2003.09.19 11:28 AM

Linux Headline Hypes Sun's Java Desktop

Here's a headline I just read:

Applause for the Release by Sun of the Java Desktop System

Wow. That seems like a big deal. Got my attention and my click-thru via Google News. But then I read the actual LinuxWorld.com story. Huh?! Anti Money Laundering Network chairman Nigel Morris-Cotterill pipes up with a few words about the Sun announcement and it gets a headline like that? Here's a more realistic headline:

Anti Money Laundering Network Chairman Nigel Morris-Cotterill Applaudes the Release by Sun of the Java Desktop System

Or this:

Sun Announces 3rd Round of Layoffs, Tries Another Strategy

Whatever.

Here are Mr. Scoble's comments on Sun's recent announcements and why he believes, contrary to Sun, that it's actually about value, not price. For what it's worth, I agree with Mr. Scoble.


Comments

Eric

It is indeed about value but absolute price is a remarkably limiting factor in financial services businesses in the developing world. An example: one of our competitors has just sold a product to a bank in South East Asia. It was a board decision whether to spend USD500.00. And, yes, the dot is in the right place.

It is commonplace to find banks and other FIs in developing countries with P100s with 8Mb RAM and 14" monitors. Simply, the absolute cost of moving to W2000 or XP is beyond them.

Yet MS has decided not to patch W95, which is what a significant number of machines run. The security of desktop PCs is saved only by the fact that many of those institutions do not have their PCs attached, even indirectly, to the internet. However, they are moving to internet connection for a variety of purposes and the cost of so doing with an MS system is far higher than they actually need to spend. Already, a number are moving to OpenOffice even on W95.

Tech spend is a small part of the money that banks are having to spend for their overall compliance obligations. As more back office functions are running on some flavour of Unix (see the succession of articles in The Banker over the past year) the imperative to remain with MS is reducing.

In Europe, MS has sought to lock banks in with an interbank payment system but across much of the developing world it is now official government policy to migrate their systems to Open Source and wherever possible free software. The threat of this to MS is seeen in the MS decision to permit some (developed world) governments access to source code and permission to alter it. MS has previously threatened developers with legal action if they have done their own bug fixing.

The lack of stability at desktop level and the need for frequent patching of MS OS is something that requires levels of technical skills that are in short supply in most developing countries. Where branches are often a day's travel from a central IT facility, there are real and pressing reasons to consider a move away from MS OS.

And, yes, we, too, were surprised by how much coverage that PRel got!

Nigel Morris-Cotterill

Nigel Morris-Cotterill | 2003.09.27 08:10 AM

Nigel, thanks for taking the time to find me and write a thoughtful comment. Congratulations are in order, as you've logged the first comment on this relatively new blog of mine. Unfortunately, your comment references a post made by me predominantly out of irritation, not knowledge (I don't do banking or much IT work in developing nations). In reading your comment, I think it might help to clarify that my post actually meant to reference two separate and distinct things.

The first thing was the headline given to a LinuxWorld article that gave 2/3's of its space to discussing AML issues (which were interesting, but not relevant to the headline or me) and the remainder of its space to noting that Sun's new (IMO, inappropriately named) Java Desktop System just happens to support the "wide range of technology products" your organization has developed "to assist in detecting and deterring money laundering, customer identification and profiling and staff training". That's great, and I hope it proves a successful addition to your line of deployment options. My point was that this didn't rate the headline it got. Particularly when that headline propogates to Google news and gets my click.

The second thing was the question of whether MS is battling Sun (and others) on value or cost. It was not meant to be relevant to the first point in any way, other than they are both Sun-related. In so much as I don't (and won't, generally) blog about Sun, it didn't make sense to create a new separate post. In reading your comment and re-reading the LinuxWorld article, I realize the article did veer at the end into discussing OS costs, so I can see how my post's two separate references might seem related. However, my passing agreement with Mr. Scoble regarding MS and Sun battling on value and not cost did not include as a factor the impact of relatively high MS OS costs on poor nations needing to meet AML requirements. I'll admit I listened to the Sun Quarterly Launch content I linked to mostly in the background, but I don't recall Sun aiming the bulk of their cost and complexity sermons at the world's poor either. It seemed to me they were addressing their remarks to an audience packed (mostly?) with IT representatives of (what I would suppose are) relatively large US corporations.

So, with all of that now safely out of the way, I can address you comments, which are interesting, even without regard to my post's intent.

I agree with you that MS appears to be positioning themselves (i.e., on value in support of high costs) out of the developing-nations market. I have some personal experience with this, as some of my multi-national clients have offices in poorer countries where 486's and Win95 are still the best I can count on when deploying enterprise-wide systems. Until I read your comment, though, I had mostly considered this a compatibility and tech-progress issue (in other words, a pain in my ass), not an issue of constraining companies' ability to comply with advancing security regulations. I can agree with you that this factor will add to the "real and pressing reasons to consider a move away from MS OS".

The thing is, I'm not sure I care. My fortune does not rest entirely with MS, and certainly not with whether MS succeeds in these markets. If all but the richest western nations wish to (or can) adopt MS technologies, I can live with that. We develop IT solutions, and we'll do it on whatever platform makes sense for our clients.

It also seems that MS doesn't care either (or, if they care, it's not yet clear what they plan to do about it). My guess is that they don't believe it's in their best interests to chase these markets with updates that add life to products they consider dead, thus adding to their support costs without boosting their new product sales. However, I do believe that in time MS will lower prices to make their OS and productivity apps more accessible to these markets. This has already begun:

http://www.business-standard.com/ice/story.asp?Menu=9&story=22607

They will go kicking and screaming, but I believe they will ultimately go.

That's probably enough for now. Thanks again for taking the time to write.

ewbi.develops | 2003.09.27 10:25 PM

Just as you found me on google, so I found you during one of our periodic trawls to see who's copying our material (it happens a LOT but out trawls often come up with lots of other interesting stuff which are not stolen).

I'll just focus on one point: MS does not have to consider the developing world: it knows that by its domination of e.g. interbank payment systems and other heavyweight back office functions, that it will force financial institutions everywhere to install at least some MS product.

MS is being forced into selling its desktop OS at as little as USD17 in Thailand because it's a market that is totally immature and is not already conditioned to MS. SO far as I am concerned, it's really just a matter of banks breaking bad habits. Amongst our client base, we are already seeing desktop Linux and OpenOffice.Org and guess what? They run on machines that current MS OS simply die on.

Moving away from MS is business critical for the developing world. And then, ultimately, the developed world will catch on if it dare. But it took a long time for anyone to consider buying mission critical servers from anyone except Big Blue.

Nigel Morris-Cotterill | 2003.12.08 03:51 AM

More news regarding Microsoft's move into developing world markets with a lower cost OS:

http://www.forbes.com/work/feeds/ap/2004/09/29/ap1566504.html

As I said above, Microsoft will go kicking and screaming, but they will ultimately go.

ewbi.develops | 2004.09.30 12:21 PM



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