IBM J2EE Middleware Platform vs. the Microsoft .NET Platform ...

IBM J2EE Middleware Platform White paper

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IBM J2EE Middleware Platform vs. the Microsoft .NET Platform Which platform should midmarket-focused Independent Software Vendors (ISVs) choose?

January 2004

IBM J2EE Middleware Platform vs. the Microsoft .NET Platform Page 2

Contents 2

The Four Questions Every ISV Should Ask

3

Question #1

6

Question #2

10 Question #3 13 Question #4 17 Summary 18 Footnotes

The Four Questions Every ISV Should Ask

Midmarket companies are recognizing how technology and the Internet can help drive major organizational productivity gains by enabling them to react with speed to any customer demand, market opportunity or external threat. As a result, these companies recognize the need to automate their businesses by integrating end-to-end across the company and with key partners, suppliers and customers. They are not focused on technology for technology’s sake. Rather, they seek solutions that make better use of existing information and IT infrastructure and are choosing tailored business solutions that increase revenue opportunities and drive lower cost structures. In fact, customer IT decisions, particularly in the midmarket, are application centric; therefore, Independent Software Vendors (ISVs) that build the applications for these customers often choose the underlying technology platform on which the applications will run. With the growth of the Internet, a new computing model has emerged, shifting computing back towards the centralized model found in the mainframe world. Multi-tier or “n-tier” computing leverages the power of the Internet, allowing users to run applications with little more than a web browser. The most common n-tier architecture is three-tier, which is comprised of the client tier, the middle-tier and the backend tier. At the top, there is application software, which is the industry specific market that ISVs target. Processing occurs in between the application software and the operating system on the middle-tier or what is known as the middleware platform – the software responsible for connecting the two end-to-end. To harness the power of the Internet, ISVs must choose at least one middleware platform to deploy their applications, which is why many face both a critical financial and strategic inflection point today. Financially given limited resources, many ISVs cannot afford to invest in deploying, migrating and supporting their applications on multiple middleware platforms. Strategically, Microsoft introduced its .NET technology in June 2000 as an alternative to Java. As a result, most ISVs will have to make a critical choice on whether they migrate their existing applications to deploy to the IBM J2EE based middleware platform (or other leading Java™ 2 Enterprise Edition (J2EE) vendor’s platform) or the Microsoft® .NET platform. This decision is a profound one that will force ISVs to make a choice that will affect every one of their customers’ futures.


There has been a lot of confusion in the midmarket regarding this platform choice. The information in this paper is IBM’s attempt to clarify some of the high-level differentiated business points that an ISV should consider prior to making a final decision. The content of this paper will help ISVs make a more informed business decision for their customers as it presents findings supported by numerous sources, including industry analysts. With the business facts on the table, ISVs and their customers can decide on the best middleware platform to choose. The Four Questions

To help guide the business analysis, four questions will help ISVs fully consider the business implications of this critical technology platform decision for both themselves and their end-user customers. Every ISV should analyze and consider the following four questions before making this critical platform choice: 1. Should I build on an open middleware platform that integrates seamlessly with existing IT investments and supports business model flexibility? 2. Should I build on an established and proven middleware platform? 3. Can I afford the potential risk of competing with my partner? 4. What are the short-term and long-term costs of this platform?

Question #1

Should I build on an open middleware platform that integrates seamlessly with existing IT investments and supports business model flexibility? The Value of Open Standards-based architectures

74% of mid-market customers have mixed operating system environments, while 26% have Windows only. 1 This reality is a result of past “piecemeal” purchases which have resulted in a collection of multiple applications, operating systems and computer systems from a variety of IT vendors creating complex technology stacks to manage. Midmarket partners and customers live in a heterogeneous IT world; a fact both Microsoft Chairman Bill Gates and IBM Senior VP and Group Executive Software Group Steve Mills pointed out in a recent joint Web services announcement.2 Almost every organization uses a variety of hardware, operating systems and programming languages. As a


