Sun Microsystems sent their CEO, and he’s clearly the best CEO speaker I’ve heard at a long series of these events. He speaks, teaches, amuses, and of course, sells pretty much continuously, and keeps to a schedule. Scott McNealy is clearly in touch with the real world. And he has made the transition to open source, completely and emphatically. He’s giving away Sun’s intellectual property, online, in-person, everywhere. Just before FOSE, he returned from a trip to China, where he told the Chinese government that he would provide, free, Solaris and Java software, and development help, and the Ultrasparc high-end processor plans, so that China could build their own hardware systems and provide automation services to their economy. He has made a similar proposal to Germany and some other countries–not all countries are ready for such a proposal, he says, with skills, but not enough technology already in place. Free.
His talk was all about Open Source; it would have worked just as well at a developer’s event as at government talk. His main point: Sun makes money giving away all their intellectual property, and then selling services and contracts. There are five public reasons he pushes open source. A sixth, unmentioned, is surely that expanding markets for open source expands markets for Sun Microsystems–they’re clearly a large enough player to benefit from that type of marketing.
1. There is no barrier to entry for users of open source products. Selling a prototype project to a corporate purchasing department shouldn’t start with requests for funding for software, just to see if what’s needed is possible. Just download it, and get started.
2. Increased interoperability. The source is out there, so there are no proprietary formats; every competitor is free to copy how you’ve done processes, and link into them, or add functionality.
3. More Research & Development. A closed source development project might have 5 programmers, or 30, working on it, he says. In open source, testing and bug fixing is open to a world of interested parties. It’s all extra help for the R&D staff.
4. More Secure. For the same reasons, open source is tested and hacked by the world before being declared as ‘done.’ There are no hidden secrets, it’s all out there to see, before deployment.
5. No barrier to Exit. There are no service-level agreements forcing years of product upgrades to future versions, site-unseen, and no site licenses in open source; there are no contracts to tie down a corporation or a government to continue using a product that’s last year’s bad news.
Sun is making money, lots of it. McNealy’ opening joke was that he stopped by Washington DC to pickup his $600 tax rebate check, and to deposit a few million $ for his 2007 tax bill. Open Source is clearly working for Sun–they claim to be the world’s largest provider of it, and they’re profitable even after spending huge amounts to defend themselves and their clients against software patent claims. They don’t start law suites over intellectual property, but they do defend, vigorously, and half their winnings go back to an open source legal defense fund.
Sun competes on the basis of providing service to clients. Their model sounds closer to that of a service company than to a software publisher. Scaling their model down to the level of a microISP is clearly challenging; some software developers are already working on the basis of custom installations and ‘whatever-you-need for a fee’ service. More will clearly have to work that way in the future.
McNealy closed by giving away a large stack of software CDs to every attendee, but remember that this is to a US Government audience that can’t accept gifts valued above $20. “It’s worth $8 for all the plastic. The content is available for free at developers.sun.com. I’m just saving you download time.” He doesn’t stop selling. Ever.