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Backwards compatibility was never a technical problem, the JVM can support heterogeneous programs written in multiple languages out of the box. As long as it all compiles down to class files everything can interoperate seamlessly.

Strong-typed alternatives to Java have existed for ages, such as Nice, KSL, and Scala, so if you want you can take your pick in mix it in with Java code right now.

As far as I understand it Sun just didn't want to fork the Java language.

I understand this, but my point is this. They add features to java e.g. generics and all the tools (IDEs) have to make adjustments to catch up. It seems to me that similarly sized adjustments could be made to support a newer cleaner version of Java (i.e. strictly better, just the low hanging improvements - really just syntactic sugar). The only additional change would be the introduction of a new file suffix, or even a version before the package declaration. The impact on the tool chain/developer adoption would be the same. This is not true for Scala and so on since here the departure is so great that the IDE support needs to be rewritten.

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