result, midmarket ISVs and customers are beginning to realize the real business advantages afforded by developing in an open environment. Java is an open standards-based programming language that allows customers to maintain a consistent programming model across hardware and operating system platforms. The J2EE standard allows software to be written once and run on any platform. ISVs and customers are not forced to rip and replace their existing IT assets. Instead, the Java programming language empowers them to use these existing IT assets, which helps them maximize their current investments and future return on investment (ROI). Additionally, an open multi-platform architecture increases an ISV’s and its customer’s infrastructure adaptability as well as business model flexibility. Such architectures allow ISVs to avoid lock-in to one proprietary system and/or vendor allowing ISVs and customers to take advantage of competitive forces and future vendor invention. For example, ISVs and customers are less vulnerable to vendor pricing actions when they can choose to work with another leading J2EE leading vendor because their environment is not proprietary. A J2EE open standards-based environment allows companies the business model flexibility to choose best-of-breed solutions whenever they desire that are tailored to their unique industry’s environment. Furthermore, it provides a way for those who are responsible for technology decisions to predict a certain level of functionality and interoperability from the vendors that they choose to consider. Essentially, it helps ensure that what ISVs and customers purchase and build today is viable tomorrow. IBM Offers Multi-Platform Support & Business Model Flexibility

A J2EE open standards-based middleware platform is designed to enable scalable applications to be deployed across multiple hardware and operating system platforms. As a result, IBM’s middleware supports numerous platforms. For example, IBM WebSphere® software supports over 25 major platforms today. This commitment helps enable ISVs and customers to implement their critical solutions on their hardware and operating system platforms of choice rather than being forced to switch their solution to another server. IBM’s middleware platform can help ISVs reach new markets by allowing them to sell to midmarket customers, regardless of their new or existing customer’s underlying hardware and operating systems.


IBM’s J2EE open standards infrastructure not only provides multi-platform support to help ISV applications become more competitive, but it helps ensure that ISVs and their customers’ future flexibility is secured and vendor lock-in is eliminated. Competition among Java vendors yields innovation, while .NET customers must depend on Microsoft for every new feature. Java opens choices to many J2EE vendors. Because IBM’s middleware platform is based on this open technology, development teams can take advantage of best-of-breed products from other vendors supporting the technology. Whether building or buying applications, it is in every ISV’s and customer’s best interest to insist on an open standards-based programming language. IBM does not believe in locking ISV and customer business models. Buell Duncan, IBM General Manager of ISV & Developer Relations, pointed out, “You can build on .NET and run applications in a Windows-only environment, or you can build on Java and J2EE and support Windows, IBM, HP, Sun and whomever. This is an opportunity that’s all about money and economics [for ISVs].” 3 Microsoft’s Proprietary Platform Limits Flexibility and Locks Business Models

As discussed previously, many ISVs and customers consider openness an important factor in their choice of platform. While Microsoft has participated in defining open standards in the IT industry through cooperative work on such things as SOAP and Web services, its middleware implementation of these open standards is quite different from IBM’s implementation. Microsoft’s approach leads both ISVs and customers into a closed, proprietary operating system. .NET is Microsoft proprietary, which limits choice, leads to lock-in, and leaves ISVs and customers vulnerable to pricing actions and changes in the programming model. Should Microsoft decide to change its architecture, then Microsoft ISVs and customers are locked into making additional investments to stay in line with Microsoft’s .NET technology. Furthermore, ISV developers may have a difficult time adopting the programming paradigm required by .NET, that often leads to higher developer training costs. Microsoft may argue that .NET is open, when in fact it is proprietary. The Microsoft .NET works on one platform, the Windows platform, which may require many customers to rip and replace their existing IT assets in order to create a homogeneous Microsoft IT server environment. This approach may require adding processors and machines, thus building a server farm that may require tremendous administrative overhead that midmarket customers may


not be able to afford to pay. Microsoft’s ability to effectively cover heterogeneous environments is weakened as a result. Microsoft’s latest argument is that openness is not important. “Customers should resist the emotional urge to avoid vendor lock-in at all costs,” says Microsoft.4 However, companies that see the value afforded by open platforms feel otherwise. Midmarket ISVs and their customers looking to reduce risk should thus favor J2EE. Even Microsoft’s future operating system Longhorn is seen by some, such as Tony McCune of ZDNet, as an attempt to limit open standards, “Microsoft has never fully supported open standards, and Longhorn will be no exception. Steve Ballmer says that Microsoft delivers the benefits of open standards through XML connectivity. However, the company creates new barriers to true interoperability by promoting Microsoft vendor lock-in. This defeats the purpose of open standards because Microsoft products are open only as long as one develops applications on the Window platform — and the same is true for Longhorn. This is not the case with truly open platforms, such as IBM’s, which are agnostic and run on virtually every operating system and device, from handheld to mainframes,” said McCune. 5

