Sun Sees “Service-Driven Network” as the Next Generation

Sun Microsystems Inc. President Ed Zander said Tuesday his company’s acquisition of StarDivision, a supplier of open source productivity applications, is not about competing with Microsoft on the desktop.

“This is a network-economics play,” Zander said this morning at a New York press conference where Sun management unveiled its strategy for using StarOffice as the centerpiece of building a “services-driven network.”

“We’re seeing a second generation on the Internet,” Zander explained.” In 1995, it was about the network, in 1999, it’s about services.”

Not only will Sun (SUNW) offer the StarOffice suite of applications at no cost from its Web site and encourage PC manufacturers to offer StarOffice bundled on their computer systems, Sun also hopes to encourage a new generation of developers to create new appliations using the StarOffice open source code.

Whereas Office is only available for Windows and Macintosh computers, StarOffice will also run on several Unix variants including Linux and Sun’s Solaris.

Zander said that when developers succeed in creating commercial products with StarOffice code, “in some cases we will ask you to share revenues, and in some cases, such as government or commercial use, we will not.”

Sun officials maintained that StarOffice’s is capable of becoming the center of a network-centric applications platform because it is matches Microsoft Office on features, is capable of accessing all Microsoft Office file formats and is completely network aware. It has lined up a roster of partners, including Digex Inc., AT&T Corp. (T), EarthLink Network Inc. (ELNK), GTE Services Corp. (GTE) and Red Hat Inc. (RHAT), who plan to offer services supporting StarOffice for distributed applications.

Zander acknowledged that Internet bandwidth is not yet sufficient to support the type of distributed computing he envisions but he said that with bandwidth “doubling every year” and new access technologies like DSL and cable access coming on line, Sun is preparing for a future he believes will be here within a few years.

Scott McNealy, Sun’s chief executive officer, downplayed the possibility that consumers may have privacy concerns about storing sensitive data files on remote computers.

“You don’t keep your money in a mattress, you put it in a bank and leave it with professionals. And that’s what you’re going to do with your personal data. You’re going to store it on the network where it can be managed by network professionals.”

Explaining why Sun was willing to give away a software product comparable to Microsoft Office, McNealy said, “This sells servers and that’s going to a wonderful end game for us.”

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