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Sun's McNealy swings at rivals

The feisty CEO puts up his dukes in a speech that jabs at IBM, Red Hat, Microsoft and Congress.

SAN FRANCISCO--Scott McNealy, the Sun Microsystems chief executive who has become something of a punching bag as his company fights back to profitability, threw some punches of his own on Tuesday.

In a keynote address at the JavaOne trade show, McNealy offered scathing criticism of Congress and legislation that would require stock option grants to be counted as expenses, and blasted several technology competitors. He voiced "outrage" over Microsoft's virus-prone software, jabbed at Red Hat for avoiding the Java Community Process that governs the software, and lambasted IBM for not releasing enough of its software to the open-source community.

"Sun's really good at finding someone to be against," and the motivation works for the company, said Illuminata analyst Jonathan Eunice. Today's behavior is in many ways a return to a company style that was thrown off course by its sudden success in the late 1990s. "They got really sloppy and arrogant when they were on top."

Sun is struggling with declining revenue despite a return to growth in the server market, and it has been labeled irrelevant by some competitors. But Sun is comfortable with underdog status and, always a fighter, never shies from bold assaults on its rivals.

"Sun's really good at finding someone to be against."
--analyst Jonathan Eunice
of Illuminata

To recover from its current troubles, Sun embarked on a plan to sell its hardware, software and services as subscriptions; embraced Advanced Micro Devices' Opteron processor; and cooperated with Fujitsu for Sparc processors.

Not every move is constructive, Eunice suggested, saying the public wrangling over Java's best interest isn't in the best interest of the technology. "I would like to see less jostling between them. The real enemy is not each other," he said, it's Microsoft and older programming languages such as C, C++ and Cobol.

The Big open-source Blues
McNealy swung hard at IBM, whose chief executive has called on Sun to release Java as open-source software.

"We want IBM to start donating its own intellectual property to the community," McNealy said. "You need a little more than that hammer and chisel. Get the bulldozers out, Sam. Stop writing open letters to the No. 1 contributor in the open-source community."

McNealy said IBM's motivations are simple. "I believe they have Java envy, and they wish they were the steward, and they wish they had invented it," he said. "I think they'd love to wrest control...away."

IBM declined to comment on McNealy's criticisms.

But Big Blue isn't entirely without open-source credentials: In addition to employing hundreds of Linux programmers and embracing the Apache Web server software early, it released its Eclipse development tools as open-source software and helped attract support from many companies.

The JCP wants you
The two companies conspicuously absent from the JCP are Microsoft, which has a Java-like technology of its own called .Net, and Red Hat, the Linux seller that's expanding to sell the Jonas application server from ObjectWeb to run Java programs on servers, McNealy said.

"I'd encourage both these organizations to come to class and participate. I think the community and planet would be hugely leveraged if we could get the two of them to support where we're headed," McNealy said.

Red Hat responded with an implicit criticism of the JCP. "Red Hat participates in broad, community-based, truly open-source projects," the company said in a statement.

McNealy defended the Java Community Process, a multiple-company effort that resembles a standards body but which still leaves Sun with Java control.

"I think the JCP is far and away the most successful community-development experiment in the history of technology," McNealy said. Fifty-five companies have submitted Java Specification Requests to take Java in new directions, and "over half the JSRs are led by non-Sun folks," McNealy said.

Mad at Microsoft
McNealy said he was surprised the market doesn't share his fury at Microsoft over the security flaws that have been exploited by hosts of malicious software.

"Where's the outrage on viruses? I don't understand. Just in the first quarter there were losses of $300 billion for worms and Trojan viruses. We call them worms and Trojans, but they're Microsoft viruses," McNealy said. "If you write proper Java applications, we have solved Ebola, anthrax and mad cow."

"We haven't played this up a lot, but no one's written a virus in Java."
--Jonathan Schwartz,
Sun's chief operating officer

The origin of McNealy's damage estimate wasn't immediately clear, but conjuring numbers for such financial effects can be something of a black art. Analyst firms have produced varying estimates of virus costs, and have said events such as the Webcast of a Victoria's Secret underwear fashion show cost $120 million in lost productivity.

Sun's new chief operating officer, Jonathan Schwartz, chimed in on the security issue. "The way we architected the Java platform was on the assumption that there would be bad people out there. We needed to ensure we made it difficult for bad people and bad code to do harm to others. We haven't played this up a lot, but no one's written a virus in Java," he said.

A Microsoft representative declined to respond to Sun's specific criticism, but pointed out that Chairman Bill Gates says Microsoft is making security progress.

McNealy also spent some time explaining Sun's partnership with Microsoft to the Java loyalists.

As a result of the first-phase interoperability work from Sun and Microsoft, "users can sign on once and have their authentication travel across Sun and Microsoft environments," McNealy said. "This summer or late summer, I expect to have phase one announced," McNealy said. The next stage is getting Java and .Net to work together.

But Sun's loyalties still lie with Java--even when it comes to games and other taxing applications. "There is no application written in C++ in the game space that Java cannot do," said Chris Melissinos, Sun's chief gaming officer.

Taking stock
McNealy has long been a foe of plans to require companies to record stock options as an expense.

"We can't let this world be run by accountants, for God's sake."
--Scott McNealy, Sun CEO

"Congress is running around, about to skewer one of the most innovative pieces of technology in America," McNealy said. "They got the accounting wrong, the valuations wrong, the motivations wrong. We can't let this world be run by accountants, for God's sake."

Ninety percent of Sun's stock options go to rank-and-file employees under the vice president level, he added. "Legislating them (stock options) out of existence is not the way to solve the bad CEO problem," he said.

Sun employees participated in a Silicon Valley rally against stock-option expensing last week