Sun, IBM Offer Java System in Bid to Set NC Standard

PALO ALTO —  Sun Microsystems Inc. and International Business Machines Corp. today will announce a Java operating system designed for network computers in a bid to define a standard that could help boost the fledgling NC market.

The companies will collaborate on what they’re calling Java OS for Business and will make it available to manufacturers at midyear, with products based on the software available next year. Network computers are stripped-down PCs with no disk drives that depend on server computers for their programs and data.

The moves by Sun and IBM are the latest for the 3-year-old programming language, which Sun has been using as a foil against rival Microsoft Corp. By putting their collective muscle behind a Java OS for NCs, Sun and IBM are hoping to set a standard to spur sales. Still, with the popularity of PCs priced under $1,000 and software to manage them, it may be too late for the NC.

“If it’d been six to nine months ago, it would’ve been fine,” said analyst Stephen Dube at Wasserstein Perella Securities, who rates IBM “buy” and Sun “strong buy.” “They’re really going to have to make a major effort to sell this thing.”

Under the agreement, Sun and IBM will jointly develop and market the software. The companies will allow computer makers, software companies, dealers and customers an open platform on which to run new programs.

“One of the places we chose not to compete is at the OS level because we believe it’ll expand the market by having an industrywide standard,” said James Hebert, head of embedded-systems software for Sun’s SunSoft Inc. unit. “And if Microsoft wants to license it, that’d be wonderful.”

Microsoft, with its NC strategy called Hydra, and Network Computer Inc., an affiliate of Oracle Corp., are just two examples of companies with alternative operating systems now available for NCs. IBM and Sun plan to sell their NCs running on the jointly developed Java operating system.

“Not that either one has been a barn-burner in network computing, but IBM has been more successful,” said David Smith, research director for Internet strategies at Gartner Group. “At this point, anything helps.”

With under-$1,000 PCs expected to amount to about 40% of PC sales in the United States this year, and under-$800 PCs for corporate customers on the way from IBM, it’s going to be a tougher climb for Sun and IBM than it would have been a year ago.