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.