Question #2

Should I build on an established and proven middleware platform? IBM Middleware Platform is a Proven Market Leader

IBM’s J2EE middleware platform is a solid, flexible and standards-based foundation on which companies can build and integrate their business systems. J2EE’s maturity has allowed IBM to provide an established, reliable and secure market leading platform today. IBM’s middleware platform is not a five to six year vision. The title of a Gartner report says it all: “IBM Has Top Share in All Application Integration, Middleware Markets”.6 By partnering with IBM, ISVs partner with a proven market leader. IBM is a leader in other crucial middleware areas including data management and system management. IBM is a server-side expert with a proven platform. .NET is Not a Proven Platform

While Microsoft certainly has strengths as a desktop client-side software provider, its server-side middleware platform is far from established. Server side requirements are more demanding than desktop requirements and today


the .NET platform trails J2EE in maturity and completeness. To achieve the .NET vision, users who deploy .NET technology today may need to replace a series of placeholder products while Microsoft develops .NET over the next three to four years. In fact, very little .NET technology actually exists, which Microsoft has conceded. Bill Gates told analysts, “We knew when we did it, it would be a five – six year effort.” 7 There was actually little .NET technology in the .NET Enterprise Server family. Microsoft has dropped the name “.NET” from Windows Server 2003, citing customer confusion as the reason. “We haven’t done the best job being clear on branding,” a Microsoft spokesman said. “We started slapping .NET on too many products.” 8 IBM “Express” Software Meets Stringent Benchmarks

Unlike Microsoft and its self-admitted overuse of the .NET brand name, IBM is maniacally focused on ensuring that all of its Express branded software, developed specifically for the midmarket, meets a very strict certification process. This certification process demands that a set of stingent benchmarks be met before a product can carry the Express identifier. These benchmarks and product criteria include best in class for ease-of-use, simple installation, and overall ease of ownership, and were developed hand-in-hand with the midmarket partner and customer community. IBM is demonstrating that it is truly creating offerings from the ground up to meet midmarket Business Partner and customer needs by ensuring that Express branded products pass this strict process prior to release. J2EE Provides a Smoother Roadmap

With J2EE, ISVs and customers have a more solid foundation and a smoother technology roadmap. As a result they are able to enjoy a more stable and mature platform that can avoid disruptions along the roadmap, thus lowering cost. Pierre Fricke, Exec VP, Web Application Infrastructure, D.H. Brown, said, “IBM WebSphere is significantly more mature than Microsoft .NET. Microsoft .NET has only been available since early 2002 as an add-on to Windows 2000 Server and more recently integrated into Windows Server 2003.” The .NET Roadmap is Rocky

The .NET roadmap calls for Microsoft to replace the old generation of technology in its enterprise servers with .NET technology over many years. .NET


was announced four years after Java. The five-to-six-year .NET roadmap Gates described is critical in understanding where .NET is today and what is in store for users who adopt the technology. ISVs and their customers will be required to migrate through a series of servers–a course that will probably cause considerable disruption, complexity and instability. The complications of .NET development will grow more severe as the server replacements in the .NET roadmap progress. As it develops .NET, Microsoft continues to have trouble providing backwards compatibility for applications. Directions on Microsoft reported that installed versions of Exchange Server will not run on the forthcoming Windows Server 2003 because of “fundamental architectural changes” and that “earlier Microsoft server products also will not be compatible, and some third-party products will require patches or upgrades.” 9 The migrations and disruptions that are dictated by the .NET roadmap run contrary to data center best practices and the technology transitions are clearly not as seamless as Microsoft positions them to be. As Directions on Microsoft analyst Paul DeGroot points out, “Enterprise data centers are particularly averse to frequent or rapid changes to mission-critical software, which conflicts with Microsoft’s focus on 18-month cycles between major updates and frequent intermediate services packs and patches.” 10 The same report criticized Microsoft for caring more about “ship dates than for security and stability, creating hidden costs and concerns that outweigh, for many data centers, the benefits of lower prices.” Although Microsoft is making gains, it will “take years to gain the track record for reliability that risk-adverse data centers require,” said the report. Looming on the horizon is Project Green, the new technology platform for Microsoft Business Solutions (MBS) that has been pushed back to 2006. Datamation reported, Project Green will necessitate a massive code re-write that many fear will disrupt the technology strategies of customers, implementers, and developers alike. 11 According to industry analysts, most ISVs will face a strategic inflection point where they will need to choose between an open, proven J2EE platform that is available today or a platform like Microsoft .NET platform which is not scheduled to be fully available until 2006.


