Free software and offshore outsourcing make waves
By David Berlind, Tech Update
February 12, 2004

ZDNet reader Gary Woodman from Australia has been challenging my conclusions from LinuxWorld that Sun may have little choice but to acquire some additional software stack components, such as MySQL and Zend (the PHP guys). In a recent e-mail, Woodman wrote, "Sun feels, as most would, that it doesn't need its 'own' database; if it's not happy with Oracle, it could forge an alliance with MySQL, sponsor PostGres or Firebird, or build on its relationship with Software AG. Sun could have an enterprise-class database if it wanted one. My feeling is that Sun is just acknowledging that there are plenty of good ones for their customers to choose, and that it's an uphill battle enough to try to sell people on Sun hardware and OS without the person-years of redevelopment that changing enterprise databases would require."

Woodman raises a valid point about Sun trying to maintain a certain amount of neutrality, but that neutrality is becoming more difficult to maintain as Sun's rivals compete on some fairly unorthodox terms. To respond, particularly to IBM and BEA, Jonathan Schwartz, Sun executive vice president for software, recently told me how Sun is already giving away its Java 2 Enterprise Edition (J2EE)-based Application Server 8.0.

Aside from the soul-searching question of whether IBM, BEA and other current J2EE vendors would have embraced Java years ago if they knew that somewhere down the line, Sun would end up giving away a J2EE server, the now-burning question that I keep coming back to is whether a free Java application server can really put the heat on IBM and Microsoft. Ask yourself, as an IT buyer: Is a free application server a sufficient motivator?

If Sun really wants to take a swing in this game of hardball against both IBM and Microsoft (the latter of which already gives away an application server, in a manner of speaking), it will need some of the other key stack components (namely, a relational database management system and a scalable enterprise class e-mail offering that's Intel compatible and an easy migration target for Microsoft Exchange or Lotus Notes shops). Depending on what competitors do, Sun may have to "raise" the stakes by giving away those stack components as well.

All the freebies that come with the hardware can be good for IT shops, as long as you aren't locked into any particular vendor's software stack, and that the components are among the best of breed for enterprise-class solutions.

Sun appears to be taking a similar approach to IBM and HP these days. With dwindling profits coming from their waning big iron businesses, IBM and HP have been embracing the low-margin, x86-based server market and transitioning their businesses to high-margin areas where the offerings are less commoditized, additional value can be added and, quite frankly, where new addictions can be created. These areas include services (outsourcing, utility-model hosting, maintenance, etc.) and software that increases the value of their hardware to customers (clustering, grid, high availability, provisioning, security, and management).

Lately, Sun, which in addition to transforming itself into an IBM/HP-like x86 integration shop (sans Windows), has been turning up the heat (and in some cases, like outsourcing, playing catch up) on all those fronts. But to really throw the gauntlet down, I think, Sun must up the ante on what gets given away. To break the grips of companies like IBM and Microsoft and reel in customers, the company should bundle databases and e-mail. It's for this reason that the small companies (like MySQL, ZEND, and e-mail newcomer Scalix) I've seen with great products are not likely to stay independent for very long.

So what's the good news, bad news about this trend? The good news is the same as it has always been for this decades-old pattern of driving down the cost of computing (remember when just the spreadsheet was $500). Some of the traditionally expensive parts of your shop will not only be better, more reliable, and more secure than they have been, they'll be remarkably cheaper.

The bad news is that your solution providers are constantly evolving new to hook you on their often proprietary, high-margin product and service offerings. The additional bad news is that, in the search for profitability, a lot of the work to create these addictive offerings is being shipped overseas. Speaking of outsourcing...

Offshoring is all good? Tell that to ZDNet's readers, Mr. Bush.
Whenever I write about outsourcing, I get tons of letters from out-of-work IT professionals saying how bad it is out there. I also get e-mail from would-be IT pros asking which baskets to place their eggs in now that the IT profession isn't looking so lucrative.

More recently however, my inbox has been peppered with e-mail from out-of-work techies who were angered by recent remarks from the Bush administration that appear to support the export of U.S. jobs. Those remarks came from N. Gregory Mankiw, the chairman of President Bush's Council of Economic Advisers who, as he released his Council's annual economic report earlier this week, said that the exporting of U.S. jobs overseas was "just a new way to do international trade." The report goes on to say, "when a good or service is produced more cheaply abroad, it makes more sense to import it than make or provide it domestically."

But the Bush administration's posture isn't resonating with folks like veteran Bill Tonn from St. Louis, Missouri, who left behind his job as an electrician to seek an education and career in information technology.

"In 1998, I left my job as an electrician to get a degree in computer science in order to better myself, my family and to make more money," Tonn said. "I still have not been able to enter the industry in a professional capacity. I am currently unemployed and have been looking for work for five months now. At 44, I'm really wondering if I have made a big mistake."

In his letter, Tonn goes on to describe how he feels cheated by the country that he and his father swore to protect: "My father is a WWII veteran. He protected this country, was given a free education, and had a career of more than 20 years. He helped his kids and has a good retirement. His actions gave himself and his family a better life. His own country helped to do this. I served in the Air Force during Desert Storm. It helped pay for a little college but not much. I was told that veterans have job preference in this country. My question to whomever wants to hear it is, 'If the people who fight and defend this country are going to be systematically swept under the corporate rug for cost-cutting measures, what is there left to fight for?' My father and my generation have honored our country by giving the best years of our lives to it, and to have other countries reap these benefits cuts very deep. Another factor is that U.S. workers aren't offered first refusal on these jobs. These large corporations have undermined the American people. So I will be in the street begging for money while the Indian, Iraqi, and Singapore people that I gave my job to put a nickel in my cup."

When I asked Tonn if I could publish his thoughts, he replied, "It will help to know that at least one other person knows how I feel." Judging from my e-mail, Tonn is not alone. In the name of some profitability and shareholder value for domestic companies, offshore outsourcing seems to be a sacrifice that must be made to employ the U.S. workers that they do. Otherwise, if they can't be profitable, then what's left of their domestic workforce could be out of work as well.

No easy answers come to my mind. Write to me if they come to yours.

You can write to me at david.berlind@cnet.com. If you're looking for my commentaries on other IT topics, check the archives.