Google, Sun tout software deal, hint at services

Schmidt, McNealy only hint at things to come from the partnership

Google Inc. and Sun Microsystems Inc. Tuesday unveiled a partnership to distribute the Google toolbar with the Java Runtime Environment (JRE), but stopped short of revealing any future plans to bring Sun applications such as the StarOffice productivity suite to the Web through Google services.

That does not mean that the union still won't pose a problem for the companies' common rival Microsoft Corp., as both Sun and Google executives hinted that it's likely at some point they will jointly provide applications as services, a plan Microsoft also has in the works, analysts said.

At a press conference in Mountain View, California, Tuesday, Google Chief Executive Eric Schmidt and Sun Chairman and Chief Executive Officer (CEO) Scott McNealy unveiled a deal between the companies that they said will start with the marriage of the Google desktop and Java, and expand in any number of directions. Sun plans to make available a version of the JRE including the Google toolbar in the next 30 days.

"We want to leverage the network economics [with] a very strategic partnership to promote the Java Runtime Environment and the Google toolbar," McNealy said at the event at the Computer History Museum Tuesday morning. "Going forward there's lots more we can do. They have a lot of smart folks at Google ... This is a very natural partnership. There's going to be a lot of money following if we do this thing right."

While a press statement said that Google also is exploring options to expand distribution of OpenOffice.org -- the open-source suite on which Sun's StarOffice is built -- executives did not elaborate on how this would be done.

Schmidt, McNealy and Sun President and Chief Operating Officer Jonathan Schwartz, who joined the two CEOs on stage to field questions after the press conference, only alluded to future plans the companies may have to deliver software such as OpenOffice.org as a service on a joint network built using Sun infrastructure, the news that many analysts and industry-watchers believed would be the focus of Tuesday's event.

In fact, though Sun's share price was up almost 10 percent to $4.56 before the press event, it went down again to close at $4.20, just $0.01 higher than its closing price the previous day.

Sun and Google also Tuesday declined to admit their union was designed to compete better with Microsoft, a chief rival for both Google and Sun.

Sun's Schwartz said that the partnership was not intended to highlight two companies' coming together to fight a common enemy, but to illustrate how they are uniting on common goals.

"It's not about who we're against, it's what we're for," he said. "There is plenty of commentary on the Internet about who is going to be sensitive to our partnership. To me the one marketplace I'm focused on is customers, not Microsoft... Freeing the Internet or lowering costs and driving participation are all value propositions for the customer."

"The point here is both [Google and Sun] are dedicated to software as a service, to the network as the computer," McNealy said. "All $2.2 billion of our R&D [investment] has some applicability to somehow make the Google experience better, or we wouldn't be doing [the partnership]... We can only talk about what we're talking about now and there is a lot of conversation and cross-pollination [between us], and we expect more to come."

"One thing to understand about Java is that it's a programming platform," Schwartz said. "As Google looks to expose more and more APIs (application programming interfaces) [on the Web], they need to make sure that platform can evolve. There's lots of opportunity here."

He added that the two companies would not spell out exactly what the opportunity is "partially because of the element of surprise" about what they plan to deliver in the future.

Jean Bozman, a research vice president with research firm IDC, said she expects the software distribution deal unveiled Tuesday to be just the tip of the iceberg for the companies.

"When they said 'stay tuned,' that means to me there are other announcements down the line," she said. "But we didn’t get the details today."

McNealy and Schmidt also said that Google, already a Sun customer, would be expanding that role, but declined to reveal exactly how that would be done.

Following the press conference, Schmidt said that the companies "would never pre-announce anything." However, when asked whether the companies have no plans to offer applications as services using Google's network, he cautioned, "Don't put words in my mouth; I never said that."

However, Schwartz in an interview said cryptically that he's "not convinced the world needs a Web-based office productivity suite." But, he added, "you'd have to talk to Google about what they are up to."

During the press conference, McNealy stressed that Sun is determined to "take back the Web" and regain some of its former glory epitomized in a previous marketing slogan that Sun was "the dot in dot.com." He declined to say exactly what that might mean in the future for the Sun-Google relationship.

However, McNealy did hint that partnering with Google was a clear statement that Sun plans to provide infrastructure to offer customers applications as services the way some of its existing customers already do.

"We've made some progress with software-as-services companies such as Salesforce.com," McNealy said. "What better way to make a statement than to partner with Google, the leader of Web services."

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