Project Green is aligned with Microsoft’s next generation operating system (Longhorn) which is speculated to arrive in 2006. 12 Tony McCune, Director of Business Development at Crosslogic, a software and consulting firm, points out how Longhorn will also require a multitude of customer upgrades to implement. “Microsoft has built its business on a model that forces customers to spend money on software upgrades every few years. Every successive upgrade restricts Microsoft’s client base to fewer options and increased dependence on its platform. Even developers are not immune to this upgrade stranglehold. In the next two years, Microsoft is planning three new versions of Visual Studio .NET: Whidbey in 2004, Orcas in 2005 and the Longhorn version of Visual Studio in 2006. Each version has a new framework that cannot be used with previous versions. Developers must continually update their skills, which cost customers’ time and money.” 13 Microsoft Security Problems Add Risk and Cost to Customers

Security is an area in which Microsoft has had considerable and much-publicized problems. Over the past few years, the security risk and cost of patching security breaches has grown severe. Microsoft has admitted that its products may not have good security. “I’m not proud,” said Brian Valentine, Senior VP of Microsoft’s Windows Division, at the Microsoft Windows Server .NET developer conference in Seattle on September 5, 2002. “We haven’t done everything we could to protect our customers. Our products just aren’t engineered for security.” 14 Microsoft’s security problems will continue, according to Valentine. “There’s no end to this,” he said. “It’s impossible to solve the problem completely. As we solve these problems there are hackers who are going to come up with new ones.” 15 Despite Valentine’s admissions, Microsoft launched an advertising campaign in South Africa claiming its software was so secure it would render hackers extinct. The Advertising Standards of South Africa ordered Microsoft to cease publications of these advertisements. “The secure software claims are currently unsubstantiated, the visual representation, which creates the impression that Microsoft software is secure, is misleading,” the ruling said. 16 A year after launching a Trustworthy Computing Program, Microsoft continues to be plagued by security problems. With its current set of products, as well as


those planned in the near future, some still feel Microsoft will be unable to provide what many would deem to be adequate protection. It appears that Microsoft is encountering difficulty in its attempts to solve security issues as demonstrated by the increasing number of Microsoft security bulletins. Microsoft has admitted to sixty-one security breaches — that’s over one a week since trustworthy computing became Microsoft’s ‘highest priority.’ 17 According to Directions on Microsoft analyst Michael Cherry, the cost of patching up Windows computers is diverting money from IT budgets that might otherwise have been earmarked for new software contracts. 18 To combat its security issues Microsoft has now actually employed a bounty hunter approach to stop hackers. The firm established a $5 million fund to pay rewards for information that leads to the arrest and conviction of those responsible for releasing malicious code. 19

Question #3

Can I afford the potential risk of competing with my partner? IBM Does Not Compete in the Applications Market

IBM exited the applications market in 1999. As customers continued to demand a thriving ecosystem of applications that were specific to their industry, segment and geographical region, IBM leaders realized that IBM couldn’t possibly be all things to all people and decided to focus on middleware and team with industry leading ISVs to deliver solutions. Rather than competing with ISVs and marginalizing their value or putting them out of business, IBM is a trusted business partner. Thus IBM’s ISV partners can more effectively focus on producing new applications. This commitment creates a strategic alignment that promotes mutual success, reduces conflict and establishes a strong foundation of trust. For IBM to succeed, its ISV partners must succeed as well. This clear and consistent strategy has been successful for both IBM and its ISV partners and has been praised by RedMonk analysts James Governor and Stephen O’Grady. “IBM’s strategy of not competing with business application vendors is likely to pay significant dividends in the SMB space. While Microsoft and Oracle both compete directly with potential ISV partners, IBM does not. By delivering products actually designed to be embedded in packaged applica-


