Date: January 31, 2005
Publication: Securities Industry News By: Maria Trombly, Technology Correspondent

Sun Tries GNU Tactic

In a move designed to attract swarms of academics, hobbyists, corporate developers and other volunteer programmers to the Solaris fold, Sun Microsystems has decided to open the source code of its flagship operating system and donate 1,600 related patents to the public domain.

Sun's decision could bode well for some Wall Street IT departments, but probably not in the way that Sun intends or would prefer.

Rosenblatt Securities, for example, is one of a growing number of firms that has switched almost entirely over to Linux and Windows. Rosenblatt keeps some Sun boxes around for "historical reasons," according to CTO Ahmed Sako, but the firm isn't about to start moving back to Solaris.

Instead, Sako says, Sun's decision to open source Solaris is good news for him because there are a few high-end Solaris features he's very much interested in. "I would prefer to see those advanced features available on Linux," he said. Over time, Sako says, he expects to see those features migrate over.

At a conference for reporters and analysts last week, Sun CEO Scott McNealy acknowledged the possibility that this might happen, but said that the benefits of open sourcing outweighed the risks.

"Solaris is easily the number-one operating system on the planet in terms of functionality, enterprise readiness and scalability," McNealy said. "You take any feature you want and across the board, it's the best OS on the planet, bar none."

With the move to open source, the barriers to entry come way down, McNealy said. Colleges and governments that prefer to deal with open-source software will be able to download Solaris for free off the Web and fiddle with it to make it better. This means that Wall Street users will enjoy more features and more applications written for Solaris, he said.

Double Indemnity

In addition, Wall Street open-source developers will be able to tinker with Solaris themselves and optimize it for their environments. Of course, all of that is already true for Linux.

There are, however, two major differences between Linux and open-source Solaris.

One is indemnification. Linux users are currently at risk of being sued by companies like Utah-based SCO Group, which claims that some of its proprietary Unix code has made its way into Linux. SCO doesn't want the code back, but it does want users to pay license fees.

McNealy guarantees that open-source Solaris will be lawsuit-free. "It allows users to operate in a safe-haven environment," he said. "The intellectual property patent situation in software is at best confused, certainly random, and arbitrary to a lot of folks."

The other major difference is the Solaris licensing model. Linux is released under the GNU General Public License (GPL), which requires that any modifications or improvements be donated back to the open-source community. McNealy described the GPL as a "viral" licensing model.

Sun's Common Development and Distribution License (CDDL)--known as "Cuddle"--also requires that all improvements be donated back to the public domain, but places slightly fewer restrictions on what counts as an improvement. For example, according to McNealy, Solaris code can be combined with other code so long as the Solaris source files aren't themselves modified; the new code can then be given proprietary status.

Dan Kusnetzky, an analyst with International Data Corp., describes the Cuddle license as "equitable, very well-crafted and very well thought out," but says that the differences between it and GPL aren't as stark as Sun is saying. "The newest provision of GPL isn't as viral as they're presenting," he said.

All in all, Kusnetzky said, Sun's move isn't likely to bring back Linux adoptees like Sako, or attract the kinds of developers who make Linux such a vibrant phenomenon. "It's possible that this move, being rather dramatic, might cause the attention of the market to come back to Sun and cause Sun's sales of products and services to increase," he says. "We don't think it's a strong possibility, but it's possible."

In fact, Kusnetzky agrees with Sako that the opposite may be just as a likely. "It's possible that what Sun is doing will feed Linux rather than feeding Solaris," he says.

For example, Linux has grown far beyond the abilities of amateur hobbyists, Kusnetzky says. "Scaling, clustering, parallel processing architecture--the folks who know how to do this stuff work for major corporations," he points out. "These companies actually have developers on staff whose job it is to contribute to the Linux kernel--but none of these people are likely to contribute to open- source Solaris."

The reason, Kusnetzky says, is that companies like IBM and HP can make money reselling and servicing Linux but are not likely to make much money off of Solaris.

Setting Solaris

There are also doubts that Sun will continue to invest in an operating system that it can't sell. "They're going to have to prove--to demonstrate to the marketplace--that they're going to keep Solaris," insists Damon Kovelsky, an analyst with Financial Insights.

Sun's other choice would be to become platform agnostic and transform itself into a services company, like IBM. That, however, presents another set of challenges. "To become like IBM they need to have a consulting arm, and they don't have that at all," Kovelsky says.

Meanwhile, the availability of open-source Solaris may make the operating system more attractive to developers writing applications for Intel machines, but it will also hurt Sun's high-end hardware business, Kovelsky believes. "It's self-defeating because so much of their money comes from selling Sparc processors," he says.

In any case, Sun may be waning as a hardware company. Commodity x86 servers are moving up the value chain even as grids are taking a bite out of the market for the very biggest machines.

"I'm not optimistic about Sun's future in the hardware business," Sako says. "For a number of years, they've suffered from a declining quality of their hardware offerings. And they're trying to make a push into the Intel platform, but they're not a large enough player to have some of the economies of scale that some of their competitors have."

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