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Sun CEO touts software as service (1999)

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Geneva (October 13, 1999) -- Sun Microsystems Inc. Chairman and Chief Executive Officer Scott McNealy thinks that the AT&Ts; of tomorrow will be like the Microsofts of today. McNealy's prediction, delivered at the Telecom 99 show here today, aligned with a growing movement in the computer industry where software is a service delivered over networks.

The common line goes that software applications will reside on large servers and be accessed by devices such as mobile phones and desktop terminals. Network providers such as telecommunications companies will offer the software for rent, free of charge or as part of suite of network services. The vision differs from today's computing world, in which PCs house complex software in the form of operating systems and applications.

"We are changing the rules," McNealy said. "You should not have (software) with you, you should have it on the network -- store it on the network."

McNealy compared data and software to money, arguing that it is safer to not carry all of your money with you but to store it in a bank, withdrawing small amounts when needed. The Sun chief executive argued that telecommunications companies could serve as the software "banks" of the future, providing access to software over their networks.

McNealy's comments advance a "software-as-service" and "apps-on-tap" theme at the Telecom 99 show here this week. Telecom companies, computer companies, and networking equipment makers are rolling out plans and partnerships offering a range of advanced network services.

For instance, Hewlett-Packard Co. on Monday announced a plan to sell telecommunications companies and other network providers the building blocks -- including hardware, software, and consulting -- for offering such services.

First generation, network-based software services already exist, McNealy pointed out during his speech. He cited email service Hotmail and the stock brokerage service run by ETrade Group Inc. as examples of networked software applications.

He also demonstrated what Sun is doing with the new computing model, showing a recently launched product called Sun Ray that enables companies to distribute applications over corporate networks. McNealy and a helper showed the technology by tapping into an internal Sun service that gives each employee a custom Web portal that houses various software applications.

In addition, Sun's purchase four weeks ago of Star Division Inc. gives the company a leading maker of office productivity applications. Sun is offering those applications free over the Internet. The company's StarPortal software does not reside on client devices such as PCs but instead works over a network. McNealy said that 800,000 versions of Star's applications have been downloaded in the past eight months.

The Star strategy is seen as a direct threat to Microsoft, which has built its fortune selling packaged software. McNealy promoted that belief today.

"The whole retail application software business is disappearing," McNealy said. Software "should be locked up in a switch room and managed and controlled by a professional."