RealTime IT News

Sun Fights Rumors, Old Perceptions

When Sun Microsystems President and COO Jonathan Schwartz made his pitch to financial services customers at an event in New York Tuesday, he provoked a flurry of neutral to skeptical comments among analysts that cover the company.

This should come as no surprise. New products aside, Schwartz pledged several moves to erase the perception that Sun is an expensive, proprietary company that doesn't listen to its customers.

For one, he said Sun has qualified 249 systems to run on x86 using Solaris. This includes the ability for Linux applications to run on Solaris, offering customers a multi-platform environment that is, as Schwartz said, "unlocked" from the company's SPARC chip architecture.

In this regard, the Santa Clara, Calif., company is gunning for the largest Linux distributor, promising a better value proposition with Solaris compared to Red Hat Linux. Moreover, the concern is promising round-the-clock Linux support worldwide.

In other examples, Sun is offering utility pricing of $1 per processor per hour for parallel workloads run on Sun's grid, as well as new features for Solaris 10 when it becomes available before year's end.

The recurring theme Schwartz wanted the audience to take away was that Sun is the right choice because it offers the most complete hardware, operating system and middleware stack to which the competition "can't respond."

Merrill Lynch analysts questioned those facts in a research report issued after the conference.

"Part of Schwartz's argument depends on (a) customers being fed up with Linux support -- particularly Red Hat -- and (b) Solaris offering a better and cheaper alternative onto which customers can shift workloads," said the report. "Even if Solaris is better, it's hard to change the mind of the customer. We do think Sun's announcement of global Unix/Linux support is smart marketing, because it positions Linux within Sun's historical expertise, which is credible given the relationship between the code bases."

Forrester analyst Frank Gillett attended the event and noted that Sun is looking to wipe away some of the skepticism that befell it in the last few years. By offering Solaris as the platform of choice for customers wishing to run Linux applications, it is sending a clear shot across the bow of Red Hat.

"Obviously, Sun would prefer that customers run Solaris, but if customers want to run Linux, they can say 'you can use Solaris'" as the platform over Red Hat, Gillett told internetnews.com.

As for the $1 per hour per CPU utility computing model, Gillett said that while it seems attractive on its face, customers need to see if it is cost-effective for the specific implementation they require. In other words, it's not necessarily a one-size-fits-all proposal.

Merrill Lynch echoed those sentiments in its research report.

"Utility pricing is intriguing but easier said than done -- a year's worth of operation on one processor works out to be $8,760, which means it is only likely to be cost effective (from a hardware standpoint) on occasional peak workloads that would otherwise leave owned equipment mostly idle," according to the report. "Unless Sun can attack the human management costs (beyond the costs of transferring workloads), the pricing does not appear disruptive to us at first glance."

Moreover, the report cast doubt on the novelty of utility computing, noting that customers are sophisticated enough to finance purchases with their own capital, with third parties' capital, or with vendor capital/vendor subscription models.

Sun Fights Rumors, Old Perceptions

Rumors of Sun's demise in the past year, Gillett said, were exaggerated, and echoed a Forrester position paper he co-authored in which he wrote that Sun executives are confident and excited -- hardly the sign of a company going the way of dead dogs like Data General.

"Sun is in a huge experimental mode right now," Gillett said. "They feel confident about their technological innovation."

Still, Gillett said that while Sun is pledging to "take back Wall Street," he said it is more likely Sun will find success with new customers than wrangling customers away from Red Hat on the operating system side, or IBM , HP and Dell on the total systems side.

Sun Executive Vice President of Software John Loiacano doesn't think Tuesday's news was out of character for Sun, noting that CEO Scott McNealy and Co. have a history of bringing disruptive technologies to bear in the market.

Charged with overseeing Solaris and Java development, he admitted that Sun has taken its lumps from the market, media and analysts in the last few years, but believes it has turned the corner.

"Over the last couple of years I've been part of the transition from where we were to not knowing where the bottom is to feeling like we bottomed out," Loiacono told internetnews.com in an interview after the event. "Now we're seeing some sustained optimism and we're solidifying the strategy and working on a new implementation of the strategy."

A 17-year veteran at Sun, Loiacono said Sun's peaks and valleys can almost be charted every 10 years. Founded in 1982, Sun had a couple of lean years before beginning to sell network computers and later workstations that sold well on Wall Street.

In 1993, he said, the company hit a lull that was in keeping with the recession. Then, after evolving from a workstation provider to a server company in the mid-to-late 90s, he said Sun hit bottom in 2003 when as much as 44 percent of its business dropped off the table.

As a software executive, Loiacono said Sun has had to fight to establish itself as more than just a "box or server" company, and has steadily built a solid reputation as a provider of Java applications and operating systems. The executive recalled an event geared to educate the public about Sun software in New York last year.

The 30 or so people who attended had the attitude of "I'll believe it when I see it," Loiacono said. While he admits the company had struggled with its messaging around software in the past, he said that tide is turning.

"Even over the last few years, I've had people tell me 'I didn't even know you were in the software business,'" Loiacono said. "Then I explain our software strategy and they say 'Great, show it to me.' We couldn't do that before. What's happened is we've had two years of righting the ship and getting rid of dead wood to where we are now in the execution stage and delivering what we said we would."

Loiacono said Solaris 10 will be officially announced with all of its features in November, and will ship shortly thereafter.