August 3, 1999 2:10 PM PDT
Did Baratz succeed with Java message?
Baratz's departure from Sun Microsystems comes at a time when the company's core software projects are either fueling sales or on the brink of pulling in significant revenue, analysts say.
At the same time, the Java technology, which has yet to turn a profit for Sun, remains inextricably bound in several thorny issues surrounding licensing and standardization that have lingered for years.
Jon Kannegaard, a temporary replacement for Baratz, will have to deal with Sun's Java lawsuit against Microsoft, make Java an international standard, oversee the new Java community process, and grapple with the profusion of groups cloning parts of Java technology. Similar issues will likely crop up as Sun seeks widespread support for Jini, its networking software.
Java, though, has won dozens of licensees, according to Patricia Seybold Group analyst Anne Thomas, and soon licensing revenues likely will reverse the historical unprofitability of the "write once, run anywhere" technology.
In May, Baratz's job overseeing Java expanded to include the Solaris operating system as well as the "spontaneous networking" Jini software designed to get gadgets to automatically talk to each other. The reorganization was the result of the removal of hundreds of Sun employees who shifted into the Sun-Netscape Alliance, Sun's president Ed Zander said.
The reorganization transferred to the alliance the conventional software products--the types of goods that can be shrink-wrapped and sold to customers, such as Java programming tools, the NetDynamics application server, and the WebTop thin client software. Baratz, on the other hand, was in charge of software products that are fundamental to Sun's philosophy but that haven't been profit centers unto themselves.
The Sun-Netscape Alliance, which grew out of America Online's acquisition of Netscape, was an excellent way to combine Sun's marketing prowess with Netscape's product line, said David Smith, a Gartner Group analyst.
"It had a very good effect on Sun software," Smith said. "Before the alliance, both Sun and Netscape were going nowhere fast. Sun has had very limited success in the software space outside of Java sales and service but now has a potential e-commerce powerhouse."
However, Baratz probably wanted control over the products, Smith said, which could have been a factor in his decision to leave Sun.
Thomas disagreed. "I don't think that he was disappointed losing all the shrink-wrap stuff," Thomas said. "It was real insignificant in his world."
Baratz was in charge of the Solaris operating system only for a short time, but the system is well-regarded and has been successful helping to drive sales of Sun hardware, its primary revenue source.
Solaris is second only to Santa Cruz Operation's in Unix market share, said Dan Kusnetzky, and an analyst with International Data Corporation, but Solaris shipments are growing faster.
"Sun's Solaris is the second most rapidly growing Unix server operating environment," Kusnetzky said. "This can be attributed to the broad acceptance of its enterprise family of Sparc servers."
Making Java profitable
Java already was well under way at Sun before Baratz took over in 1996,
Thomas said, but he helped to bring the technology into maturity.
"In 1996, Java was in its infancy?now, it is used in production at 70 percent of the Fortune 500," she said. "Java is enterprise-class technology."
While Java hasn't always made money directly, "You've got to believe Java has been an incredible door-opener for Sun, getting them on the map and opening the door to sell all kinds of hardware, software, and services," Smith added.
Baratz himself, in a June interview, said Java has made money by raising Sun's profile. "We use the Java technology as leverage to get in and establish ourselves as a strong enterprise software partner and supplier," he said.
Now, with "significant revenue from licensing fees from 50 or more companies," Java could become profitable soon, Jini and the version of Java for gadgets also hold financial potential. "Once the royalties [of 10 cents per device] kick in for Microjava, that'll turn around and make some money," she said.
But Baratz's legacy at Sun will be the Java community process, Thomas said. "He opened up the Java development process so everyone in the world has influence over where Java is going in the future," she said.
In the Java community process, others besides Sun may submit ideas for future Java components and, with Sun's permission, may lead those efforts.
However, because of intellectual property concerns and Sun's continued control, some have seen the process less favorably, calling it the "Java gated community process."
Thomas also credited Baratz for striking the right balance between opening the source code of its Java and Jini technologies and keeping them proprietary. The company, however, has been criticized by open-source advocates who say Sun didn't go far enough.
