Google and Sun Microsystems Form Alliance to Challenge Microsoft's Dominance

Strategic Insights -

Google and Sun Microsystems have forged an alliance that is expected to boost their competitiveness in the desktop software business against Microsoft. The partnership, which was announced yesterday, aims to promote open source software and challenge Microsoft's grip on the software platform market. The alliance will allow Google's Toolbar to be bundled with Java software, making it available to millions more computer users. The partnership has sent a ripple of expectation through Silicon Valley, with some speculating that it could lead to a broader alliance that pushes into Microsoft's core markets.

Key Takeaways:

  • Google and Sun Microsystems have formed an alliance to promote open source software and challenge Microsoft's dominance in the software platform market.
  • The partnership will bundle Google's Toolbar with Java software, making it available to millions more computer users.
  • The alliance may extend into a broader partnership that could push into Microsoft's core markets, including the Office suite of PC applications.
  • Sun Microsystems has long championed Java as an alternative to Microsoft's Windows operating system.
  • The partnership is seen as a new front in the battle over software architecture, with Google's CEO Eric Schmidt supporting the vision of open computing platforms.
  • Sun's CEO Scott McNealy has hinted that the alliance could lead to a wider partnership that could challenge Microsoft's grip on the desktop PC market.
  • The partnership is also looking into ways of distributing a version of OpenOffice software that can be used as an alternative to Microsoft's Office suite.

Statistics:

  • 9% increase in Sun Microsystems' shares in anticipation of the alliance announcement.
  • $4.56 - the price of Sun Microsystems' shares after the announcement.
  • 29% - the percentage of Microsoft's revenues accounted for by its Office suite of PC applications in 2003.
  • 41% - the percentage of Microsoft's operating income accounted for by its Office suite of PC applications in 2003.
  • Millions - the number of computer users expected to have access to Google's Toolbar through the alliance.

Sources:

  • "Google in alliance with Sun" by Richard Waters, San Francisco (no publication date mentioned)
  • "Sun, Google set to extend reach with partnership" by Reuters (no publication date mentioned)
  • "Microsoft's Office suite revenues and operating income figures" from Microsoft's 2003 annual report (no publication date mentioned)