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Do telcos have an inferiority complex?
By Rich Karpinski

Jun 19, 2008 4:01 PM


I’ll admit, that somewhat inflammatory headline was meant to draw you into reading this story. But the provocative question comes not from me, but from Sun Microsystems chairman and co-founder Scott McNealy, who expressed that concern at a lunch meeting this week at NXTComm08.

McNealy -- best known for building a massive IT business around Sun’s own chips and “open” software like Unix and Java – was at the show to give a Wednesday keynote and court customers. He noted that 17 of Sun’s top 20 customers are communications providers of some sort or another, which meant his concerns about telco competitiveness impact his bottom line as well.

McNealy’s position is that it is absurd for service providers – given their strengths in networks, subscriber relationships, billing systems and more – to be ceding the next-generation communications market to anyone, be it Web players or content companies or whomever.

McNealy urged service providers to leverage those assets and relationships to build the premier “destination sites” for both consumers and businesses. He repeatedly held up his own Blackberry and clicked a single button to access email, a click that went to RIM’s Blackberry service rather than a carrier messaging service. Carrier-provided cell phones should offer one-click access to carrier messaging, calendar, address book, content services and more – competitors be damned, was McNealy’s central message.

McNealy certainly knows a thing or two about competition. For years, he’s waged cutthroat battles with IT competitors ranging from Microsoft to IBM to Oracle. He’s known for cracking wise on his fellow CEOs, especially Bill Gates. That made it all the more telling, when asked at lunch what thoughts he had for his retiring competitor Gates, that McNealy demurred to wax nostalgic about his rival: “I’m not here to have feelings, I’m here to deliver results.”

Sun’s McNealy also aims to help service providers deliver results, positioning his company as a neutral “arms provider” in the telecom wars. His company doesn’t compete with service providers by delivering consumer Web services or getting into the wireless business or offering hosted computing services.

Instead, Sun of late has been showing carriers what McNealy called a pre-packaged “destination site infrastructure” – essentially everything a carrier needs, from chips to OSs to databases to application servers – to build services to compete with the Google’s of the world. He cited work with Telstra on its Big Pond initiative and Verizon’s planned enterprise computing on-demand effort – projects for which Sun supplies equipment– as examples of how service providers can get over their “inferiority complexes” and compete head-to-head with rivals in battles that McNealy says they are well-equipped to win.

E-mail me at rkarpinski@telephonyonline.com.

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