial software line. The company will follow the current GPL 2 model, although the more controversial GPL 3 is "under discussion," sources said.

One major advantage will be that Java code can now legally be distributed on-disk with any Linux distribution, sources said. Before now that Java code had to be on separate disks because of licensing differences.

The company has been a holdout on GPLs. Sun would not comment. Many developers and others had clamored for a GPL concession. CRN reported this change of plans last week although at that time it was not clear if Sun would continue to license Java as it has in the past. It will, but the GPL mode will be offered as an additional developer choice.

Sun CEO Jonathan Schwartz has publicly toyed with the idea of 'GPL'ing' Java. "We're now making serious progress on open-sourcing Java (and despite the cynics, using a GPL license is very much *on* the table)," Schwartz wrote in his blog in May.

Earlier, he mused on the merits of adding a GPL license to the mix for Solaris. "We're looking at how to reach developers and customers who prefer the GPL," he wrote.

One Boston-area Java developer was surprised at the news, but said Sun had to change its ways. "Java gets dismissed in the open source world for lots of reasons—one of the more valid ones is that it's not open source. Red Hat and some other Linux distributions don't include Java for this reason. Python and Ruby are open source, and they generally are installed by default," he noted.

With the GPL license, any changes made to the core code must be submitted back to the open-source community for review and reuse. A hybrid license allows developers to maintain control over their changes and restrict their use.

SEAGATE TERMINATES LARGEST DISTRIBUTOR AFTER INQUIRY
Seagate Technology has terminated its agreement with its largest distributor, eSys Technologies, according to a filing with the Securities and Exchange Commission.

The hard drive maker claims that eSys refused to provide sales records to third-party auditors hired by Seagate and the distributor revealed that an audit likely would reveal irregularities.

"We took steps today to begin the process of terminating our distributor relationships with eSys Technologies and have ceased shipments of our products to eSys," Seagate said in a Nov. 7 8-K filing with the SEC.

Executives from Seagate and eSys couldn't be reached for comment. eSys accounted for about 5 percent of Seagate's revenue in the fiscal year ended June 30 and 6 percent in the first fiscal quarter ended Sept. 29, according to Seagate.

Seagate initiated steps toward an audit of eSys' POS records in early October to confirm the accuracy of the distributor's credit claims under the storage vendor's sales incentive programs. Discussions regarding the scope of work, timing and selection of third-party auditors continued until two weeks ago, when eSys informed Seagate that it would deny auditors access to the records, according to Seagate. Seagate claims it has a contractual right to seek an audit in the agreement between the companies.

Through Nov. 5, eSys' outstanding balance to Seagate was about $50 million, down from $103 million at the end of its fiscal first quarter. Seagate said it will record $40 million of allowance for doubtful accounts due to its uncertainty of collecting the rest of the money.

"We intend to make every effort to collect all amounts owed by eSys as promptly as possible. Any amounts recovered on these receivables will be recorded in the period received," Seagate said in the 8-K filing.

ESys was founded in Singapore in 2000 and has grown to a $2 billion company with offices in 38 countries, including the United States.

ESys said in a statement that it "strongly refutes any allegations of irregularities in its compliance of the agreements." The distributor also said it declined Seagate's requests for an "intrusive" audit because of its commitment to the confidentiality of data relating to its customers and other vendors.

"The intrusive nature of the audit would not be justifiable to our business partners under normal business practices," according to eSys.

In addition, eSys said Seagate "repeatedly refused to provide shipments as required under the agreements" during negotiations between the companies.

CEOs SAY NO CHANGE TO VARs IN AVNET'S PURCHASE OF ACCESS
Access Distribution solution providers should see no change in their relationships with the distributor once its sale to Avnet closes, executives at both companies said last Monday.

"The people they do business with, the service they get from Access does not change," said Roy Vallee, chairman and CEO of Avnet.

Under the deal, Avnet agreed to buy Access, a $2 billion Sun Microsystems-focused distributor, for $415.5 million in cash from General Electric. The acquisition is expected to close by the end of this year.

The combined companies will look to share best practices, which should benefit both Avnet and Access solution providers, Vallee said.

"While GE is a phenomenal company, it is not dedicated to the technology distribution business like Avnet is. I would imagine that Avnet is doing some things that may be embraced by Access. And vice versa, we expect to learn things from them," Vallee said.

Besides furnishing Avnet with the Sun lineup, the acquisition brings new vendors such as Avaya, Check Point Software Technologies, F5 Networks and Hitachi Data Systems.

Most important, the deal brings Sun enterprise-class servers to Avnet, Vallee noted. The distributor carries Hewlett-Packard and IBM platforms and had picked up a limited Sun line when Sun acquired StorageTek.

"This puts the third leg on the stool. There are only three [enterprise computing] vendors that matter. We now have all three. The strategy is a perfect fit," Vallee said.

Access has been the subject of sale rumors for many years, but it wasn't until a few months ago that Avnet was contacted by a banker retained by GE to manage the sale, Vallee said.

When the deal closes, Access for the first time will become part of a parent company focused on IT distribution.

"It will only enhance our value proposition to the market to be part of a parent that walks and talks the same language we do. The message to partners is it's going to get better," said Anna McDermott, CEO of Access.

Access adds about $2 billion in annual sales and should increase revenue for Avnet's Technology Solutions group to $7 billion, Vallee said.