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Sun Microsystems Inc. is embarking on a strategy that challenges Microsoft Corp. on a brand-new front: the consumer market.
The Santa Clara, Calif., company is negotiating with major retailers Wal-Mart Stores Inc. and Office Depot Inc. to include Suns Java Desktop System on planned offerings of low-priced consumer PCs and laptops.
“You will see our focus trend toward us not visiting the CEO of, say, Goldman Sachs [Group Inc.] and trying to convince him that we can effectively replace the Microsoft desktop on his bankers workstation,” said Jonathan Schwartz, Suns executive vice president of software, in an interview.
Instead, Schwartz said, the company plans to attract a different segment of the market, including companies such as Wal-Mart, “to leverage our desktop as a more effective home and retail solution.”
“We have engaged [Wal-Mart] in a variety of discussions from auto-identification and [radio-frequency ID] tags on suppliers all the way to potentially providing them with a desktop solution,” Schwartz said.
Asked whether Sun and Wal-Mart are close to an agreement, Schwartz said, “You should expect to see this sometime next year.”
Wal-Mart, of Bentonville, Ark., is expected to launch its own brand of PCs next year, starting with notebooks. Wal-Mart spokeswoman Karen Burk declined to comment on negotiations with Sun and would say only that the company “has no plans for a private-label PC at this time.”
If Sun and Wal-Mart reach an agreement, it would represent a substantial departure from Suns traditional enterprise focus and channel—and a challenging departure at that.
Wal-Mart could consider Java Desktop System for its offerings, said Sam Bhavnani, an analyst at ARS Inc., in San Diego, but “in terms of how well it can do, I believe 100 percent that a Windows-powered device would do far better than a Java-powered device.
“A Windows notebook will be far more appealing to most consumers than a Linux/Java one, no matter what the price,” Bhavnani said.
Next page: Trading one proprietary desktop for another.
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At the same time, some users are painting Sun with the same proprietary brush they say applies to Microsoft and its products. An IT manager, who asked not to be named, said he could not understand why a user would trade one proprietary desktop for another.
“I personally keep Java off my computer because it crashes the system,” he said. “If Sun had the interests of the customer in mind, then the Sun desktop would be written in C and donated to Linux. Sun is no better than Microsoft.”
Nevertheless, Sun is moving forward, according to Schwartz, and is in talks with Advanced Micro Devices Inc. and Intel Corp. about running Java on the companies respective architectures. Sun has “been having that discussion with Intel and AMD because we would need to cooperate with both of them to hit price points that were really compelling,” he said.
A recent report from NPD Group Inc., of Port Washington, N.Y., said unit sales of notebooks jumped 31 percent in the United States during the first nine months of this year compared with the same period a year ago. Desktop PC sales fell by 1 percent over the same period.
Schwartz is upbeat about the potential for Suns product in the mass consumer market. The long-run evolution of the Internet is most likely to be driven by consumers, many of them young, and that gives Sun another “bite of the apple” in the next wave of PC client adoptions, Schwartz said.
But ARS Bhavnani disagreed, saying price is just one of many criteria for consumers and that the youth market is very particular about the products it buys.
“I think that Wal-Mart will test the waters with a known brand, like Windows, rather than an unknown Java or Lindows operating system,” Bhavnani said.
“Even if Sun does score a deal with Wal-Mart, it would be big for Sun, but ultimately I dont think it would have any real effect on Microsoft and its dominance in the desktop market,” he said.
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