tions, IBM is beginning to build momentum. JD Edwards and PeopleSoft are standardizing on IBM middleware, as are thousands of other smaller ISV’s — and others will follow suite given the low price points of the Express offerings, and IBM’s marketing and technical support.” 20 In the midmarket, thousands of IBM Business Partners are already working to deliver Express-based solutions. Texas-based Ascendant Technology built a solution for the Plastic Surgery Center of Hampton Roads, Virginia using IBM WebSphere Portal Express, WebSphere Application Server Express and Lotus® Sametime® to provide HIPAA-compliant automated patient registration, advanced workflow and collaboration capabilities. “Without the lower entry point of IBM Express software, we couldn’t have created an IBM solution for the Plastic Surgery Center — we would have had to go to .NET,” said Blair Hankins, chief technology officer at Ascendant Technology. “Our medium-sized customers are now discovering that IBMbased solutions are within their reach. As a Business Partner focused on small and medium businesses, the design, price and open standards support of IBM Express offerings provide the building blocks Ascendant needs to deliver IBMbased solutions.” According to Dr. Peter Vonu, M.D., F.A.C.S., the Plastic Surgery Center is becoming more of an on demand medical practice because of its new IBM Express-based solution. “Our patients appreciate the faster and more private sign-in process. Without any extra burden on our doctors or administrators, we also see about 15 more patients a week, which represents more than $250,000 a year in additional revenue. This solution paid for itself in the first three weeks.” With the new Express portfolio IBM will further enable its network of 90,000 Business Partners including local VARs, ISVs, systems integrators and consultants to deliver complete solutions to medium-sized businesses. 21 All Express offerings are Business Partner enabled; meaning that Business Partners can either sell or recommend IBM Express offerings to their customers and receive lead passing fees or other forms of compensation.


MSFT Competes in the Applications Market

According to a CRN article published in September 2003, Microsoft, with its competing interest has had problematic relationships with ISVs. This friction has ratcheted up since the company entered the business applications space over the past two years with its Great Plains and Navision acquisitions. 22 Along with these purchases and its homegrown applications in areas like CRM, many ISVs are finding themselves in direct competition with Microsoft. An IBM study completed in 2003 based on IDC market estimates, indicated that Microsoft is already competing in 18 of 45 solution areas representing almost 50% of the application market opportunity. In fact, Microsoft will invest $10 billion to develop its software offering for small and medium-sized business.23 A September 23, 2003, eWeek article also indicates that Microsoft is aiming to become a leader in the horizontal business application area while growing into vertical solutions as part of its goal to establish a $10 billion Microsoft Business Solutions division.24 The Microsoft Business Framework, based on .NET is attempting to bring all the disparate Microsoft Business Solutions offerings into a single code base and data base in two to three years. Microsoft will use shared business logic to integrate key horizontal functions ERP, CRM, SCM, which will severely challenge the midmarket Microsoft ISV partners that build their solutions on Microsoft technology. A recent CRN article points out those ISVs that choose to remain Microsoft partners are being pigeonholed into niche service areas and being adversely impacted by eroding margins.25 Prior to choosing an IT vendor and partner, ISVs should recognize that Microsoft could change from a partner to a major competitive threat overnight. Some ISVs have expressed reservations regarding partnering with Microsoft due to Microsoft’s actions. “...We find IBM to be much more of a partner. With Microsoft, it seems more like a ‘we want to purchase your installed base conversation. Sleeping with Microsoft is like sleeping with a tiger.” 26 “IBM has assured us that they don’t compete with their partners. That’s reassuring to a company like ours, that there’ll be an open, mutually beneficial relationship. With Microsoft, one doesn’t get that feeling. Their move into business apps just underscores that.” 27


In a CRN article, Microsoft partners acknowledge that they are wary of the company’s product plans, which they believe may be competitive with their own offerings in the future if not now. Many cite an attempt by Microsoft years ago to recruit ISVs to write vertical capability atop Microsoft Office. That effort failed, leaving ISVs complaining that Microsoft left them no room to add value.28 Best Software President and CEO Ron Verni told VARBusiness that Microsoft had sworn to him several years back that it would not enter the business-applications market, only to turn around and do exactly that.29

