General Motors Signs Biggest Java Deal Ever

For Sun, the GM deal and another with General Electric are signs of a rebound
A week after reporting a loss of more than a quarter-billion dollars, General Motors Corp. has signed the largest Java software deal in history to build a services-oriented architecture aimed at driving down IT costs.

The Java Enterprise System from Sun Microsystems and Sun's Solaris 10 operating system will be key to a services-oriented approach that spans the company, including manufacturing, product development, sales and marketing, and purchasing, says Fred Killeen, director of systems development and the interim chief technology officer at GM.

The automaker will use Java Web Infrastructure Suite and Java Application Suite, and it likely will add Java Identity Management Suite, Killeen says. Being able to quickly add preconfigured elements of the Java platform should enable GM to cut IT development costs. "The fact that [Java Enterprise System] can be provisioned to us as a pretested and pre-integrated system is very attractive as we seek to get more value out of our development investment," he says. "Spending dollars on integration of components doesn't add any value."

GM isn't in a position to waste capital. The company reported a $286 million loss in the second quarter ended June 30, and for the first half of the year it has lost $1.4 billion.

Sun's Java Enterprise System will help General Motors cut IT costs, Killeen says.

Sun's Java Enterprise System will help General Motors cut IT costs, Killeen says.
The GM deployment of more than 320,000 seats of Java Enterprise System, along with a Java deal that's scheduled to be disclosed this week with General Electric Co., are signs that Sun's software strategy of the past few years is gaining momentum, says John Loiacono, executive VP of software for Sun. Sales of Java Enterprise System doubled in the recently ended fiscal year, according to Sun. GM wouldn't disclose financial details of its Java deal.

Sun maintains that a transformation of its business has been building in the form of licenses for its open-source Solaris 10, commitments by some of the largest companies in the world to use its software, and growth in server shipments in the past fiscal year. The company still lost $11 million in its fiscal year ended June 30, though that's better than the $388 million prior-year loss. Sun's overall revenue stagnated for the fiscal year, dropping 1% to $11.1 billion.

"They're not sitting there covering their heads and just hoping things get better," says Gordon Haff, an analyst with Illuminata. "They've got an awful lot of things going on, some of which are clearly connected to making more money, but some of which the bottom line isn't that apparent. But they've clearly avoided meltdown, which was a real danger for a while."

Within the past seven months, Sun has opened-sourced Solaris 10 and its Java application server, expanded its portfolio of servers based on Advanced Micro Devices Inc.'s Opteron processor, and revealed its intention to buy Storage Technology Corp. for $4.1 billion.

Some early results are positive. Last week, Sun said it had signed up more than 2 million open-source licenses for Solaris 10 and is adding new licenses at the rate of about 11,000 per day. Sun saw a 9% increase in all server unit sales in its latest fiscal year and a 105% increase in servers based on Opteron.

In the deal with General Electric, Sun says GE will deploy the Java System Identity Manager, a component of the Java System Identity Management Suite, across 11 business units globally servicing more than 400,000 workers. The software will let GE automatically and securely provision and deprovision user accounts based on an individual's job function, geography, and role.