TORONTO – The lesson to be learned from the new economy collapse is that the Internet is a technology and not a business, Sun Microsystems Inc. president and COO Ed Zander told a press briefing here Thursday.
“I think we’re in the early stages of the Internet and we’re defining it as a business. And it’s not (a business); It’s a technology,” Zander said during a question and answer session that also touched on Microsoft Corp.’s anti-trust trial and Hewlett Packard Co.’s proposed purchase of Compaq Computer Corp. Zander was in town to meet with Sun Canada employees and customers.
Zander said the Internet should be viewed as tool for making business more effective and efficient rather than as a new means of doing business in itself. He painted the Net as a latter-day version of the Industrial Revolution, which inspired many failed businesses though it eventually served as crucial to the progression of both economy and society.
“The good news is we’re going to clean out all the bad business plans,” Zander said, suggesting the companies that survive will benefit from a second round of Internet-aided growth.
“I believe all this capacity over the next decade is going to be gobbled up and used,” he said. “I just hope the telecom companies don’t stop investing in optical and in the last-mile technologies.”
He downplayed mergers as a way to weather the downturn for technology companies, saying that road is full of potholes, citing the joining of Burroughs Corp. and Sperry Rand Corp. to form Unisys Corp. and Compaq’s purchase of Digital Equipment Corp.
Like the proposed union of HP and Compaq, Unysis was formed to challenge IBM The problem with HP’s proposed purchase of Compaq, Zander said, is that “Hewlett Compakard” would combine two companies with similar portfolios.
“They’ve got two of everything, it’s like Noah’s Ark,” Zander said. “They got to have Judge Judy vote every day on, ‘Is it going to be my Intel architecture of your Intel architecture, my storage or your storage?'”
Also, he said, companies that regularly change their strategies risk losing the confidence of their customers. Zander noted that Compaq bought DEC in 1998 in large part because of the latter’s Alpha chip. The chips were the driving force behind Compaq’s servers until this June 2001, when Compaq transferred Alpha microprocessor and compiler technology to Intel and announced it would consolidate its entire 64-bit family of server onto Intel’s Itanium microprocessor architecture.
Zander said the best companies “have consistent visions and strategies, but change tactics.”
Sun adopted new tactics in creating Java and hitching itself to the Internet in 1995, but the company’s strategy has not wavered since, Zander said.
“If you’ve been a customer of Sun from the early ’90s, you’ve had little disruption,” he said. “I can’t be changing Web server or middleware architecture.”
Zander praised Microsoft as a company that has maintained a consistent vision, even as it has shifted focus from the operating system to the Internet. However, Zander had little else nice to say about the software giant.
“The fact is they’re guilty of abusing the monopoly,” Zander said. “Nobody wants to see companies (shut down). They just want to see people obey the law.”
Zander said Sun’s strategy also involves taking the time to talk to customers.
“This is a hard business and you gotta stay in front of the customers,” Zander said, noting that face-time is even more important given the current economy. “These days, I’ll go to Halifax,” he said.
Also on Thursday, Sun Microsystems Canada announced an agreement with Bell Zinc Corporation that will see BellZinc.ca serve as a sales channel for Sun’s Cobalt Internet server appliances.
On display was the Sun Cobalt Qube, which Sun Canada’s vice-president of technology Gordon Sissons said allows small and medium-sized businesses to offload management and maintenance of their networks to Bell.
“It’s one piece of technology that allows applications to be delivered as managed services,” Sissons said, adding that the Qube, which is expected to sell for about $2,000, is 100 per cent remotely managed as soon as the server is configured. “(The business) doesn’t have to know anything. They can just pay their monthly fee to Bell.”
