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Sun sets new economic policy for Java: Free now, pay later

December 9, 1998
Web posted at: 3:35 PM EST

by Dana Gardner


NEW YORK (IDG) -- Sun Microsystems may now be in the razor blade business. The force behind Java is giving more of it away to more people, but is also going to charge widely for what they produce with it, a close shave away from the economic model enjoyed by razor makers.

Sun's executives readily admitted here Tuesday at a launch party for Java 2 -- nee Java Development Kit 1.2 -- that Sun will begin to make a lot more money from Java than they have during the development of the technology over the last three-and-a-half years.

Under the new, complex model, Java source code can be freely downloaded by anyone who clicks on a license agreement at Sun's Web site. They can modify that code, keep it, and not have to share those changes back to Sun.

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Such developers can even sub-license that code to other software developers, as long as they become a Java licensee.

That move was met by enthusiasm in the Java community.

"For a new technology like Java, letting the user community extend it to meet specialized needs expands the boundaries at which innovation can occur," said Tim O'Reilly, president and CEO of O'Reilly & Associates, in a statement. "Moving toward open source, Java will bring us that future much faster, and with more interesting surprises."

But Sun's open-source model is accompanied by a process that -- just before a product in binary form is ready to ship -- requires Sun to grant its approval of the technology as sufficiently Java and then collect a fee on a unit-by-unit basis.

The rub is that whenever a Java end-product, or Java derivative end-product, is delivered commercially -- inside an enterprise or in the open market -- it must pass a Sun-contrived compatibility test and then royalties will be extracted by Sun for each new copy of the product.

"We will make more money on the royalties, far higher than under the previous model," said Alan Baratz, president of the Java Soft division of Sun in Cupertino, Calif.

Baratz expects that the time for compromise or talk of the economic model behind Java is over, saying that the new royalty plan for Java end-products will be in place "for years or the next decade."

"We have put an enormous amount of thought into the licensing model. We wanted it to be the most open we could while preserving compatibility. To go further would risk fragmentation," Baratz said.

It was expected that Sun here at the Java Business Expo this week would open the process behind the creation of new Java technology -- now more akin to an open-source model where developers can freely access code and then tinker with it -- but the new economic model that goes with it came as a surprise.

The new move to capitalize on Java by Sun may make the corporation's powerful role as a Java creator and mentor, product developer, systems integrator, and royalty collector difficult for some in the larger Java community to live with.

"I'm very concerned that the evangelical part of Java needs to be carried forward by someone else," said John Capobianco, senior vice president of marketing at Bluestone Software, a pure Java application server vendor in Mount Laurel, N.J.

"I don't care if Sun competes with me. Let's see who's better. But when the leaders of Java are serving their internal vendors -- that's as bad as Microsoft, the 'bad guy'," Capobianco said. "I'd rather have an independent body take over all of Java."

IBM, a major Java backer and partner, earlier this week called on Sun to hand over at least part of the mature aspects of Java to the International Standards Organization (ISO). Sun said it will begin such a process in February, but Sun officials were vague on how much Java code would revert to ISO stewardship.

For nearly the past year, Sun has projected a church-state division within its ranks. That has meant that a part of Sun has fostered the creation of Java, operating like a benevolent dictator that oversees the process for the common good. The other side within Sun has been portrayed as capitalizing on that "standards based" technology with their own products.

Now, with the expanded licensing model, Sun has added a third leg to the church and state facets by seeking wide royalties for all Java products inside and outside of various vendors and enterprises affected by Java.

An industry observer said Sun was emboldened by a recent court ruling that is forcing Java licensee Microsoft to conform its Java implementations to the Java 1.1 specification.

That observer wondered if Sun hasn't harbored a grudging respect for Microsoft, and by cultivating Java as a semi-standard under its control, will now begin to wield with Java the same clout and economic effect as the Windows operating system APIs have for Microsoft.

"Windows APIs or Java, what's the difference?" they asked.

Others wondered whether the Java community, in reaction to Sun's heavy-handed approach to Java -- now with a purported 900,000 developers -- will begin a process of fragmenting Java in a similar fashion to what happened to Unix in years past.

Sun officials said the Java royalty structure -- while widely expanding -- will remain the same: that a complex mix of factors will determine the amount paid per unit of product.

Sun's Baratz on Tuesday also said the company will collect its royalties on an honor basis, as it has in the past, and not employ time bombs or expiration mechanisms in its code.

"In the future we may have to set up accounting measures, but we don't see the need at this time to do that," Baratz said.

It may, in fact, prove difficult for Sun to oversee such a vast collection process, and it may end up honing in on the most profitable products that sell in high volume.

"We have been using the honor system, and [the 195 Java licensees] have done it, even Microsoft," Baratz said.

InfoWorld Editor at Large Dana Gardner is based in New Hampshire.

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