April 15, 2004

Commoditization? I don't think so

The author of the "Open letter to McNealy" has some severe misconceptions about the software field:

But software technology -- operating systems, development tools, application servers, systems management tools, and the like -- all come with a major handicap. They become commodities so fast that pure technological excellence has little differentiating power.
None of these industries are anywhere near commoditization. If such were the case

  • Windows would be free, as would be WebLogic and WebSphere.
  • There would be no differentiating factor between Windows and Linux, they would all provide the same set of services.  Same for WebLogic and WebSphere.
  • Open source software would dominate all these markets.

Even free IDE's such as Eclipse can't commoditize the IDE space, as JBuilder and IDEA have been showing for several years now.

Software doesn't exist in a vacuum. What drives commoditization is user needs, not producers. And so far, user needs have constantly brought in new requirements on all these software stacks, precisely preventing commoditization from happening.

The author needs to read up on some basic business principles before trying to patronize a CEO...

 

Posted by cedric at April 15, 2004 09:23 AM
Comments

The author may be wrong in general but surely he has a point about Sun.

I find it hard to disagree that Sun has had a problem with its sales, marketing and branding. If the alternative explanation for their troubles is a lack of clever technology, I don't buy it.

Perhaps I can modify the original statement to be more acceptable like this: the market for operating systems, development tools, application servers, systems management tools, and the like has become _much more competitive_ in recent years. (It's more competitive partly because there are commodity products that are good enough to meet the needs of many users.)

Posted by: Christian Murphy at April 15, 2004 02:54 PM

I think Joshua is partially right with his commentary. A petstore is not a SAP CRM system. And being able to develop a petstore does not prove that you are able to build a SAP alike CRM system. And what customers (ok, big companies at least) want are SAP alike CRM systems.
I do think though that Sun has with Java one of the best brands in the IT industry, and yet they are not capable of utilising it except for selling (cool) Java Mugs, Sweaters, Books and Certifications. Maybe thats their destiny?
Rolf

Posted by: Rolf Mueller at April 15, 2004 10:49 PM
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