Systems Outlook: Hardware's Still Big Part Of Strategy - InformationWeek

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6/24/2005
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Systems Outlook: Hardware's Still Big Part Of Strategy

Sun Microsystems is hoping that its moves to open-source Solaris and pieces of its middleware will attract more software developers--and lead to more applications that require the licenses and equipment for which the vendor does charge.

The reason to buy Sun, argues chairman and CEO Scott McNealy, is that successive generations of its technology don't impair applications written for the old equipment. "All technology has the shelf life of a banana," McNealy says. "Anything that Oracle or IBM or Microsoft or Sun sells is obsolete within 18 months." So somewhere between 18 months and five years these companies have to exit their technology, he says, and "I don't want people to lose sight of the fact that IBM's weak point is barrier to exit." This from the man who spent years holding out the virtues of the company's UltraSparc chip for everything from low- to high-end platforms against the steady advance of the x86 architecture, changing strategy only two years ago when it began shipping systems based on Advanced Micro Devices Inc.'s Opteron processor.

Sun's server shipments grew from 264,000 units in the first quarter of last year to 355,000 in the fourth quarter. Its systems are capable of running Solaris 10, Java Enterprise System, Red Hat, and SuSE Linux. That includes Sun's x86-based processor line, which has been growing rapidly during the past 18 months. "In some cases, the only difference you're going to see in the different platforms is solely the MPU inside the server," executive VP John Loiacono says.

Sun will be aggressive in adding new systems based on Opteron in the coming months, Loiacono says. That includes the debut this week of the first Opteron-based workstation, a broader selection of single, dual-core, and four-core servers, and a new blade-server platform. "We've gone from nowhere in the x86 market to being a real player," he says. By late this year, Sun plans to ship systems in a new line called Galaxy that will run on Opteron chips and can use virtual machine technology to switch between Solaris, Linux, and Windows modes. Sun co-founder Andy Bechtolsheim, who rejoined the company two years ago, is the lead designer. "We got Andy Bechtolsheim back for just this space," Loiacono says.

At the same time, Sun is betting it can replace clusters of x86 machines for high-volume Web apps like searching and E-commerce with a new chip called Niagara, due early next year. The eight-core chip will run 32 threads to provide maximum throughput and more easily accommodate multiple applications. "We'll just obliterate those commodity boxes," Sun fellow and VP Marc Tremblay says.

Further up Sun's product line is the next-generation Sparc chip, code-named the Advanced Product Line and designed with Fujitsu Ltd. Systems are due by 2007. The deal with Fujitsu also lowers Sun's internal development costs--it transferred the research and development slated for a canceled UltraSparc V chip to the Niagara line.

Sun's recent moves to become a less-proprietary company on the hardware side have been necessary for it to survive and potentially thrive in the years ahead, says Gordon Haff, an analyst with Illuminata. "The alternative would have been 'UltraSparc now and forever,'" Haff says. That was a sure no-win situation, and while there's no guarantee that its new direction will make all the numbers add up right, "it's a better move than pretending the market hasn't changed," he says.

Sun also has been increasing its end-to-end systems portfolio with an expansion of its storage capabilities. Its acquisition of network-attached storage intellectual property from Procom Technology Inc., which closed earlier this month, and the pending $4.1 billion acquisition of Storage Technology Corp. will give it a broader and deeper storage portfolio. Sun hopes that its ability to serve customers with more open systems across a range of hardware and software needs will make it a compelling alternative to other providers who can do the same--chiefly, IBM.

Return to main story, Sun Opens Up

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