Sun's McNealy announces Linux deal with Chinese government

Mercury News ^ | 11/17/03 | Dean Takahashi

[Salo]

Sun Microsystems Chief Executive Scott McNealy always seemed like he was tilting at windmills when he said Sun would challenge Microsoft's dominance on the desktop computer. But McNealy announced today that the Chinese government has pledged to deploy a million computers in the next year using Sun's Linux desktop software. The cost: $50 per license for Sun's desktop software, which includes its Star Office 7.0 productivity program that is a clone of Microsoft's Office suite. Microsoft Office can cost more than $400 a copy. The China Standard Software Co., a consortium of government-funded companies, selected Sun as its preferred technology partner to deploy Linux-based desktops. The deal is part of China's deliberate policy to diversify away from Microsoft. Other governments in Europe and Asia have embraced a similar strategy, as has the state of Massachusetts. China has pledged to deploy 200 million copies of open standards-based desktop software. ``This I believe makes us the No. 1 Linux desktop play on the planet,'' McNealy said today at the Comdex technology trade show in Las Vegas. ``That's not the only opportunity. We're calling on every ministry of information technology on the planet.'' Sun has been demonstrating its Java Desktop System for the past year, which the company says it will begin shipping in December. At a later time, Sun will announce which hardware companies will ship systems with the Sun software on it, said John Loiacono, Sun's vice president of operating systems. The announcement was just one of several years-long strategic efforts that are coming to a head at Sun. Sun also announced a previously reported deal to create servers based on Advanced Micro Devices' Opteron microprocessor. The strategic alliance will challenge Intel's Itanium microprocessor.

[Salo]

Grist, mill. Attack! Sorry about the excerpt - it's mandatory.

[Salo]

Pinging Dr. Penguin.

[skeeter]

I hope the Chinese rob him blind.

[Charlotte Corday]

Interesting. Hard to imagine any of the MS-worshiping Freepers having a problem with this:

1 - not likely to be any national defense secrets in open source software

2 - If MS software is so much better for productivity than the Linux based stuff, this deal has to hurt the Chinese economy in the long run, right ? ;-)

3 - 200 million Linux desktops will provide a fertile ground to "prove" than Linux really is just as vulnerable as Windows to the script kiddies.

[Question_Assumptions]

...and China will be paying money to an American company (Sun) for the priviledge of using StarOffice.

[Mr Crontab]

Exactly. A big win for the US:
1) The chinese govt will waste lots of $$$ on inferior software.
2) They will be crippled by a weak IT infrastructure.
3) They will be more vulnerable to hackers than our sturdy Windows boxes.
4) MS can remain pure and untarnished by evil totalitarian-state $$$.


:^)

[Charlotte Corday]

Yes, and thank heaven for our copyright laws that prevent Sun from bundling in any of those great productivity apps like Freecell and Minesweeper.

[Golden Eagle]

As a Sun customer I must say I was extremely disapointed to hear this. I did not contact them today but will tomorrow to express my concern. Not in a political context, but as a longtime customer who feels that Sun has lost it's focus and likelihood of remaining true to it's vision.

This indicates Sun is much more vulnerable than I had previously thought. They have seen losses in the Billions to foreign and/or free Linux, but still maintained sales in the billions and were investing heavily in R&D.

But this shows a strategic shift towards Linux that I'm sure was a hard decision for Scott McNealy and one he's still unhappy about. He's finally giving in to the thought of the 'service only' line of business since for $50 a client he's barely paying for distribution.

It's obviously a troubling time there and I'm very disapointed to admit it, especially since the rabid linux zealots that cruse internet boards everywhere are already celebrating.

But the bottom line is this - China is going to get outfitted with some of America's best services for pratical pennies on the dollar of what we could have gotten from them if Linux didn't exist. Sun will limp along while their Unix business dies (baring a win from SCO that slows Linux adoption somewhat) now beholden to the Red Chinese government who will surely dump Sun as soon as their own Red Flag Linux company learns how to succesfully setup a services division.