Question #4

What are the short-term and long-term costs of this platform? IBM Middleware Platform Provides an Affordable Entry Point to e-Business on Demand

This paper has already covered some of the hidden, long term costs that come with solutions based on an unproven proprietary platform; however IBM’s middleware platform is competitive on a short-term basis as well as long term. The platform provides customers with a generally affordable entry point to e-business solutions and allows ISVs to realize higher profit margins on their solution sales. The IBM Express solutions are designed, developed and priced exclusively for midmarket businesses and include hardware, software, services and financing offerings. Unlike similar Microsoft middleware offerings, IBM’s Express offerings include one year of maintenance and support while providing the customer with the greatest flexibility to leverage existing IT resources. With Microsoft, customers need to pay money each time they have a question. In addition, customers must purchase a separate software assurance package to be entitled to upgrades of the product. All of this is included in IBM’s competitive price. For example, both the IBM WebSphere Application Server–Express and IBM Websphere Portal-Express offerings provide per user pricing in order to provide an affordable price point for midmarket customers. WebSphere Application Server * – Express

WebSphere Portal * – Express

– Express Plus

Intranet User

$25 per user / 20 ** (dev’t seat included)

User

$85 per user / 20 **

Processor

$2,000 per CPU

(max 2,000 users)

$135 per user / 20 ** (max 2,000 users)

Add’l Dev’t Seats

$400

Processor

$33,300 per CPU

$53,080 per CPU

(max 4 CPU per user)

(max 4 CPU per user)

*Prices as of 12/19/2003. Prices subject to change. **Sold in packs of 20


Competitively Priced Products

IBM’s Express products portfolio are also priced very competitively versus similar Microsoft middleware offerings as illustrated in the below pricing scenarios. PRICING SCENARIOS * Inventory Management

WebSphere Application Server – Express

Microsoft Windows 2003 Server

Provide support for 50 employees

$2,000

$5,845

to inventory management system

• Unlimited users

• Upgrade access to 50 additional users

• Maintenance & upgrade protection • 1 set of developer tools

• Maintenance & upgrade protection

plus Internet access for customers to track order status.

• Technical Support Employee HR Portal

WebSphere Portal – Express

(10 included with Windows 2000 Server)

• 1 set of developer tools • No technical support Microsoft Sharepoint Portal Server

Provide access to Human

$17,000

$22,749

Resources portal supporting 200

• 200 users • Maintenance & upgrade protection

• 200 users • Maintenance & upgrade protection

registered users.

• Technical Support Business Integration

WebSphere Business Integration Connect – Express

• No technical support Microsoft BizTalk Server 2002 Standard Edition

Provide distributor ability to

$3,750

$14,997

execute exchange business

• Gateway & support for 5

• Gateway & Support for 10

partner connections • Browser based tooling for definition

partner connections • SQL Server Standard Edition

and management • Maintenance & upgrade protection • Technical Support

• Maintenance & upgrade protection • No technical support

information with small number of partners.

Basic Commerce Site

WebSphere Commerce– Express

Microsoft Commerce Server Standard

Deliver a basic B2B or B2C

$20,000

$26,795

e-commerce site, one-processor

• Production & staging server • Database (DB2 Express)

• Production & staging server • Database (SQL)

• Developer license • Maintenance & upgrade protection • Technical Support

• Developer license • Maintenance & upgrade protection • No technical support

license plus pre-production staging environment.

*Prices as of 12/19/2003. Prices subject to change. Operating system considered a sunk cost

The Linux Open Source Advantage

Finally, IBM is the leading supporter of the Linux open source movement. By teaming with IBM, IBM Business Partners and customers can take advantage of the inherent long-term cost savings afforded by Linux-based solutions and may harness significant cost savings over proprietary alternatives.


