September 20, 2004 9:00 PM PDT

Sun begins pay-as-you-go supercomputing

Sun Microsystems plans to announce a plan Tuesday to let customers rent supercomputing power from its data centers, paying for exactly as much muscle as they need.

The program, called the Secure N1 Grid, will cost $1 per processor per hour to use, President Jonathan Schwartz is expected to announce at a New York event designed to curry favor among Wall Street customers. Sun also plans to announce new midrange storage systems, two midrange Unix servers based on the company's UltraSparc IV processor and new networking gear designed to improve secure Web site performance.

The event is the third quarterly announcement this year from the Santa Clara, Calif.-based server and software company. Those awaiting the upcoming version 10 release of the Solaris operating system--and the specific open-source licensing terms under which Sun will share it--will have to wait for the fourth quarterly announcement toward the end of the year.

Although IBM and Hewlett-Packard offer competing rent-a-supercomputer programs, Sun's trying to make itself stand out with a pricing strategy it argues is different and competitive. New pricing plans are Schwartz's hallmark: Since he became Sun's new No. 2 in April, he's been working to revamp Sun's marketing as well as its technology.

"Sun does well when they get to rewrite the rules of the game," said Clay Ryder, an analyst at the Sageza Group. But when it comes to novel pricing plans, it takes years to change customers' buying behavior.

Schwartz is moving to make Sun's products available in three ways: the standard one-time sales method that is prominent today; subscriptions that bundle products and services; and utility plans for which payments increase or decrease according to the consumption of computing resources.

Also Tuesday, Sun will sell access to its new StorEdge 6920 storage system with utility pricing. As with its top-end 9900 series line in a program launched in June, Sun will own, install, maintain and operate the systems according to the consumption of "Sun power units"--a measurement of storage capacity and features such as data protection. The 6920 utility prices will be about half that of the higher-end systems, said Chris Wood, chief technologist of Sun's data management group.

The company's grid program offers servers using its UltraSparc processor or Advanced Micro Devices' Opteron processor, a variant of the x86 chip family popularized by Intel's Pentium and Xeon products, said Terry Erdle, vice president of marketing for Sun's worldwide services and solutions group. Customers can rent a "grid" of interconnected computers that can be used for calculation tasks such as computing financial risks, searching seismic data that can locate oil fields and detailing frames in animated movies.

Sun's not first with the idea of renting out supercomputer power, a service often geared for customers that have surging processing needs. IBM launched its program more than a year and half ago with oil and gas customers, expanding later to biology and genetics research. And HP this year began renting computing brawn to entertainment industry customers.

The current service is for Sun customers that require little in the way of hand-holding, Erdle said. The company plans to launch another service, called Sun Utility Computing for Grid, that will cost more but provide more elaborate services from Sun and partners that have expertise in particular fields. Partners will include CGI Group, Atos Origin and Electronic Data Systems, Erdle said.

Sun is touting its financial-industry ties at Tuesday's event. It will announce, for example, that the Tokyo Stock Exchange has chosen to switch its computing infrastructure to Sun servers between 2005 to 2008.

Financial-services companies, along with telecommunications corporations, are Sun's core customers; Sun rose with their lavish spending in the late 1990s and fell with their troubles this decade. Even though financial services are rebounding some, Sun's future depends on how well it does with its push to new segments such as health care, manufacturing, retail and governments, Ryder said.

"I think if Sun is looking to the past to declare its future, they're doomed," Ryder said. "The jury's still out whether they'll overcome the hill. But at least they're moving in the right direction."

Sun faces competition
It also faces heavy competition from IBM. In an attempt to rain on Sun's parade, Big Blue plans to announce Tuesday that Wall Street consultancy Random Walk Computing has created a version of its electronic brokerage and trading software for IBM's Power processor-based Unix and Linux systems. HP, meanwhile, has used Linux as a tool to attack Sun, for example with a partnership with market data distributor Reuters.

IBM and Dell have been steadily gaining share in the server market at Sun's expense, though Sun in the second quarter made some progress with its goal by increasing its unit shipments.

Sun has been touting its Opteron servers, such as the four-processor V40z it announced in July, but its bread and butter remains UltraSparc products.

Sun will launch the V490 and V890 servers Tuesday, models that use up to four and eight UltraSparc IV processors, respectively. The systems use the same hardware as the UltraSparc III-based V480 and V880 models, but they offer better performance and cost less, said Chris Kruell, marketing director for Sun's scalable systems group.

A V490 with two 1.05GHz processors, 8GB of memory and two 73GB disks costs $30,995. A V890 with eight 1.2GHz processors, 32GB of memory and six 73GB disks costs $123,995, Sun said.

It's not a coincidence that the faster models are less expensive, he said. "We're transitioning over to the UltraSparc IV systems. Pricing is set up to incent that," Kruell said. However, he declined to say when Sun would complete the transition with low-end products such as thin-rack-mountable dual-processor systems.

Sun also plans to begin showing off networking gear based on its acquisition of Nauticus. The products accelerate encrypted communications with Web servers, a vital task for processes such as making secure credit card purchases over the Internet.

And Sun plans to take yet another crack at the storage market with the StorEdge 6920. The product is based on the acquisition of Pirus Networks that Sun announced almost exactly two years earlier.

The product didn't arrive when Sun originally had hoped. "We thought it was going to take six months less than it did," Wood said, but Sun had to make sure it was reliable. "It absolutely cannot have a data problem going through it. You don't ship this until it is rock-solid bulletproof."

Sun is happy with the technology, though. It has technology called virtualization that will let it subsume and control other storage systems from Sun and competitors such as HP and EMC, Wood said. The 6920 has a capacity of as much as 45 terabytes, though most customers will probably buy 10 to 30 terabytes.

Sun's overall plan has merit, according to Forrester Research CEO George Colony.

"Given the strategy and management, I believe that there is a good chance that Sun will be around for a strong third act," he said. "I've hung around with many tech zombies in the past, from Wang Laboratories to Prime Computer to Digital Equipment. When I stare into the eyes of the Sun management team, I still see life."

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Pricey hardware this is
>A V490 with two 1.05GHz processors, 8GB of memory and two 73GB disks costs $30,995. A V890 with eight 1.2GHz processors, 32GB of memory and six 73GB disks costs $123,995, Sun said.


Right, that's really crappy pricing you know. Why would anyone buy this if you can get an 8-CPU AMD64 (or Intel or whatever) with 32GB RAM and more than 200GB of disk space for less than $10,000.
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