Hidden Gems

This used to be the subject of many debates in newsrooms, blogs, annual
specials, cocktail parties, techie barbecues...you name it. But those were
different times, when slowdown or recession had not yet become the buzzwords of
the business lexicon. IBM taking over Sun was never ruled out, but even then it
was considered too premature to think about it.

What therefore comes as a surprise is the timing of IBMs proposal to Sun,
and the interest now revolves around whether Sun will accept Big Blues offered
hand. M&A strategists however, may point out that this is the most natural time
for a takeover. So what about the timing? There is so much going on in the tech
landscape that things are in a state of flux. Add to that the natural
uncertainties of a slowdown-induced environment.

Theres the platform war, the race for cloud computing hot seat, the server
war now complicated with Ciscos entry and the advent of open source, which is
sticking out as a sour spot for companies wanting to make it pay. Sun itself
faced it first-hand with first Java and later MySQL (after it acquired the open
source DB player and decided to keep it open).

Suns Potential

Let us take a long-term view. Lets stand back and see what Sun stood for
and how it fits into IBM. I do not know the Indian CEO, let alone Scott McNeally
or Jonathan Schwartz, to tell you whats going on in their minds right now.
However, what I can do is sit with you and pull out those signboards along the
street, which can lead us to some conclusion.

When I heard that The Wall Street Journal has put out a scoop on this deal,
the first thing that ran across my mind were these: Hey, isnt IBM doing more
for Java than Sun and will they now find a profitable business model for MySQL?

IBM jumped on to the Java bandwagon and became its biggest supporter. It gave
the best development environment in Eclipse. It shifted bulk of its product
roadmap to adopt Java. Sun never brought Java in front of a standards committee,
yet it found a great marketing machine in IBM.

In fact, IBM used Java as its cutting-edge tool for enterprise applications,
something that Sun itself didnt do as effectively. Sun alone couldnt have
pushed Java to these levels. And if Java is staying the course against
Microsofts .Net then bulk of the support has come from IBM.

Suns CEO Schwartz was under severe pressure to show tangible benefits from
the acquisition of MySQL. By deciding to keep the present MySQL in the open
source but build a new database platform for commercial use, Sun seems to have
hit a strategy roadblock.

IBM may not help MySQL. It may turn out that MySQL is a major pinprick in its
own DB2 strategy. Yet IBM being conservative, and having the stomach to
encourage competing research that is going on, might help keep MySQL in its
course.

What I am most worried about is some of the key researches that are going on
inside Sun. There are many of them but let me talk about two most visible and
interesting ones.

Revolutionary Research

One is a language development effort by Guy Steele, the man who wrote Scheme
(a dialect of Lisp). Steele is leading an effort to develop Fortress, a
functional programming for the mathematically oriented. The vision of this
language is to reinvent Java in a way mathematicians can use. This has created a
lot of flutter in the languages domain.

The second is a browser-based dynamic programming language called Lively
Kernel, being developed by the legendary Dan Ingalls, who wrote Smalltalk.

Lively Kernel is written completely in Javascript and uses the browser to
deliver a rich multimedia web experience. You can create dynamic and highly
interactive web content. All these are developed using your good old browser.
This is dubbed as Smalltalk in a browser. It can be a coincidence that Ingalls
will now be on IBM rolls where Smalltalk thrived before Java replaced it as the
language of choice.

Then there is StarOffice. Though the desktop war is over and the action has
moved over to cloud computing, technologies mastered and lessons learnt in the
desktop arena can bring the winning edge when companies are migrating to the web
paradigm. Googles last two outages have shown that an offline strategy is a
must as a backup. Microsoft wisely hasnt shifted focus from its desktop
products as it is prepping for Azure and other wares for cloud computing. (Sun
today announced its cloud computing strategy which will definitely help IBM).

Coming back to StarOffice, Sun finally found a jolly good product that could
stand up to MS Office suite. OpenOffice borrows a lot from StarOffice and
something, which IBM has failed to replicate in its Symphony.

These are but small fries and people might be wondering why M&A deals would
be based on such flimsy stuff. The point is there are a number of Sun Fellow
engineers who are pursuing such niche products and technologies, which can
become the next big thing. When James Gosling and company were working on Oak,
none imagined it would rule the world as Java.

In a way IBM will be gaining all these wonderful things that are happening
inside Sun. IBM is a company which is known for nurturing research talent. Yet
philosophies may change and cultures may differ and this is something not our
concern.

There are, of course, large uptakes Sun will bring. Some conflicts too. Sun
Solaris will conflict with IBM AIX. But IBM will gain all the server hardware
portfolio of Sun. It will also gain the storage portfolio and the cloud
computing portfolio, where IBM is a weakling.

We are not looking at the larger and immediate benefits. We are only worried
here about some of the hidden gems in Sun labs. Small projects tend to be axed
first since it is difficult to find its value to the company in the medium term.
I am not sure how much of long-term views M&A deals will eventually bring to the
table.

As we go to press, IBM is only talking with Sun. If I were doing this deal, I
would have bought Sun for its hidden gems and its contrarian outset to business.
Only Sun could live with Java without making much money out of it for so long.
Only Sun could go ahead and pay one $1 mn for MySQL, which wouldnt bring in any
revenues. Only Sun could have the temerity to ask people to call it the cloud
company. Remember its bold dot in the dotcom slogan. (Well IBM had the e
in the e-business slogan).

Heres raising a toast to all the little hidden gems inside Sun and hoping
they live on and make it big.

Prashanth Hebbar/CIOL

maildqindia@cybermedia.co.in