Free Software From Anywhere?

For years,
Sun Microsystems Inc Chief Executive Scott G McNealy has been
one of high technologies’ most vocal rebels against the digital
world order set by software king Microsoft Corp. He has championed
a vision in which computer users would no longer be tied to
PCs crammed with Microsoft software. Rather, they could tap
into computing resources-including all their email and favorite
programs-whenever they wanted, as long as they could make
a connection to the internet.

It was
bold talk. And until now, it was just talk. But in the past
year, Sun has been developing and acquiring technology that,
when combined with its back-office computers, makes the notion
of a world of computing beyond Microsoft far more credible.
On August 31, McNealy filled a key gap in the strategy: Sun
announced the purchase of Fremont (California)-based Star
Division, which has office programs that can run on Windows,
Linux, Sun’s Solaris, and other software.

What’s
the big deal? By early next year, Sun will convert Star’s
suite, which includes a spreadsheet and word processor that
are compatible with the Excel and Word programs that are the
mainstays of Microsoft’s market-dominating Office suite, into
a Web-based product called StarPortal. A Net company like
Yahoo! could include a word processing applet on its site,
so customers could create, store, and distribute memos from
wherever they log on. “Software is going to be delivered as
a service,” says Gary L Steele, CEO, Portera Systems Inc,
an ecommerce company that plans to offer Star’s software.

Office
Threat?

And Sun’s
price is right for cyber executives like Steele. Sun plans
to give the Star programs to companies that agree to freely
dispense the programs to customers across the Net. If it works,
computer users would be able to access their files from whatever
machines they log on from-say, a terminal in a hotel room
or an airport kiosk. Even better, users wouldn’t have to install
new software to add new features. Instead, any time they fired
up the software from the Net, they would automatically get
the latest version. McNealy says he isn’t out to kill Office,
which has more than 95% of the office productivity software
market. But Sun thinks it can start to move customers away
from pricey shrink-wrapped software that is continually made
obsolete by upgrades. Big corporations that have millions
invested in Windows applications are unlikely to switch, McNealy
admits.

“The enterprise
is the last place this will happen,” he says. “It will start
in schools and small businesses.” Still, the odds of changing
the software status quo are far better than they were four
years ago when Sun, among others, put forth the idea of network
computers. Those stripped-down desktop machines were designed
to get programming from the Net, but a lack of software and
plunging PC prices limited the market for such an alternative.
Now, the Online Revolution is in full swing, and millions
of computer users already routinely turn to the Net for programming,
such as Juno Online Services’s email system or Yahoo!’s free
calendar program. So getting full-blown productivity software
off the Net isn’t such a stretch.

Free
Computers

Meanwhile,
a new class of internet software companies has sprouted up
to help push this ‘apps on tap’ approach. Companies ranging
from start-ups like Corio Inc and Digex Inc to giants like
AT&T and US West have set up shop as so-called application
service providers. Their role: to provide programs and service
over the Net. SAP, Siebel Systems, and IBM’s Lotus division
have teamed up with these ASP’s, and a bevy of newcomers are
creating new apps on tap. Forrester Research Inc believes
the ASP industry will vault to $21 billion by 2001.

Hewlett-Packard,
anxious to break Sun’s lock on the internet market, is even
giving away its computers for free to ASPs that are willing
to share a percentage of their future revenues. Once Star’s
software is made more net-friendly early next year, users
will be able to tap these programs from Palm Pilots and other
handheld devices. Sun is expected to unveil a stripped-down
‘thin-client’ computer to serve this market. And even Microsoft
loyalists like HP are following suit. “We see the thin-client
market growing to at least six million units in the next three
years,” says Wolfgang Baltes, GM of HP’s thin-client operation.

Before
the Sun vision of software-on-demand comes into focus, lots
more programmers will have to follow Star’s lead. And the
Net itself needs some upgrading. It’s still not nearly as
reliable a place to find your precious program as the C: drive.
And consumers who depend upon dial-up modems won’t like waiting
for software for such simple jobs as printing out a memo.
But Sun’s purchase of Star is a small but potentially important
step, since it provides a slate of commonly used programs
similar to what mostly people use now.Through its alliance
with Netscape Communications, now a unit of America Online
Inc, Sun also has a range of back-office ecommerce software
that ASPs would use to deliver apps on tap. And its purchase
of Forte Software gives it development tools that ASPs would
use. It just might add up to a formidable challenge to the
old order.

By
PETER BURROWS, with MICHAEL MOELLER in San Mateo,
and STEVE HAMM in New York.
Copyrighted Issue dated September 13, 1999.

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