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New hopes from Sun's idea factory
October 17, 2005 -
FAQ: The Sun-Google partnership
October 4, 2005 -
Sun and Google shake hands
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Galaxy remakes Sun's server strategy
September 12, 2005 -
IBM backs Sun's Solaris, renews Java pact
June 27, 2005 -
Solaris engineers offer personal source-code tours
June 14, 2005
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Sun's server revenue but potentially lucrative if Sun can keep adding new subscribers.
But moving the needle even more could be difficult. Analysts at Gartner in April said IBM led the $6.7 billion market in 2004, with a 37 percent share. BEA Systems, also run by a former Sun exec, was second with 7.2 percent. Sun wasn't even in the top five. And in a September survey by Merrill Lynch of 100 chief information officers about their preferences for server software, not one said he or she was interested in buying more Sun server software.
Solaris in the openSolaris--now an open-source project called OpenSolaris--is the other side of the software coin. It's not a direct revenue driver, but it's at the heart of a plan to entice programmers to build around it. As Linux stole Solaris customers because it and the x86 hardware it runs on was cheap, Sun hopes OpenSolaris will do the same.
That Sun would offer an open-source version of its flagship operating system shows just how seriously the company takes this technology trend. "I was stunned" when Sun announced OpenSolaris, said David Ray, a manager of information systems at a large hotel in St. Louis. "The open-sourcing of Solaris 10 potentially may turn out to have been the most important single initiative" Sun has going, added Mark Stahlman, an analyst at Caris & Co.
So far, 2.8 million copies of Solaris 10 have been downloaded--10 times Sun's expectations, Schwartz said. Most of those copies are running on x86 servers, which could help Sun's efforts to get into that market.
But to some, the new version of Solaris hasn't moved Sun away from a niche provider for its own UltraSparc servers.
"The decision-tree people go through is, 'Do I stay on Windows or not?' If not, chances are 99 percent I'm going to go to Linux," said Allen Smith, chief information officer of accounting firm Virchow Krause & Co. "The discussion I hear these days is Windows versus Linux. It's not Windows versus Linux versus Solaris."
Still, Sun's strength may be its record. Some tech buyers take comfort in buying from a 25-year-old company, rather than younger Linux companies such as Red Hat.
"We like Sun's viability over Red Hat's viability," said Neal Tisdale, vice president of software development for New Energy Associates, which uses Sun's OS on Opteron systems for energy planning simulations. "If you look back over the (years), Sun's made it through a lot of troughs."
Buy, buy, buy
For four years, McNealy liked to brag that his company had a massive $7.5 billion war chest. Now he's finally putting that money to use.
On Aug. 31, Sun acquired storage tape manufacturer Storage Technology, for about $3 billion once cash assets are factored out. On Aug. 25, it acquired middleware software maker and SeeBeyond for $387 million. Annual revenue for the companies is $2.2 billion and $167 million, respectively, said Technology Business Research analyst Harold Kim.
StorageTek, which generated $367 million in cash in the last year, is clearly the most financially important of the two because of its existing cash and its ability to help Sun's long-foundering storage business.
Merrill Lynch analyst Richard Farmer raised his fiscal 2006 revenue estimates for Sun from $11.4 billion to $13.6 billion and earnings per share from break-even to 8 cents as a result of the acquisitions. However, that figure likely will be reduced by 10 cents per share as Sun begins accounting for stock options as an expense, a change that begins this quarter.
"The biggest revenue generator we see is probably with this StorageTek acquisition, mainly because of the added sales channels and the broader product portfolio," Kim said.
Sun hopes to use StorageTek's 1,000-strong sales force to sell its own wares, which have fared worse than products from storage specialists such as EMC and server rivals IBM, Dell and HP. Sun's storage attach rate--the company's storage revenue as a fraction of core server revenue--has declined to 22.3 percent in the June quarter, down 4.5 percentage points in two years.
Sun hopes the acquisition will help it gain access to IBM mainframe customers who also use StorageTek tape. But there are plenty of skeptics.
"Given that storage has been a challenging business for the company and does not appear to be gaining traction, we continue to question the rationale behind the Sun/StorageTek merger," Sanford C. Bernstein analyst Toni Sacconaghi wrote in a September report.
