Technology: It's a two horse race

By David Berlind November 30, 2001

Sun CEO Scott McNealy has a lot to say about everything: what 21st century IT should look like, Microsoft and the DOJ, national security, and the economy. But nothing sticks out in my mind more than the one thing he repeated over and over during our recent interview; "There are only two multi-million developer bases out there. That's it."

He's right. It has all come down Java vs. .NET. Plenty of other battles for supremacy are raging in our industry: Databases. Operating Systems. Corporate Portals. Chips. Mobile. Security. Outsourcing. Not one of them looms larger than Java vs. Windows.

In fact, all are simply caught in the draft of Java vs. .NET. While we struggle to make strategic technology decisions that are little more than calculated bets on the winner, Sun and Microsoft are in a desperate race for the same brass ring: transactional user IDs. As McNealy put it at Gartner Symposium/ITxpo in October "The big war is that he or she who dies with the most rich and/or smart people in their online directory wins. Every bank, every retailer, everybody is trying to get the most rich and/or smart people into their online directories before their competitors do. Microsoft has figured this out."

Mailing lists all over again
History is repeating itself. It's mailing lists all over again. Businesses have long understood that the key to winning is finding and contacting people who have their wallets out. That idea gave birth to the special interest publication whose main business proposition to advertisers is its mailing list -- a targeted demographic ready to spend money on something specific. Why else would they be reading the special interest publication? They must be looking for something to buy. Millions of businesses exist solely for the purpose of assembling and distributing these targeted lists.

Before the Internet came along, however, list impurity was a major issue. The older a list, the more likely it was that the list's members had put away their wallets, and the less valuable the list became. But the Internet is enabling businesses with real-time lists with a purity that's nearly 100 percent. These lists immediately answer the question of who has money to spend, who is about to spend it, when they'll spend it, and who is willing to spend it online. It's the 21st century version of a customer list, a.k.a. McNealy's online directory of transactional IDs.

Assembling these directories has put the war between Java and .NET ahead of all other battles, because in the future no transaction will be completed without the presence of one of these technologies in the customer's hands.

Who do you bet on?
While both technologies could co-exist for the foreseeable future, Sun and Microsoft appear hell bent on disintermediating the other. If either company succeeds, virtually everybody who bet on the wrong horse --- businesses, IT managers, programmers, and vendors --- would be sent back to the drawing board. This is a potentially devastating setback, because deciding on one technology forces you into making so many other decisions across your entire solution matrix.

For example, thousands of mobile phones and credit cards are already entering the market with Java preloaded. While Web services standards like XML and SOAP should make it possible for these Java clients to conduct a transaction with a server driven by either Java or .NET, the odds of the transaction completing successfully and securely are increased when the same technology is on both ends of the network.

Furthermore, popularity of one technology over the other could create a vicious circle. Merchants who see more potential customers using Java-enabled devices will develop for Java. If more merchants develop for Java, then more mobile phone makers will put Java into their phones. If one technology develops enough momentum over the other, the game could be over.

To keep that from happening, Sun and Microsoft are waging a war that includes smear campaigns, innuendo, personal attacks between the executives, litigation, entire technology and development platforms, and, most interestingly, a no-holds-barred effort to marry those platforms to the most transactional IDs.

The focus of this struggle has now turned to the part of Java and .NET that promises to allow customers to move seamlessly from one site to another without having to use separate user IDs and passwords. In Microsoft's world, this is called Passport. Sun's implementation is called Project Liberty. Getting users to adopt one or the other is one way to complete the aforementioned marriage. To do this as quickly as possible, and to claim bragging rights for the most number of transactional IDs, Microsoft and Sun are taking two completely different approaches.

Microsoft is busy gating virtually every service it runs with Passport. Not a week goes by where I don't find some clever trick that Microsoft uses to convert another one of its constituencies into a clan of Passport holders. A Passport is now required to access all the reseller areas on Microsoft.com. The same goes for Hotmail users.

Last week, my son got a new computer from eMachines. Using a huge rebate, Microsoft subsidized 75 percent of his Internet service costs in exchange for using MSN as his ISP. As an MSN user, he automatically becomes a Passport holder. So does his mother, thanks to Windows XP's multi-user support. Get the picture? Just yesterday, I attempted to play with Microsoft's UDDI directory. (UDDI is a white pages standard that will play an important role in the future of Web services.) I couldn't get in without a Passport. A freshly installed version of Windows XP asks you to sign up for Passport no fewer than five times. The wording of the request is very disingenuous. I showed the message to several less computer-literate people and all were misled into thinking that they wouldn't be able to access the Internet unless they signed up for a Passport.

The power of partners
Sun on the other hand has no existing services or products that people are registered to use. As a result, Sun has no way of doing what Microsoft has done: converting over 165 million constituents into Passport holders. However, according to McNealy, the number of transactional IDs that use Liberty will blow right past Passport once his 34 partners in the Liberty Alliance start enabling their customers. VodaFone's hundreds of millions of customers, says McNealy, will be authenticating with Liberty. If other Alliance members -- Fidelity, Bank of America, American Airlines, Sprint -- follow suit, the number of transactional IDs suddenly married to Java could easily dwarf the universe of Passport users. For example, American Airlines could require a smart card enabled with Sun's JavaCard technology that authenticates the cardholder against a Liberty-based authentication server before that person is allowed to board a flight.

At the Gartner conference, Microsoft CEO Steve Ballmer said, "Liberty has zero probability of mattering." Considering the way Microsoft has its pedal to the metal in order to work. NET into as many transactional hands as possible, I'm not so sure. Sun has managed to get Java into just about every digital device out there. The company has focused on the market leaders: some form of Java is on smart cards from American Express, Visa, and MasterCard. It's still in almost all Windows-based devices (except for recently shipped XP systems and Pocket PC). The world's leading mobile phone, digital TV, set top box, and gaming system manufacturers have all included Java. When I asked Richard Green, Sun's Vice President of Java and XML Software, what he charged everyone for that, he wouldn't say. My bet is pennies. For pennies, no one had anything to lose. And Sun had everything to gain.

Considering how Java's tentacles have extended into everything everywhere, it should come as no surprise to see Microsoft working hard to catch up. To get more transactional customers, Microsoft's goal is to get the .NET equivalent of Java into as many of those devices as possible, even if it has to make them itself. Can you say "XBox?" The gaming constituency wouldn't be a bad group to turn into Passport holders, would it?

At Fall Comdex 2001, I asked John Montgomery, Microsoft's .NET Developer Platform group product manager, what the company calls that piece of .NET they're trying to put into all those devices out there and how Microsoft plans to get it there. Montgomery calls it the ".NET Framework." He says Microsoft will soon announce three huge partners for the mobile version that they want to put into phones to compete with J2ME, the micro-edition of Java. Earlier this week, I learned that Microsoft's code name for this is ".NET Compact" and my bet is that Microsoft will do a lot more than give it away in order to disintermediate J2ME. I have no idea who the partners are, but only a handful of phone manufacturers matter. My guess is Microsoft has found three of them willing to manufacture a new model based on Windows CE for mobile phones (code-named Stinger). In that scenario, Stinger would come with .NET Compact built-in. Another scenario is where Microsoft ports .NET Compact to the existing OS from Symbian that's used by many existing smart phones.

Buckle your seatbelts. The race is on.

David Berlind is Editorial Director of ZDNet's Tech Update.