When “Free” is a Bad Thing

The words “free” and “sex” are the most often used words in product promotions. Sadly, those words rarely appear together.

Sun of late has been using the “free” word as if constant incantations were the path to salvation. But their new found mantra is both unfounded and foolhardy.

Sun, like all vendors, is facing the reality of a new commodity market. Servers, storage, and operating systems (i.e., Linux) are rapidly losing differentiation – which is precisely what the market wants. Vendors are scrambling to find profits in a world where the single, obvious source of differenteation is price.

IBM took the lead by growing their services group, and driving the commoditization of the common server stack (both an attack anda defensive maneuver). They also protected their proprietary market segments by assuring that Linux became part of the environment – by running Linux in partitions on i- and z-Series servers. Dell continues their success by driving commoditization via efficient manufacturing. HP . . . well . . . HP has not yet decided what to do.

Sun has decided to Dance a Little Sidestep.

Though Sun appears to be giving away everything from Solaris to Java to the kitchen sink from the employee lounge, Sun continues to hold trump cards. According to many different thoughtful analyses, Sun’s “free” offerings come with worrisome restrictions. A cynical person would assume that Sun either has deep control issues, or an ulterior motive.

Business is about balancing risks and rewards. The rewards Sun offers are cheap software that in some cases offers great benefits to IT (Java is a winner, though free Solaris has no significant added value over Linux). But the costs may not be fully stated – “free” may not be “free”. The question every IT manager is asking is “Will Sun ever throw their trump cards?”

It would be pure speculation. But the downside risk is potentially serious.

According many opinions about Sun, they reserve the right to terminate licenses with a future revision, terminate licenses if and when a patent dispute erupts (as it may over Linux), and other trump cards. There exists a real potential that at some future date, Sun could seek income from licensed technology that was “free”. This creates an immeasurable downside potential for any IT shop – a risk few CIO’s are willing to take.

In the mean time, Sun is doing little to create value either in or above the commodity layers of the stack (unlike Oracle who foresees the commoditization of DBMS software and is “moving up the stack” buying application vendors). Their low- and mid-tier hardware is unexciting, their high-end servers are rapidly losing ground to cluster and grind systems running on x86, and their software portfolio (outside of Java) is not exceptionally compelling. And unlike IBM, their consulting services are not focusing on agnostic solutions sets, not promoting commodity alternatives.

The bottom line is Sun isn’t responding to a changing market in ways that create trust and brand value. Their marketing directions create thin veils of openness without delivering on that promise. Some have said that “a brand is a promise kept.” If the promise is not believed to begin with, then there can never be a brand. And without a brand, you have built-in failure.

The Sun may truly be setting.


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