While Microsoft declared Linux a threat to its future in its 2003 annual report, IBM invested $1 billion in Linux to back its open source commitment. IBM has effectively used this investment in numerous areas to assist its partners in getting educated and enabled to service and deploy Linux-based solutions. This investment helped to support Linux facilities that are available to Business Partners such as: Linux Technology Center, Linux Integration Center, Open Source Development Lab, Linux Porting Centers, Solution Provider Labs and Linux Competency Centers. A July 2003 report by the Sageza Group probably best summarizes the Linux advantage that IBM Business Partners and midmarket customers can capitalize on: “Relative to rival proprietary solutions, Linux is proving a cost-effective and stable environment for deployment in Small and Medium Businesses (SMBs) while ISV support for the desktop, middleware, and ebusiness is impressive and growing.” 30 “Financial personnel should take note that migrating to Linux can afford SMBs substantial cost savings over proprietary alternative applications, while IT departments will understand Linux’s increased flexibility as an infrastructure solution. Linux can be installed on platforms from numerous vendors, which provides greater flexibility in migration costs while mitigating concerns regarding hardware vendor lock-in over time. In addition, Linux can also be deployed on under-utilized or repurposed hardware, thus granting the SMB even greater flexibility. Similarly, Linux offers increased scalability for important software applications. Solutions that were once deemed too expensive for the SMB due to the cost of the hardware and the vendor’s cost to develop the applications on multiple hardware platforms can now take advantage of the lower-cost structure of the Linux platform to deliver a new class of SMB solutions at affordable price points. This cost structure takes a number of forms, including the ability to purchase a Linux license to be deployed across a company’s IT environment without paying additional per-server fees. With this and other newly affordable solutions, SMBs can seek to improve their flexibility, sharpen their competitive advantage, and garner customer insights once thought unavailable. Linux can provide a competitive advantage to SMBs that is analogous to what e-business did for SMBs in the early 1990s. This is a particularly appealing aspect of Linux as SMBs are rightly focused on future growth potential; migrating to Linux presents SMBs with a broader range of options for current and future business operations than many other solutions.” 31


CRN’s interview with David Stutz, the star Microsoft developer and ex-general program manager for Shared Source who quit Microsoft over philosophical differences, pointed out that Microsoft’s response to the open source movement has been less than fruitful. The CRN interview quoted Statz as saying in his letter, “Digging in against open source commoditization won’t work. It would be like digging in against the Internet, which Microsoft tried for a while before getting wise. Any move toward cutting off alternatives by limiting interoperability or integration options would be fraught with danger, since it would enrage customers, accelerate the divergence of the open source platform and have other undesirable results. Despite this, Microsoft is at risk of following this path, due to the delusion that goes by many names: ‘better together’, ‘unified platform’, and ‘integrated platform.’” 32 Jupiter Research found in a recent study that SMBs are turning to Linux and other open source products as a lower-cost alternative to Microsoft’s business software. 33 The Open Source Eclipse Platform

IBM’s open standards support goes beyond Linux and J2EE and encompasses the high growth open source Eclipse platform. IBM donated $40 million of its software tools as the first step toward founding an open-source organization for developers. 34 Spearheaded by IBM, the Eclipse project is a community of companies building software to integrate different types of application development tools in a single framework, which aims to make developers more productive by using a wide array of tools in an open environment that address the entire software lifecycle. Eclipse success has been substantial and it serves as yet another indicator of continued open source success. The Eclipse organization has more than tripled in size since it was launched in 2001 and download requests have exceeded 18 million. IBM shepherded Eclipse into a thriving community that is now a standalone organization that IBM participates in but does not own or run. Developer productivity is also a key consideration for ISVs. As a RedMonk report highlights, “Another key question is developer productivity. How fast can apps be developed and how well can different development roles, such as modelers, scripters and code junkies be integrated? In this area IBM has gained significant competitive advantage by open sourcing lower level functions, such as basic software change management and code editing, through the Eclipse


project. Even IBM has been surprised by the momentum here — hundreds of ISVs and tens of thousands of developers have adopted Eclipse as their development environment of choice, which brings many new customers.” 35 Summary – Make the Right Platform Choice

Answering these four questions helps to better analyze the various aspects of the critical middleware platform decision. IBM’s middleware platform is the right choice for ISVs that are building on demand applications, and has obvious advantages over the competition.

