September 12, 2003 3:44 PM PDT

Sun to go holistic at conference

Sun Microsystems is preaching the message that customers prefer prebuilt packages of hardware and software over piecemeal components--and the company cites next week's SunNetwork conference as evidence that its own staff is getting religion.

In the past, Sun released various components when they were ready--new computers, updated operating systems, bigger storage systems, expanded software packages and so on. Beginning this year, CEO Scott McNealy ordered the switch to a synchronized release of pre-built packages once every quarter, with all the components designed to work together harmoniously.

With this holistic strategy, Sun pays for integration that customers would otherwise have to do themselves or pay a third party to do. It's Sun's attempt to fight its way back to the prominence it has lost in recent years, after the manic spending of the 1990s, the maturity of servers based on Intel processors, the emergence of the inexpensive Linux operating system and the reawakened might of IBM.

Some are convinced Sun's philosophy is on target.

"Systems with a capital 'S' are back," RedMonk analyst James Governor said. "It's going to get a little lonely for software- or hardware-only vendors."

Product batches in the first two quarterly releases were unified largely superficially, Sun admits, but next week at its SunNetwork conference in San Francisco, Sun said it will begin showing some evidence that its product groups are working together and not simply releasing products at the same time. The conference will be held Sept. 16 through Sept. 18.

One show highlight should be Orion, the collection of server software for handling e-mail, hosting Web sites, running Java programs and performing many other tasks. Sun believes that integrating all these components and then selling the lot priced simply on how many employees a company has--somewhere between $100 to $200 per head each year, according to software chief Jonathan Schwartz--will help the company take on competitors such as IBM and Microsoft that have a much stronger presence in the market.

"A year ago, each of those products were on a different cadence, a different launch cycle," said Larry Singer, Sun's chief competitive officer.

Also expected at the show are Mad Hatter, the version of Linux and higher-level software for desktop computers; new developer tools for Orion; advancements with N1, which is software designed to let programs run efficiently on collections of different hardware; and a new integrated hardware-software suite to get customers started in grid computing. McNealy and Schwartz are among the executives speaking at the three-day conference in San Francisco.

Sun's integration work will extend to hardware as well, through projects such as N1. Ultimately, the company's goal is to release a quarterly update to the gigantic assemblage of backend data processing and storage technology that McNealy calls the "big friggin' Webtone switch," better known as the network computer.

Like many parts of McNealy's world, the holistic approach and quarterly release have deep ties to the automotive industry. His father was vice chairman of American Motors and the names of all McNealy's sons can also be found on American vehicles. And he frequently uses automotive metaphors.

When it comes to computing, McNealy argues that customers want pre-built equipment, just as they want fully operational cars and not a collection of piston rings and other components. The quarterly release is analogous to the auto industry's annual debut of new models.

Unifying Sun's groups has been a work in progress for years. McNealy directed his former chief operating officer, Ed Zander, to dismantle the Sun "planets" organization of independent fiefdoms, and Zander left last year, when the job was complete. Now, one of the top items on the agenda is giving Sun, long seen as a hardware company, a credible collection of software products.

It's no surprise that software executives such as Schwartz are happy with the increased prominence software has in Sun's long-term vision, but even Sun's hardware honchos have signed on.

"We're no longer a box shop," said Neil Knox, executive vice president of Sun's volume systems group, which sells Intel- and UltraSparc-based servers.

"The ultimate product really is a system, not a chip," declared David Yen, executive vice president of chips.

But Sun has work to do. McNealy acknowledges the skepticism about Sun, and the company still suffers from disappointing earnings and market share losses.

Competitors are active--notably IBM, whose server software is more widely used. Big Blue is headed in the same direction as Sun, said Governor, the RedMonk analyst. "Wait until you see the integrated bundles IBM is going to bring to market," Governor said. "IBM Software Group is finally playing the kind of glue role needed by IBM."

Another issue for Sun is that transforming a company with tens of thousands of employees can be difficult.

Singer believes it can be done. "In 1993, we were a workstation company. Then we became a server company. Now we're moving to an infrastructure architecture company. That means we have to start acing like it," Singer said. "This quarterly cadence is a pretty big part of that cultural change within Sun."

Singer's last job on the receiving end of Sun's sales force gives him an appreciation for the company's holistic approach.

"I was the chief information officer of the state of Georgia. It became a big exercise for us, whenever Sun had a new product release," Singer said. "We had to figure out whether to accept it or not, and a big part of that was whether it was going to work with other Sun products and other partner products."

 

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