Rivals take issue over web services

The battle for the hearts and minds of software developers intensified last month with Sun Microsystems and Microsoft redoubling efforts to win support for their Java and .NET strategies respectively.

The two companies have a long history of sniping at each other but hostilities have increased markedly as both camps try to stake a claim to the fast-growing market for technologies to develop web services - "a multibillion-dollar market opportunity," according to IDC, the IT research company.

Sun believes its Java-based technology holds the key to making web services work and wants to keep tight hold on it. At the beginning of March, Sun filed a lawsuit alleging that Microsoft had tried to damage Java by forcing companies to "distribute or use products that are incompatible with Java".

Last week, the battle intensified when Scott McNealy, Sun's chief executive, took the stage at the Sun-sponsored JavaOne developer conference in San Francisco and warned of the dangers of monopolists "hijacking" the open standards that underpin the internet.

Meanwhile, Microsoft has just unveiled a second "beta" or pre-production release of Visual J# - pronounced "J Sharp" - a development tool for Java developers who want to build applications and services on the Microsoft .NET Framework.

Industry experts see the development of the J# tool as a clever move by Microsoft. It accepts the success Sun has achieved with Java, particularly with programmers who see Java as a trendy alternative to older languages such as Microsoft's own Visual Basic.

J# promises the best of both worlds. Programmers can keep using Java, while the companies they work for can align their IT strategies around Microsoft's .NET initiative.

Not surprisingly, Sun has a different view of the world. It has build a broad base of industry support for its rival Java-based platform called Java 2 Enterprise Edition (J2EE).

The two approaches have led to a religious war in the IT industry which, experts say, deflects attention from the real issues.

"The jury is still out on .NET while J2EE has been around a lot longer. Nevertheless, the more interesting debate is how we can use web services as a mechanism to bridge different architectures," says Graeme Allan, European vice-president of Lutris Technologies, one of the software vendors in the J2EE camp.

Some vendors are trying to keep a foot in both camps. IBM, for example, was a sponsor of last week's JavaOne conference, and is also a sponsor of Microsoft's TechEd conference, which takes place next week in New Orleans. More than 200 technical sessions will try to convince developers of the benefits of creating web services on the Microsoft .NET platform.

Microsoft has already scored one big success by convincing Deutsche Telekom, Europe's largest telecoms company, to use .NET to develop the web services it wants to deliver to wireless devices. The announcement was made at last month's CeBIT fair in Hanover by Steve Ballmer, Microsoft's chief executive.

Sun's latest lawsuit over Java marks the end of the uneasy peace which has reined since the two companies settled an earlier Java-related lawsuit in January 2001. Then, Microsoft was ordered to pay Sun $20m but was allowed to continue distributing an older version of Java - Microsoft was an original licensee of Java in 1997.

The battle over Java implementations may seem arcane but Sun sees it as crucial in its attempts to promote J2EE as a serious and reliable alternative to .NET for business applications. (The May 1 issue of FT-IT will be looking in detail at web services. More details in  Looking Ahead section of www.ft.com/ftit).

THE MONTH IN BRIEF

Carly's conquest

The $21bn acquisition of Compaq Computer by Hewlett-Packard got the thumbs up from HP shareholders, although the definitive result will not be known for several weeks. Carly Fiorina, HP chief executive, claimed the merger had been approved by a "decisive majority" of shares not affiliated with the Hewlett and Packard family foundations, which opposed the deal.

The merger creates an industry giant with nearly $90bn in revenues - and some formidable integration and cultural headaches if past industry mergers are anything to go by. Mindful of the challenge it now faces, HP has created a team of more than 1,200 people to work through the issues of bringing together HP and Compaq product lines.

Analysts predict tough medicine will have to be taken including the axing of one of the two desktop personal computer brands. Even with a single brand, the enlarged company faces an uphill struggle, particularly in the US corporate market where Dell Computer is the clear leader and was the only big PC vendor to increase its market share in 2001.

In Unix servers, HP is runner-up to Sun, which last year sold more servers than HP and IBM, the third biggest vendor, combined.

IT services forecast

Europe's IT services market will not revive until 2003 , says Forrester Research in a new report. Services is one of the few areas where European IT firms can hold their own against US rivals, but the European IT services market is likely to grow only moderately over the next five years to reach E120bn by 2006, a 35 per cent increase on 2000.

One bright spot is outsourcing where growth is accelerating due to what Forrester calls a "fundamental shift in attitude" among large companies.

Accounting probe

Network Associates is the latest victim of Wall Street's witch hunt for companies with unorthodox accounting practices. The US Securities and Exchange last week launched a formal investigation into the company's revenue recognition policy.

The probe comes at a delicate time for Network Associates which has launched a contested tender offer for the shares it does not already own in McAfee.com, a website selling antivirus software. McAfee.com was spun off by Network Associates in 2000 with the parent retaining a majority stake. However, its rebellious sibling has now called Network Associates' offer inadequate.

Crunch for Netscape

Remember Netscape Navigator? The once market-leading browser now has just a 6 per cent market share. The recent release of Microsoft Internet Explorer 6 has apparently caused many die-hard supporters finally to abandon Netscape, now owned by AOL Time Warner.

"Although it looked originally as though Netscape had an entrenched core user base, IE6 has managed to take significant market share. It's do or die time now for Netscape," says Geoff Johnston, vice president of marketing at StatMarket, an internet usage service.

PC forecast boost

Finally, some good news for the struggling computer industry. IDC, the market research company, has raised its forecast for worldwide PC shipment growth in 2002 to 3 per cent. The firm's previous forecast, in December 2001, saw the PC market growing at only a glacial 1.8 per cent.

After a disastrous 2001, the PC market seems to be getting back on track. "Consumer buying should follow a normal seasonal pattern, and purchasing activity by commercial entities is expected to rise slowly but steadily," says Roger Kay, director of client computing at IDC.

Retail sales in the US and growing demand in western Europe were key factors in IDC revising its numbers upwards.