The company aims to cement itself as a long-term industry-cornerstone provider of operating-system software, increasing its overall position in mainstream computing environments. Schwartz sees an "epic battle" ahead among Microsoft, Sun, and Red Hat. "Going forward, the dominate operating systems will be Microsoft Windows, Sun Solaris, and Red Hat Linux," Schwartz says. "Those are certainly the two targets we're focused on."
Sun is being cagey about the exact timing of when it might make Java Enterprise System available as open source. Schwartz said if Sun were to make such an announcement, it would come in the second quarter. But he went on to leave little doubt that the open-source approach is Sun's game plan for gaining a distinct advantage over its middleware competition. The pending release of Java Enterprise System "will define Sun as the only company that is truly committed to open source as a means of driving innovation and adoption. I think it will put an awful lot of pressure on proprietary companies like IBM with WebSphere, Tivoli, and Lotus, not a single one of which is open source," Schwartz says.
The growing use of Solaris as an open-source operating system is the biggest cultural shift for Sun since the company three years ago moved to become a "cross-platform" provider of systems based on both its traditional SPRAC processors, and x86 processors, he says. The open-source Solaris is now allowing the company to extend its footprint again, this time into non-Sun hardware. Of the million Solaris open-source licenses, Sun believes two-thirds were downloaded for use on non-Sun equipment.
The cumulative effect "has been a pretty significant departure for a company that had the reputation of being proprietary and expensive," he says.
With both Solaris and Java Enterprise System available, Sun will be established as "the single largest contributor to the open-source movement on the planet," he says. Schwartz says Sun is now aggressively targeting the Solaris licenses for opportunities to "up-sale, cross-sale, and side-sale not only the middleware we have to offer but the update services, servers, and storage we deliver. Solaris to me is the world's best hunting dog for going out and finding new opportunities for Sun."
Currently, about a third of all Solaris shipments are being used on Sun SPARC-based systems, and two-thirds are deployed on x86-based systems, he says. Of the x86 deployments, about 95% were on non-Sun hardware.
The open-source efforts are aiding Sun's overall growth, Schwartz says, which he believes will help the financial condition of the company. Although the company reported a $19 million profit for its fiscal second quarter, which ended Dec. 26, 2004, it has reported a net loss of $128 million so far for fiscal year 2005, which followed a net loss of $376 million in fiscal year 2004. The company's stock is hovering around $4 a share.
But Schwartz says the company's position, with $7.5 billion in cash and a market cap of more than $14 billion, is the most important metric. "We would like to continue to target more growth in the share price, [but] we've been focused as much on operating efficiency over the past 12 months as we have been on growth," he says. "We've made significant strides forward by growing the number of customers we have, which is what the Solaris licensing activity is targeted towards."