Something to discuss with work colleagues, etc, when the discussion turns to Open Source and whatever use is it to us?
Wesley Parish ----- Forwarded message from Christian Einfeldt <[EMAIL PROTECTED]> ----- Date: Tue, 6 Jul 2004 19:06:43 -0700 From: Christian Einfeldt <[EMAIL PROTECTED]> Reply-To: "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> Subject: [discuss] Look who's disrupting now: Sun To: "[EMAIL PROTECTED]" <[EMAIL PROTECTED]> This snip below was taken from a press piece on the Sun site. It's an interview with Sun President and COO Jonathan Schwartz. It's called "The bubble was just a proof of concept." Jonathan tackles disruption head on. http://www.sun.com/2004-0706/feature/ IMHO, Joe Sixpack needs to understand why OOo is still going to be here tomorrow. How many times have we heard people, particlarly in North America, say that OOo must suck or be stolen because it is free? Joe Sixpack is going to be more likely to use OOo if he understands how companies supporting OOo upstream are benefitting from OSS, including Sun. "Sun President and COO Jonathan Schwartz says that as computing becomes a commodity, the opportunities become bigger than ever." This is the point I think that Microsoft is missing. And I think that Sun has at least as good a chance as IBM or HP of taking market share from Microsoft. Microsoft doesn't have a strategy to address the commoditization of computing. I think that this article shows that Sun does that strategy. [Jonathan]: "If you look at the history of Sun, we've always stood for a few core values. One of them is that open networks enable innovation and market opportunity. It's the concept of a rising tide lifts all boats. Second, our technology differentiation--building better systems that bring together hardware, software, and the surrounding support technologies--enables us to not only participate in that, but participate at the expense of our competitors in the growth of the network." In his second book, the Innovator's Solution, Christensen says that commodization drives value to the layers around the commodity. Sun, IBM, and HP have plans to take advantage of that shift in the value. When the IBM PC was commoditized, Microsoft was there, along with Intel, to suck up the value which was driven to the key components of the box, the operating system and the chip. The operating system and the office productivity suite now are commoditized, and Microsoft has no clue how to deal with this process. Sun, IBM, and HP do. [Jonathan]: "There have been a couple of massive shifts in the marketplace, which gives us an enormous opportunity if we take advantage of it. One is the move to industry standard servers." snip... [Jonathan]: "When I look at the marketplace, I have a simple means of identifying commodities. Let me look around the room, and I'll talk to you about some of the commodities I see. I see a power outlet;[snip...] I see water in this water fountain at the side of this room. I also see the network. The network is represented in every physical space you can identify and through wireless technologies-almost every cubic inch of a major metropolitan region." "There are two ways of looking at the move toward commoditization. One is that it is something to be feared. My view is that it is something to be valued and to be pursued with a more aggressive competitive strategy than we've had in our lifetime. [snip...]" "What are the two things that a company needs to be able to do if they not only want to survive in a commodity market, but also grow to be one of the biggest companies in the world? You must have innovative technology." [Christian: Like the Java Desktop, with the OOo / SO code. Just imagine a day when the OOo / SO code is the defacto standard on the desktop. I can't see how Microsoft or Corel could compete successfully under those circumstances, but Sun can, because it will be ready to leverage its contribution to the OOo / SO code.] [Jonathan]: "Second, you have to be able to leverage your balance sheet and use disruptive pricing to gain share--whether it is with financial services companies that understand risk management, or telecommunications companies, or media companies that understand the cost of acquisition and the value of the subscriber measured by average revenue per user." [Snip...] "The price of whatever device the network touches--if a network service can be delivered to it and value can be garnered from it--can be radically disrupted to create market opportunities. Mobile carriers give handsets away for free. Talk about disrupting the price of the mobile handset--it's zero. Why? It encourages you to become a subscriber." [Snip...] "Of all the things the network touches, it touches computers. All computers are network computers. Think what would happen if, using the technology we have, we went to a customer and said, 'We'll give you this blazing fast Opteron server for 50 percent less than HP can give it to you for, if you sign up as a subscriber to our operating system.' How could HP compete? They couldn't. That gives us a huge competitive advantage." [Snip...] "What happened in the PC marketplace was that there was one company. Now, by promoting interoperability between Sun and Microsoft, we create growth opportunities for both of us because we could deliver a $200 PC to a less developed nation or a less wealthy demographic, and Microsoft could deliver a $2,000 desktop to a Wall Street investment banker who needs every feature and function that Microsoft makes available." Of course, as Jonathan says elsewhere in the article, Sun also is placed to compete with IBM and HP in providing top end hardware and with Microsoft in providing software for what Christensen calls the "upper tier" customers who are willing to pay a premium for specific crucial functionality. So Sun will be able to grow with the "lower tier customers" [customers who shop on the basis of fundamental functionality at price-sensitive levels] as well as the "upper tier" customers. In relatively short order, a good number of those "lower tier" customers will grow their own local businesses in what Jonathan calls "less developed nations or less wealthy demographics" and Sun will have established distribution channels in those areas. What fascinates me about this discussion is that it is pretty rare that an author (like Christensen) has an idea that has any kind of predictive power. Let's pretend that Christensen and Jonathan are right, and Microsoft is wrong, and that MS fails to respond in time. It would be like time-lapse photography; if you know what to look for, you will be able to see dramatic growth of some companies, and dramatic decline of other companies in a way that was contrary to conventional wisdom! It's like picking a horse that is thought to have no chance, and that horse beats Secretariat! (the winningest horse ever). How often does that happen! Christian Einfeldt -------------------------------------------------------------------- - To unsubscribe, e-mail: [EMAIL PROTECTED] For additional commands, e-mail: [EMAIL PROTECTED] ----- End forwarded message ----- "Sharpened hands are happy hands. "Brim the tinfall with mirthful bands" - A Deepness in the Sky, Vernor Vinge "I me. Shape middled me. I would come out into hot!" I from the spicy that day was overcasked mockingly - it's a symbol of the other horizon. - emacs : meta x dissociated-press
