By William Fellows

Rolling Java up into a new software products and platform division was a sound business decision by Sun Microsystems Inc, but the remodeling of its software organization has fundamentally changed the dynamics of the operation. The changes engineered by president and COO Ed Zander put some noses out of joint and presented some demanding challenges.

Taking the free-standing Java and Jini groups locking them up into the software products and platform group together with its Unix operating system and consumer and embedded groups is a clear indication of Sun’s intent to pursue them as software brands like Solaris. Certainly it does nothing to alleviate industry unease with Sun’s ‘stewardship’ of Java. And while establishing some specific business goals for the four-year-old and unprofitable Java platform is clearly good business, pouring it into the same profit and loss center as Solaris will create other tensions. Solaris remains Sun’s only profitable software property, and even if it turns in only a small net profit, putting it together with Java and Jini automatically recasts that group as a loss-maker. Sun’s unspoken policy is to give new product groups between three and five years to make a profit.

However the departure of former Java supremo Alan Baratz just weeks after assuming charge of the new software products and platform division is said to pre-date the reorganization by some time. It was Baratz, insiders say, who had a problem with Zander’s promotion to the COO’s job at the beginning of last year. Baratz’s relationship was with CEO Scott McNealy, not with Zander who he then had to report to. Zander’s single-minded pursuit of the quarterly bottom line is at odds with the unprofitable Java business. They wonder how long it will take Microsoft Corp to capitalize on Baratz’s departure, given that it was largely Baratz’s insistence on the ‘unpolluted’ write once run anywhere Java philosophy that has kept some of Redmond’s ambitions in check.

Moreover, Baratz didn’t get any of the fun stuff in the reorganization. Former Solaris boss John McFarlane was appointed general manager of a new network services provider division reporting to Zander and web properties have gone to the Sun- Netscape alliance run by Mark Tolliver. Meantime the Java platform is pretty much cooked and the task now is to sell additional Java products to MIS managers while Jini is still some way off.