Sun CEO: Developers First, $ Later

Giving things away is critical to Sun’s future financial success.

That’s because software developers are key to Sun’s future, according to Jonathan Schwartz, Sun’s president and CEO, who spoke with analysts Wednesday at the Gartner Symposium/ITxpo in San Francisco.

And if there’s one way to appeal to software developers, it’s by giving something away, he told the show’s audience of IT executives. “Developers love free; it’s their favorite price,” he said.

This is a very different mindset from corporate IT buyers, but one that matters a lot to Sun, because developers tend to drive the adoption of new technology within the enterprise. “You all, when I say free, think ‘free puppy,’ ” he said, prompting laughter from the audience.

“We’ve got to be able to understand both sides if we want to drive the industry forward.”

Schwartz, who took over from Chairman Scott McNealy as Sun’s CEO three weeks ago, spent much of the discussion explaining and then re-explaining how his company’s courtship of software developers will eventually restore profitability. It’s a question Sun executives have been struggling to answer for nearly six years now as the company has reported a long string of losses and barely profitable quarters.

Schwartz acknowledged that Wall Street, with its focus on revenue growth, was having a hard time getting Sun’s message. “It’s a tough thing for the Street to understand,” he said. “Revenue to Sun is a lagging indicator of the adoption of our developer platforms.”

Jonathan Schwartz

Sun has made some big changes in the past, looking to entice developers and regain some of the cachet that the company has lost to the open-source world. After releasing its Solaris operating system under an open-source license, Sun is now pledging to do the same to its core Java technology.

Though Schwartz didn’t shed any further light on when or how Java might be open sourced, he said the value of Java to Sun extended far beyond whatever licensing revenue the company might earn. “The day you adopt Java, Sun is relevant to you,” he said. “What’s that worth to Sun?”

Sun has never broken down Java licensing revenue, making it unclear whether the company has turned a profit on its widely used development software. Sun has, however, provided financial details on some of its lines of business: systems, storage and services revenue, for example.

Speaking with reporters at the Sun’s JavaOne developer conference Tuesday, Schwartz said that asking Sun how it monetizes Java is like asking General Electric how it monetizes electrical plugs.

“Open sourcing products doesn’t mean you have less revenue,” he added. “It means you have less barriers to revenue.”

-Robert McMillan, IDG News Service

(InfoWorld’s Paul Krill contributed to this story.)

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