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McNealy: Going for all the marbles

Late to the party, Sun Microsystems' CEO predicts his company's Web services plan can still whip Microsoft's .Net in the market.

Sun Microsystems CEO Scott McNealy, well known for ribbing Microsoft, makes no apologies for unveiling his company's Web services strategy eight months after the company's archrival announced its .Net version.

Instead, at a press conference in San Francisco announcing Sun Open Net Environment (ONE), McNealy teasingly dubbed the Microsoft.Net Web project to turn software into a Web-based service "Not-Yet." At the same time, he defended Sun's dominance in the Web services market.

"We've been doing network services since we got started," he said. That was followed by a brief video where a weepy family in a hospital emergency room says their final goodbye to a dying PC.

McNealy touted Sun ONE products and development tools for their use of Java and XML.

"You can integrate in other pieces of technology other than our own," he said. "We will not do what Microsoft does. (With Microsoft.Net) it's not integratable; it's welded shut."

We've been introducing Web services since day one...Where was Microsoft in all of this? This is classic revisionist history. In an interview with CNET News.com's Cecily Barnes and Wylie Wong, McNealy--in his trademark outspoken style--addressed Sun's ONE announcement as well as issues surrounding Linux, the future of Unix sales and iPlanet, the Web services offshoot of Sun and America Online's Netscape division.

News.com: With Microsoft's Web services announcement eight months ago, it's been said that you guys are following Redmond, or are just late to the party. What do you say to this?
McNealy: We've been introducing Web services since day one. TCP/IP has been on every computer we've ever shipped. All of the network services that are available from Unix, all of the Java network services, Jini network services, XML, data representation services--the network is the computer.

Where was Microsoft in all of this? This is classic revisionist history, even though we've been talking about this forever.

Is Sun turning into a software company?
Why does everybody always ask me that question? It's beyond silly. We're a systems company. It's in our name--Sun Microsystems--not just hardware, not just software.

Motorola has shipped cell phones with a million lines of code in them. Do you see them turning into a software company? Do you go ask (Motorola CEO) Chris Galvin if he's turning into a software company? I look at Linux as yet another Unix; it's very Unix-like in all our software...It's a kissing cousin. I don't think Solaris and Linux would be allowed to marry. There's a hundred microprocessors in an automobile, and they all run software. Do you go ask the head of Ford, 'Are you turning into a software company?'"

Do you see Linux as a competitor or an ally?
We're the No. 1 Linux server appliance manufacturer that I know of. Cobalt's Linux appliance is as far as I know the No. 1 server appliance in the marketplace.

I look at Linux as yet another Unix; it's very Unix-like in all our software. It's a kissing cousin. I don't think Solaris (Sun's version of Unix) and Linux would be allowed to marry.

Do you see it eating into Solaris sales at all?
I see it expanding Solaris sales. Anytime a Unix-like environment wins, it just creates more market opportunity for the Unix variants and less for Windows and mainframes and Macintoshes and other environments like that.

How much involvement does America Online have in the iPlanet software division?
I think there are 3,500 folks in the organization. Around 750 or 800 of them are AOL employees; the rest are Sun employees. They help us with making sure the design center is focused on billions of users, not thousands of users. They need scalable directories, scalable messaging, scalable application servers.

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Sun chief outlines Web-services strategy
Scott McNealy, CEO, Sun
Do you see it as more of a partnership, or do you expect to buy them out?
We see it as a partnership where if it continues, it could go on indefinitely. It depends on what they want to do. I think it's an incredibly successful product line right now. And as you'll see, it's kind of the lead warhead in the Sun ONE announcement.

Intel used to define Advanced Micro Devices as its main competitor and now has defined Sun as a key competitor. Do you see them as a threat, too?
Not at the systems level. We see them at the chip level, always have. I don't know why they would say that. (Grinning) Canon and Kodak would be their big competitors--I just saw that they launched a camera...

No--no more so than ever. They've always been there; they'll always be there.

PC folks are saying that by 2005, Unix sales are going to fall below Windows NT sales in terms of revenue. What do you make of this?
I could give you analyst reports since 1982 that say Unix sales are going to go away, and they have been dead wrong every time.