It's a sad day when one of America's best tech companies is even allowed to build up the infrastructure of a potential communist enemy. It's an ever sadder day when they only got $50 million for doing it.

[Salo]

You left out a key point: any money the Chinese spend on software won't be spent on their military. Yeah, that's the ticket.

...and China will be paying money to an American company (Sun) for the priviledge of using StarOffice.

[Salo]

Sun, MS, IBM.....well, at least their pieces of silver are shiny.... I have no problem with linux: I don't like being forced to pray at MS's temple - and their conduct has proven to even you shills that they are sleazeballs - *American* sleazeballs, if you prefer, but sleazeballs nevertheless, so it gives me an OS to run that does not subsidize the communists with *MY* money. It's just too bad we can't keep the technology out of Chinese hands, but such is life.

It's a sad day when one of America's best tech companies is even allowed to build up the infrastructure of a potential communist enemy. It's an ever sadder day when they only got $50 million for doing it.

[Golden Eagle]

It's just too bad we can't keep the technology out of Chinese hands, but such is life.

Salo I like you pretty well but that is a defeatist attitude, pure and simple. It's unfortunately the same attitude that permeates the departments of state and commerce as well.

[Salo]

You can't un-ring a bell. I worry less about software/source-code falling into their hands than other things anyway. For instance, the board of directors of Loral should have been put up againt the wall for giving them ICBM capabilty. I would like to think an influx of capitalism to the dark side would break them out of their chains, as it did in the Soviet Union, but I think they learned from that instance and will be careful not to let it happen that way.

[Golden Eagle]

I would like to think an influx of capitalism to the dark side would break them out of their chains, as it did in the Soviet Union...

That's not what happened. There was a wall around them that we used to choke them with. China has a wall too we're just not using it.

[steve-b]

pennies on the dollar of what we could have gotten from them if Linux didn't exist

That is, "pennies" is the true market price, and the "dollar" is a tulip-bubble temporary price.

[adam_az]

I hope the Chinese rob him blind.

Good to know that you root AGAINST American business. I'll keep that in mind.

[adam_az]

You're assuming they would have bought the same quantity at a higher price, which is false since demand for IT products and services is relatively elastic to change in price. Please, go take a Microeconomics class and then get back to us.

[adam_az]

I would like to think an influx of capitalism to the dark side would break them out of their chains, as it did in the Soviet Union, but I think they learned from that instance and will be careful not to let it happen that way.

The Chinese economy is very fragile. They are practicing a form of mercantilism, similar to what the Japanese did in the '70s and '80s, which royally screwed their economy up. I would say the chips are not all in.

If China keeps liberalizing it's economy (in the classical liberal sense), especially if they open their currency to trading, it will be interesting to see if Milton Friedman's theories come to pass there.

[adam_az]

That is, "pennies" is the true market price, and the "dollar" is a tulip-bubble temporary price.

Yup, dropping prices are a sure sign that increased technology has increased supply (of IT products), lowering the price, and turning what was a high-profit specialized machine into a COMMODITY. Sun had a good ride because they rode the wave of initial adoption, and now are trying to find ways to adjust to the commodification of their market. Looks to me like they might have found a good niche, which will let them leverage their skill and experience in the new commodity environment. IBM is a great example of a growing business based on services income - their Global Services unit (which I know well because I worked in it, for a number of years) grew extremely rapidly and is now responsible for a huge % of IBM's total profit.

[skeeter]

Good to know that you root AGAINST American business. I'll keep that in mind.

Suit yourself, but get it right - I'm rooting against the MBA punk McNealy, not American business.

The 6 years I spent at his company didn't exactly infuse me with respect for his management style, not to mention his obsessive Capt Ahab routine against the Great White Whale MS.

[adam_az]

I don't like him personally, either, but Sun failing will affect MANY more people than himself.

On the other hand, his "management style" turned Sun into a huge, profitable company.