IBM Microsoft Middleware .Net Platform Platform Provides a proven, reliable, and secure marketing leading platform today

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Allows ISVs to build on a solid open standards-based J2EE foundation that provides a

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smoother technology roadmap Designed to enable scalable applications to be deployed across multiple hardware and operating

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systems platforms Does not compete in the applications market

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Allows ISVs and customers to take advantage of the inherent cost savings afforded by key open source technologies such as Linux and Eclipse

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IBM Server Group IT Trends Study, 3Q03. Wall Street Journal, “Microsoft, IBM set standards pact,” William Buckley, September 2003 3 VAR Business, Buell Duncan IBM GM, Partner World, May 2003. 4 Microsoft Corp., “Microsoft .NET and IBM: A Comparison,” July 2002. 5 ZDNet, “Five myths about Wronghorn,” Tony McCune, November 17, 2003. 6 Gartner Group, “IBM Has Top Share in All Application, Middleware Markets,” Joanne Correia, Yefim Natis, Massimo Pezzini, Roy Schulte, May 7, 2003. 7 Bill Gates, Microsoft .NET Briefing Day, Redmond, Washington, July 24, 2002. 8 San Jose Mercury News, “Microsoft reels in its .Net tag,” Kristi Heim, January 9, 2003. 9 Directions on Microsoft, “Applications Require Updates for Windows .NET Server,” Peter Pawlak, December 16, 2002. 10 Directions on Microsoft, “Microsoft Aims at the Enterprise,” Paul DeGroot, December 2001. 11 Datamation, “To Figure Out Microsoft, Keep an Eye on its Partners,” Joshua Greenbaum, November 20, 2003. 12 InformationWeek, “Microsoft is Keen on Green,” John Foley, October 6, 2003. 13 ZDNet, “Five myths about Wronghorn,” Tony McCune, November 17, 2003. 14 Computer Weekly, “Microsoft: ‘Our Products Aren’t Engineered for Security,’” September 6, 2002. 15 Ibid. 16 The New York Times, “Microsoft Pulls Ad Found Misleading,” AP, March 24, 2003. 17 From Steve Ballmer’s keynote at Microsoft’s World Wide Partner Conference, as reported in eWeek by Peter Galli, “Ballmer : Security Tops Microsoft’s Priority List,” October 9, 2003. 18 Directions on Microsoft, analyst Michael Cherry, AP January 2003. 19 Wall Street Journal, “Microsoft is looking for few good bounty hunters,” November 10, 2003. 1 2

RedMonk, “Evolution and Extinction: The Application Server Market in 2003 and Beyond,” James Governor and Stephen O’Grady June 26, 2003. 21 Line56.com, “IBM Expands Express,” Demir Barlas, October 31, 2003. 22 CRN, “Ballmer, Watson Reassert Microsoft’s Commitment To Partners, ISVs,” Barbara Darrow and Steven Burke, September 30, 2003. 23 Reuters, “Microsoft to Pour $10 billion on small biz,” November 23, 2003. 24 eWeek, “Microsoft to Pour $3 Billion into Office,” by Peter Galli, September 23, 2002. 25 CRN, “MBS Partners lose CRM Exclusivity,” Barbara Darrow, July 24, 2003. 26 CRN, “IBM To ISVs: Choose Us , Not Microsoft,” Barbara Darrow, quote from Van Symons, President of Clear Technologies, October 7, 2003. 27 CRN, “IBM To ISVs: Choose Us , Not Microsoft,” Barbara Darrow, quote from Philip Brittan, Chairman of Droplets October 7, 2003. 28 CRN, “IBM To ISVs: Choose Us , Not Microsoft,” Barbara Darrow, October 7, 2003. 29 VAR Business, “Annual Report Card: Marathon Training,” Carolyn A. April, October 8th 2003. 30 The Sageza Group, Inc., “Penguin Dreams: Can Linux Help SMBs to Fly?”, Clay Ryder, July 2003. 31 The Sageza Group, Inc., “Penguin Dreams: Can Linux Help SMBs to Fly?”, Clay Ryder, July 2003. 32 CRN, “Star Microsoft Developer Quits Over Philosophical Difference,” Barbara Darrow, Feb. 14, 2003. 33 Computer weekly.com, “SMBs see open source as alternative to Microsoft,” Stacy Cowley, July 17, 2003. 34 NewYork Times, “Some I.B.M. Software Tools to Be Put in Public Domain,” Steve Lohr, November 5, 2001. 35 RedMonk,“Evolution and Extinction: The Application Server Market in 2003 and Beyond,” James Governor and Stephen O’Grady, June 2003. 20

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