Menace to mankind, genius, antitrust opportunist, geek, devoted dad--Bill Gates has been called many things over the years. Sun Microsystems Inc., however, is probably the first to compare the Microsoft Corp. chairman to Ginger Rogers.
Fred Astaire's partner was a wonder on the dance floor, an essay on Sun's Web site declares, but "following someone else's lead--no matter how skillfully--simply doesn't cut it."
The inspiration for the attack was Microsoft's recent declaration that it was dedicating itself to creating software that would be liberated from the desktop computer and run any time, anywhere, on any type of electronic device. That's been Sun's stated mission for a long time. "We feel," the essay concluded, "as if Ginger just stepped on our toes in those lovely but painful stiletto heels she used to wear."
Yesterday, Sun stabbed back, formally unveiling its acquisition of Star Division Corp., a software maker whose products aim to let consumers and companies do all of the things they can do with Microsoft's Office software--write letters, run spreadsheets, send messages and so on.
There are two crucial differences:
* StarOffice won't need to be on your computer. In a form planned for introduction in several months, it will reside out on the Web. Users will be able to connect to their company's server or commercial sites on the Web and use it there, much as they do today with personal calendars and portfolio managers. At present it must be downloaded to a personal computer before use.
* It's free.
"Under the old rules, you had to buy software in a shrink-wrapped box, install the application, fiddle with a bunch of install routines, and most likely reboot your system," Sun chief executive Scott McNealy wrote on the site. "And once you got used to the application, it would be time for an upgrade. More money, more reconfiguring, more rebooting, and ongoing compatibility issues."
Microsoft's market power is best known in its Windows operating system. But it has similar clout in the huge and highly profitable market for the basic software of the white-collar workplace. More than 100 million licenses for its Microsoft Office "suite" have sold over the years; the product accounts for 80 percent to 90 percent of the market for such business programs and brings in directly at least $3 billion in revenue to Microsoft annually, and more indirectly.
"It's one of the keystones in the Microsoft portfolio, along with the Windows operating system," said Giga Information Group analyst Rob Enderle. "If they lost them both, Microsoft wouldn't be Microsoft anymore. They're being challenged right at the foundation."
With StarOffice, Sun is targeting that market, hoping that the arrival of the Internet has changed the rules sufficiently to make Microsoft's product vulnerable. Other companies such as Corel Corp. and Lotus Development, challenging it the old way with PC-based suites, have failed.
Star Division was founded in 1985 in Germany; even after a move to Silicon Valley last year, most of its 4 million users are in Europe. Sun's purchase price for the privately held Star Division was not disclosed.
Sun hopes to make money on this deal by selling technical support and by driving business to its line of Solaris servers that can run the software. A Web portal, for instance, would make StarOffice applications available to its users, while contracting with Sun to run the back-end functions.
In ads for StarOffice, Sun takes direct aim at Microsoft, asserting the newcomer has all the advantages of Microsoft's Office 2000 and is compatible with it but is also compatible with the Linux operating system. Linux is the most significant competitor to Microsoft's Windows in a long time.
If Sun doesn't mess it up, analysts said, StarOffice could make decisive inroads against Microsoft.
"It's a savvy combination of the next logical step in Sun's vision of networking the computer, and a step which just happens to begin to pull the rug out from Microsoft's business model," said Technology Business Research analyst Joe Ferlazzo. "So it accomplishes two goals that are near and dear to Scott McNealy's heart."
Ferlazzo offered this scenario: "America Online has been making noises about teaming up with a personal computer vendor and providing AOL PCs. So AOL could give away an inexpensive PC with a Linux operating system and an AOL look and feel on the desktop. When you want an application--word processing, say--you would go to the AOL browser and download the StarOffice application. So AOL wouldn't have to deal with Microsoft at all. It would be that end run it has been searching for."
One potential customer, AT&T Internet Services, sounded enthusiastic yesterday. "This is the next evolution in software," said President Kathleen Earley. "It started on the mainframe, then went to client servers, then evolved to personal productivity tools. This is the beginning of network application software being designed and created for the World Wide Web."
If consumers and companies want to get their software over the Web, Microsoft will adapt, a company spokesman said yesterday. "We'll play in that space," said George Meng, a group product manager. "Microsoft has no plans to make its office applications available for free in the way Sun is proposing. But we are looking for ways to deliver it so people can use that application over the Web."
Microsoft might be vulnerable now. At a Giga Information Group convention in June, information technology managers were surveyed as to which one company they would most like to stop doing business with. Three-quarters of them picked Microsoft from a list that also included IBM, Sun, Hewlett-Packard Co., AOL/Netscape, Dell Computer Corp. and Compaq Computer Corp., which got the No. 2 spot, with 11 percent.
The negative opinion of Microsoft "was the worst I've ever seen for any company," analyst Enderle said. "Back in the late '80s, IBM had the highest percentages, but they never crossed the halfway point."
While the survey wasn't a rigorous poll, it suggested that Sun's initiative "couldn't be timed better," Enderle said. "With the dissatisfaction toward Microsoft as well as whatever the Justice Department is doing to cripple the company [with its antitrust suit], Sun has a window."
While Enderle noted that Sun had a "spotty" record of executing software, he said the company has advantages in this fight that its predecessors lacked. For instance, Microsoft can't simply counter Sun by giving Office away, because it depends on the revenue stream that it brings in.
Word-processing software such as Microsoft's typically resides on a computer's hard drive ...
. . . but Sun Microsystems is planning to make computer functions available through the Internet ...
Among office tools provided:
... which could boost demand for its servers, the machines that run computer networks.
Sun Microsystems wants to wrest market share from Microsoft:
Market share for "Office Suite" word processing, spreadsheet and presentation software.
SOURCE: Bloomberg News