FORTUNE MAGAZINE FEATURE ARTICLE
November 11, 1996,
SUN'S JAVA: THE THREAT TO MICROSOFT IS REAL
Sun Microsystems once hyped its new software language as a way to make Web
pages extra-cute. Almost by accident it unleashed the next great wave in
REPORTER ASSOCIATE ERYN BROWN
Flowers From Java
If he doesn't already, Bill Gates may come to regret Pearl Harbor Day
1995. That was the day he outlined Microsoft's grandiose plan to make
war with Netscape Communications and morph itself into the overlord of
the Internet. It was also the day the mighty billionaire blinked. As
part of his presentation to financial analysts and the press in
Seattle, he announced that Microsoft would climb on the bandwagon for
Java, a hot new Internet programming language promoted by his
nettlesome archrival Sun Microsystems. Gates had no choice, really,
but to go along with Sun. In so doing, however, he exposed Microsoft
to a threat more dangerous than any Netscape could present.
Java is one of the hyped-up Internet software technologies that have
spawned the World Wide Web, awful words like "intranet," and those
strange-looking addresses on business cards and TV commercials.
Originally known as a way to jazz up Web pages with graphic
animations--stock tickers that crawl across your screen, for example,
and dancing icons--Java has quickly evolved into a whole lot more. To
Microsoft's dismay, it is fast becoming what is known as a computing
platform--a sturdy base upon which programmers can build software
Chart: In the Sack with Java
Java is making possible the rapid development of versatile programs
for communicating and collaborating on the Internet. We're not just
talking word processors and spreadsheets here, but also applications
to handle sales, customer service, accounting, databases, and human
resources--the meat and potatoes of corporate computing. Java is also
making possible a controversial new class of cheap machines called
network computers, or NCs, which Sun, IBM, Oracle, Apple, and others
hope will proliferate in corporations and our homes.
The way Java works is simple. Unlike ordinary software applications,
which take up megabytes on the hard disk of your PC, Java
applications, or "applets," are little programs that reside on the
network in centralized servers. The network delivers them to your
machine only when you need them; because the applets are so much
smaller than conventional programs, they don't take forever to
Say you want to check out the sales results from the Southwest region.
You'll use your Internet browser to find the corporate intranet
website that dishes up financial data and, with a mouse click or two,
ask for the numbers. The server will zap you not only the data, but
also the sales-analysis applet you need to display it. The numbers
will pop up on your screen in a Java spreadsheet, so you can noodle
around with them immediately rather than hassle with importing them to
your own spreadsheet program.
To graph the numbers, you'll call in a charting applet that will let
you print out your report nice and pretty, all without leaving your
browser. And you'll always get the latest, greatest version of the
applets too: Since the software is stored in only one place, corporate
techies can keep it up to date more easily.
The real beauty of the Java language, however, is its power to save
users money. Corporate chief information officers, a.k.a. CIOs, think
Java may be software's holy grail both because it vastly simplifies
creating and deploying applications and because it lets them keep
their existing "legacy" computers and software. Java programs, once
written, can run without modification on just about any kind of
computer: a PC, a Macintosh, a Unix workstation--heck, even a
mainframe. The underlying operating system makes no difference. Java
actually can breathe new life into older specialized computers that
were at risk of becoming obsolete.
In scarcely a year, Java has evolved into a major challenger to
Microsoft's Windows family of PC operating systems--faster even than
DOS and Windows rose to challenge traditional mainframes and
minicomputers. Java is also well on its way to becoming the most
important Internet software standard, catapulting Sun past Netscape
and Microsoft as the leader in Internet computing.
While Sun is essentially donating the Java language to the computer
world by publishing all the specs and letting anybody use them, the
technology will spur lucrative growth for the company. It should fuel
already blazing sales of Sun's Internet servers (which can cost up to
$25,000) and jump-start its new line of sub-$1,000 JavaStation network
computers. Java will also rev up demand for Sun's software development
tools and for special Sun chips that other computer makers can use to
make their machines run Java faster. The halo effect from Java is a
big reason Sun's stock has become hot (see chart).
In short, Java is outstripping its own breathless hype--and causing
headaches for Microsoft by soaking up industry resources. Already tens
of thousands of programmers are writing Java code, as hundreds of
commercial software makers and corporate information-systems
departments put their best people on Java development. Sun, IBM, and
Compaq Computer, among others, have ponied up a $100 million
venture-capital pool called the Java Fund to help seed startups. And
although it is politically incorrect for them to say so, even
engineers in the bowels of Microsoft seem jazzed about Java.
For Sun CEO Scott McNealy, it's a pipe dream come true. "We always
thought we were onto something with Java--that it was our one big
chance to challenge Microsoft and to change the economics of the
business," he says. "But I have to admit I never thought Java
computing could unfold quite this quickly, or with such universal
support from customers and competitors. It's astounding, really."
Most of us don't know (and don't want to know) the first thing about
computer languages. Yet they are the catalysts of change in computer
technology. Mainframe computers weren't of much use in the workaday
world until Cobol came along and made it easy to write accounting and
inventory programs. IBM's Fortran language made it possible to program
engineering workstations and supercomputers for scientific analysis.
It was Basic--a version of which was Microsoft's very first
product--that let hobbyist hackers program early personal computers.
Another language known as C++ streamlined development of
point-and-click graphical programs like the ones we use on Windows PCs
Java looks like the language best suited to Internet computing not
just because it doesn't favor or discriminate against specific
machines but because it is inherently virus-proof--the language was
designed so applets can't alter data in your computer's files or on
its hard disk. (McNealy puckishly calls using Java programs the
equivalent of "practicing safe computing.")
Java is also one of those charmed technologies--Microsoft's original
DOS operating system is another--that arrived at exactly the right
place at the right time. Since Sun introduced Java in May 1995, a
constellation of forces--other Internet innovations, software
economics, industry politics, and customer need--aligned almost
simultaneously to let Java emerge.
Adam Smith would be proud, because it is the marketplace more than
anything that is driving Java computing. Over the past decade,
companies have spent hundreds of billions of dollars on information
technology (IT) systems and software, much of it to equip virtually
every desk in white-collar America with a PC and then to link the
machines into networks.
But even as PCs get cheaper and more powerful, they grow ever more
expensive and difficult to maintain. An oft-cited Gartner Group report
estimates that companies must spend more than $6,000 a year on
hardware and software upkeep for a $2,000 PC that runs Windows 95.
CIOs are finding this mind-boggling sum harder and harder to justify,
much less afford. So they are willing to try just about anything to
push down those costs.
At the same time, the industry's two near monopolies--Microsoft with
its Windows system software and Intel with its microprocessors--are
leaching more and more of the profit from the PC business. Resentment
has grown as profit margins have shrunk at companies like IBM, Apple,
Lotus, and Borland. All would like nothing better than to take
Microsoft down a peg. Customers, too, are increasingly uneasy as the
Wintel duopoly threatens competition and product choice. At a recent
FORTUNE-sponsored Internet conference in Chicago, several IT
professionals said they were rooting for Java computing if only to
keep Microsoft from being able to dictate corporate computing
technologies and strategies.
For IBM and Apple, Java may prove nothing less than a godsend. Big
Blue sells five different types of computers and operating
systems--mainframes, minicomputers, workstations, and two flavors of
PC--none of which is compatible with the others, much to customers'
frustration. Now the company is hard at work building high-performance
versions of Java into each of its operating systems so that for the
first time in its history, IBM's entire computer line will be able to
share software. (Ironically, Microsoft, which itself has fostered
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