Gingell: (cont.) Part of the drill that drove both PCs and Unix was the open systems notion that we will lower the cost for you to treat every purchasing decision as an independent one. We only got part of the way there because if you were already invested in a bunch of our products, you were actually bound to SPARC and you have to be kind of pissed at us. You don't have to be really pissed at us because it's not that hard to move. But it's hard enough that you have to be kind of irritated.

In the Java world, where we have the write-once, run-anywhere thing, it may not be perfect, but it so much more closely approaches the ideal in which everybody is actually pretty much the same so that the barrier to switching is practically non-existent--the exception being app servers.

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You can wed yourself to an app server if you really work at it, but most of the customer base doesn't do those sorts of things and have shown that they can jump around pretty easily. That means you, as a vendor, have to be excellent at product execution in order to be competitive in this space. You get no lock-in effect at all. That's why having a company that has the capacity to apply a variety of skills to solve problems becomes really important because it will be as close to ideal as we can imagine. You can treat your machines like cars. If you bought a Ford the last time, there's no obligation to buy a Ford the next time. You have no vested interest in choosing Ford again unless they did something as an enterprise that earned your loyalty at some level.

Tech Update: So, it is a programming war. In this scenario, for the stakeholders out there, how does Sun make its money? Where is its source of revenue? Is it because you are growing the entire world of Java itself, and there's royalty you collect on every instantiation?

Gingell: No. There's a growing market where we supply platform products that people use to deploy applications on. That's what a systems company does. We make our money in the Java ecosystem the same way we made it in the Unix ecosystem. Is it because, as you say, I claim that the reason we made all of the money we made in this space is because of Solaris? Nobody buys our naked hardware. Well, maybe 10 percent of our business is that, but that's really inconsequential. The reason people buy us is because of the total systems package, the personality of which is primarily defined by the software. People want to map our accounting to cause and effect, and I know we annoy people by not doing that. But, you have to ask yourself why customers actually buy this stuff. I don't think they're buying it because of the instruction set.

Tech Update: So, you sold Solaris before. Tomorrow, the personality is primarily one of problem solving?

Gingell: The total network environment. There isn't going to be an operating system for the network in the sense that there's an operating system for computers, but there is a logical set of equivalents to that.

Tech Update: I'll agree that on the server-side there aren't a lot of people solving problems in parts.

Gingell: So, are you saying they do it on the client-side?

Tech Update: On the client-side, people are more inclined to buy a piece of hardware and do whatever they want with it. But today, if I'm an enterprise running servers, I get everything from pretty much one guy. So, if I buy from Dell, they sell me the server and they'll put some Windows or Red Hat on it and now, even a database. In that case, Dell is the integrator of the whole solution. Same thing goes for IBM. They could be that integrator for me. There aren't a whole lot of companies that are just out there selling plain vanilla servers to me and saying "go do whatever you want." So, it does seem like the line between hardware and software is becoming more blurred for companies that were traditionally hardware companies.

Gingell: That's partly why a company that has skills that cross the entire implementation domain can prosper in a world that's gray. We can navigate the entire gray space. If all you know how to do is software, well, that's all you're going to be able to do. Even if that's where the value of the system got defined from, in terms of the personality that made you choose it, these things are more expensive than other things you can buy. Why are we in business at all? There's something else to it. That's part of the value proposition that customers see. It's in that integration that isn't called out in a lot of the comparisons that people make. It's about the integration at some level.

Tech Update: So you're saying that the premise of your business is that in a world that's based on the Java ecosystem, where everything is portable and it's easy to switch, the reason people should go with Sun is that it can solve problems faster and better?

Gingell: Yeah. We know that we won't win every piece of business. In the Unix game, we win 40 percent of that business. Because we don't make the whole world of Unix--and it's a shared world--losing you today doesn't mean we've lost you tomorrow. It's OK if somebody else wins the battle. This was part of Digital's problem and ultimately, it's a part of Microsoft's problem. Digital hit paydirt with the VAX/VMS world, which was the envy of the industry in the 1980s. They did for that what they didn't do for PDP-11s, which was make it so that only they could answer your problems. They lost out on the effects of innovation happening elsewhere.

If they were the only ones who could solve your problems, they had to solve your problems. If they didn't get around to you because they were too busy solving the problems of everybody else who got there first, and you got frustrated enough, you left them in a way that caused you never to go back. You left them architecturally. Our circle is a shared thing and we don't need 100 percent of this [points to the "volume" planet in the Java ecosystem].

Tech Update: But the truth of the matter is that even if you don't have 100 percent of the volume in the Java ecosystem, you still get a cut of the action, right? Java is your IP.

Gingell: Well, we've practically open sourced that anyway. The only difference between JVM licensing and open source is that we say you have to stay compatible. An open source license says that you don't have to stay compatible. Compatibility is actually what the Java community cares about. So if you're going to use our stuff you have to stay compatible. Otherwise, there's no difference between it and an open source license.

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