Glowing earnings give grumbling Sun man cause to beam a little

The man with the most famous pearly whites in the technology industry Sun Microsystems chief executive, Mr Scott McNealy, whose…

The man with the most famous pearly whites in the technology industry Sun Microsystems chief executive, Mr Scott McNealy, whose press photographs feature his trademark brilliant white smile came to London this week determined not to break a grin.

"I'm not paid to be happy, so I'm always grumpy," he grumbled at journalists who had gathered to hear him speak about the Sun universe and perhaps smile just a little about Sun's glowing earnings for the recent quarter.

A 12 per cent increase in revenue, driven by strong sales of newly-introduced low-end workstations, was touched upon only briefly by the executive perhaps best known at the moment as a vocal critic of Microsoft. Mr McNealy was most interested in speaking on behalf of Sun's Java programming language, its network computer offering, the JavaStation, and taking defensive digs at Bill Gates's company.

Sun is in an interesting position these days, with constant action on a number of fronts. First, it maintains a strong presence in its native territory of high-end servers and workstations designed to handle reams of data and graphics. The workhorses of large organisations and media firms, Sun machines have held their ground, with third-quarter results also reflecting good sales in highend, high-margin servers and storage products.

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But as lower-end PCs have become more powerful, some customers at the bottom end of the computer scale are opting to use PCs to handle tasks once only possible on beefier workstations. In response to this pressure from below, Sun introduced a line of low-end workstations called Darwin to try and wrest back some market share. Aimed particularly at graphics users, the Ultra 5, 10, and 60, which have an architecture (operational structure) similar to a PC, sold well after their launch this past quarter.

These products have helped Sun to a 38 per cent growth rate in Britain and Ireland, which Mr McNealy says is one of Sun's best markets. "It beats the heck out of East Asia; it beats the heck out of Japan," he said. He also noted that a large, $10 million installation of servers at Ireland's Dell Computer facility makes Sun the third or fourth largest player in the Irish market.

Mr McNealy focused on the company's strategies regarding its Java programming language, which Sun has been trying to promote as a full-fledged computing platform. Next month Java, which has enjoyed intense industry interest since its introduction, turns three years old.

It has not taken over the world of applications yet, as its most ardent supporters once predicted, but has gained maturity and remains a distinct threat to Microsoft's dominance of the operating system and applications markets.

The language promises "write once, run anywhere" programs Java has inbuilt elements which allow a software programmer to write a single version of an application and have it run on any computing platform, from Unix to Macintosh to Windows. Although Java's path has not run quite that smoothly, it remains one of the computing industry's bona fide hot technologies, carrying with it what Mr McNealy called "a halo effect".

He'd like to see Java powering just about any kind of device that would benefit from being linked into a network from set-top boxes on televisions, to smart cards, to diesel engines, to a Java ring. which can hold information that can then be read by a scanning device.

He admitted IBM, with its own network computer (NC) offering, had stolen the march on the recently-introduced, oddly curvilinear JavaStation, but insists Sun will catch up. Low-cost network computers are stripped-down computing devices designed to send data to, and receive data from, a larger networked server.

But he warned that the network computer has been overhyped, particularly by its best-known proselytiser, Oracle Corporation chief executive, Mr Larry Ellison, who "overpositioned the NC, so now we're underpositioning it". Mr McNealy said that the NC was in the same point of development as the PC was in 1979 very young, but with prospects.

Mr McNealy also addressed questions regarding the extent of Sun's dominance of the panel established to create consistent technical standards for Java (he says its members work well at reaching consensus quickly and practically). He also refused to acknowledge any significance in Sun's major reorganisation last week, in which its separate software companies SunSoft and JavaSoft were incorporated into Sun as divisions.

"This is a fairly trivial reorganisation," Mr McNealy said, adding "I think the biggest news of the reorganisation is that there's no news." However, his view is not shared by industry analysts, who see the corporate shuffle as a high-profile streamlining of the Sun organisation.

In particular, the reorganisation is seen as an attempt to eliminate abrasive political scraps between the former operating companies and a refocus of energies on products and technologies, especially the poor-selling JavaStation.

Despite complaints that he is unfairly targeted for "Microsoftbashing", he let fly numerous criticisms of the Redmond company, which is currently under anti-trust scrutiny from the US Department of Justice. Mr McNealy, who testified against Microsoft to a legislative panel in Washington DC, said that he was not seeking new antitrust legislation, but enforcement of existing laws.

As Microsoft prepares to bring out in 1999 a more mature version of its high-end operating system, Windows NT, the barbs are unlikely to stop. NT will challenge Sun's bread-and-butter income from its workstation and server hardware. These in turn run on Sun's Unix operating system, which is firmly in Microsoft's crosshairs.

So, Sun is covering its back by pushing new concepts like Java and network computing sticking to the old model means inevitably conceding ground to Microsoft. Mr McNealy's own philosophy, he said, is to trust in the protean nature of the technology industry: "I don't think you can make any money unless your idea is controversial," he said. "The idea has to be right, but it has to be controversial."

Karlin Lillington can be reached at klillington@irish-times.ie

Karlin Lillington

Karlin Lillington

Karlin Lillington, a contributor to The Irish Times, writes about technology