Mitch Kertzman: on 'geopolitical warfare.' (Sybase chairman discusses business competition)...

War has always been a popular metaphor for business competition. We talk about "tactics and strategies," "taking the high ground," and "outflanking the enemy." But great powers don't just compete on the battlefield, says Sybase chairman Mitch Kertzman--they also engage in "geopolitical" struggles

Currently, Kertzman argues, the emergence of the Internet has triggered a major geopolitical struggle between companies (like Microsoft and Sybase) that are dedicated to desktop-centric computing and those (notably Oracle and Sun Microsystems) who want to return control to centralized IS organizations. "If you don't plan your business in the context of the rules and the dynamics of this geopolitical war," he recently warned the members of the Massachusetts Software Council, "you could get hurt." Some excerpts:

On overthrowing the leader: "Since platform shifts and paradigm shifts are the times when dominant companies stumble and fall and potentially fail, and when new companies are created and wealth is created, there's an opportunity to knock off the powerful leaders. There is no one more powerful and no one who many people desire knocking off more than Microsoft. As a result, a lot of the strategies around the development of the Internet have developed for the purpose of basically dislodging Microsoft's position of leadership. In fact, if you look at Jim Clark's original plans for Netscape, if you look at the strategies Netscape and others have followed, you will find that part of the strategy was indeed to find and create the next platform shift."

On geopolitical winners and losers: "The context of the geopolitical war is really a great battle between the recentralization of computing and the model of distributed computing. For example, it may be fairly obvious that the Network Computer is all about empowerment of more users, getting the cost of ownership lower, etc. But I would argue that network computing architectures, both Oracle's and others generically, lead to a recentralization of computing. The theory here says that if computing recentralizes, it would be that recentralization which would most disadvantage Microsoft."

On the vulnerability of market leaders: "We all say that good companies listen to their customers, and great companies really listen to their customers. Part of the problem of listening only to your customers is that your customers rarely ask you for the next generation of software. What our customers like to ask us to do is invest our R&D dollars in enhancing the products we've already sold them, and then they think about buying the next generation from somebody else."

On the appeal of the "old dictators": "The Russians got a few years into democracy and free markets, and what did they say? 'This is messy. It's complicated, and my life certainly isn't very much better. In fact, it seems worse than it did. Those old dictators sure look attractive in retrospective because my life was predictable and they would tell me what to do." As an industry, we've brought our customers a few years into distributed computing and what are they telling us? 'It's kind of messy. It's complicated. The desktop is more expensive to maintain and support than we thought it would be." Sure enough, there's no shortage of would-be dictators who would like to take us for the first time backwards in computing architectures to the recentralization of computing."

On the Java arms merchants: "Every good war has its arms merchants. Today that role is filled by venture capitalists. In fact, the leading arms merchants in the geopolitical war are Kleiner, Perkins. Kleiner, Perkins created a pool of $100 million of capital purely to invest in Java companies, to build the weapons of the geopolitical war. The nature of arms merchants is they make money no matter who wins."

Mitchell Kertzman, CEO, Sybase, 6475 Christie Ave., Emeryville, Calif. 94608; 510/922-8538. E-mail: kertzman@sybase.com.