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DATE | 2004-04-07 |
FROM | Ruben Safir Secretary NYLXS
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SUBJECT | Subject: [hangout] Analysis of Sun/MS settlement by the Financial Times
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Microsoft and Sun heed the customer Published: April 8 2004 5:00 | Last Updated: April 8 2004 5:00
There is both more, and less, than meets the eye to last week's unlikely rapprochement between two of the computing industry's deadliest rivals. The sight of Microsoft and Sun Microsystems burying the hatchet could mark a watershed for the young computer industry - though a history of distrust between the two still leaves ample room for disappointment.
This certainly looks like a symbolic moment. Four years after the technology bubble burst, the big technology suppliers have heard what their customers are screaming: the computer systems on which companies and governments rely have grown too complex and expensive to manage. By promoting rival technologies, Microsoft and Sun have added to the mess.
Along with paying $1.6bn to settle Sun's antitrust and patent infringement claims, Microsoft has now promised to find ways to link its own software more seamlessly to Sun's. Since Sun is the guardian of the Java computer programming language, used by all of Microsoft's main rivals, this could have a big impact.
It took the arrival of a radical new alternative, in the shape of the free Linux computer operating system, to bring about this attack of good sense. To justify the prices they charge, Microsoft and Sun must do a better job of getting their supposedly superior technologies to work together. If they fail, the alternative vision promoted by International Business Machines will predominate - one that relies on a layer of specialist "middleware" software and armies of consultants to glue together coherent information systems out of Linux and other technologies.
For Mario Monti, Europe's competition commissioner, the alliance is a reminder that technology markets do not stand still. Part of Mr Monti's anti-trust ruling against Microsoft last month was based on a five-year-old Sun complaint that Microsoft should let competitors connect their own technologies more easily to its ubiquitous Windows PC operating system. Sun has now weakened Mr Monti's case, though other Microsoft rivals are not in the same privileged position.
If this signals a new era of co-operation in tech-land, it is welcome. But there are two caveats. One is that, despite the promises to co-operate, there are few concrete results so far. Suspicions will linger that this is a figleaf for both companies: Microsoft will be able to show a gentler face to regulators, while Sun bows out of a distracting legal fight.
The other caveat is that, while both companies claim to be committed to open technology standards, they may be tempted to try to use this detente to protect their profit margins, bolstering their proprietary technologies at the expense of other competitors. Customers are demanding a different approach: they want an end to the Balkanisation that has added to the cost and reduced the utility of their information systems. Technology companies ignore that at their peril.
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