Still, some analysts say the aggressive acquisition strategy and the in-house software work give Sun a more credible portfolio than it has had in years. "I think you can look at them and see them right in the process of getting their act together," Illuminata analyst Jonathan Eunice said.
See more CNET content tagged:
Sun Microsystems Inc., Scott McNealy, Eric Schmidt, Sun Solaris, open source
Sun management is talking about services... without doing much about desktop that is requesting those services.
Sun mangment is behind the curve on going direct, and cuting the cost of sale down.
But.. I think SunW broke out of it's trading range and if Java Dekstop (JNLP aka WebStart) gets patched as expected, Sun could own the internet ecosystem.
.V
Sun management is talking about services... without doing much about desktop that is requesting those services.
Sun mangment is behind the curve on going direct, and cuting the cost of sale down.
But.. I think SunW broke out of it's trading range and if Java Dekstop (JNLP aka WebStart) gets patched as expected, Sun could own the internet ecosystem.
.V
>Valley's Computer History Museum earlier this
>month, Sun Microsystems Chief Executive Scott
>McNealy took the stage with Google CEO Eric
>Schmidt.
>
>"It's a natural for me to be sitting here with
>an ex-Sun employee," McNealy quipped. "We have
>littered the industry with ex-Sun employees."
What an _appropriate_ venue.
Sun reminds me of Racad Vadic (remember them?).
When the price of modems went into free-fall,
Racal just couldn't bring themselves to change
their sales model, or reduce their overhead.
For a while, they retained market share by
adding features and by massaging their legacy
customers, but the $200 modem killed them.
Sun has a very hard time changing anything.
It took them 20 years to give up on the idea
of a proprietary microprocessor, and it is
very clear that they will go back to using
the SPARC if they can ever figure out how to
make it go 4 GHz.
Google uses x86 boxes and free software.
I'll believe that Sun has a chance if I see
Google converting their search farms to run
on SPARC hardware, or even Solaris on x86.
Until then, watch the pretty colors:
Sun is setting.
Guest what?
Who every reads this ...we won?t get old enough
to experience ethers MS or Sun's nova
The dynamics are just so huge ?it could even invalidate my statement.
I will admit it , in a sense it?s a roll of the dice !
Whoever knows what is the next big thing to hatch on ..go for it
Just a thought
Regarding his modem comment: isn't it true that Sun just came out with Servers with better performance and lower prices than Dell's and isn't Dell acknowledged as the industry cost leader? Doesn't that seem to weaken his cost argument a bit?
Regarding his "proprietary" SPARC comments: let's see, are Intel chips proprietary? Uh, yup. AMD's Opterons and IBM's Power chips? Yup. So name me a microprocessor design that isn't proprietary? Oh wait, that's right, Sun released the SPARC design to open source some ten years ago. But then, does it really matter whether microprocessors are proprietary? Again, he doesn't really know what he's talking about.
The reality is that Sun has had some great technology over the years but does a poor job packaging it into saleable units and then actually marketing and selling it.
On the other hand, it has a new president now, and despite the Ben-Stein-in-Ferris-Bueller tone to this article, it has a group of products that are vertically comprehensive and technologically pretty darn cool and exciting. On top of that, it's clear that it's approaching it's product line differently now. All you have to do is look at the fact that it'll sell you a computer with Unix, Linux, or Windows on it for confimation.
Can Sun execute? Who the heck knows. Does it have good product? Oh heck yeah. Is Dave Chapman some shill for either a Sun competitor or the immature-like-a-group-of-three-year-olds open source/Slashdot community? Probably. Am I a shill for Sun? No. I'm just another guy like the rest - I don't necessarily like the way Sun's run its business, but I know good ideas and good technology when I see it.
Here?s the site: www.Codonology.com (理子工程学)
Thanks.
Hua Fang
(方华 in Chinese)
>Valley's Computer History Museum earlier this
>month, Sun Microsystems Chief Executive Scott
>McNealy took the stage with Google CEO Eric
>Schmidt.
>
>"It's a natural for me to be sitting here with
>an ex-Sun employee," McNealy quipped. "We have
>littered the industry with ex-Sun employees."
What an _appropriate_ venue.
Sun reminds me of Racad Vadic (remember them?).
When the price of modems went into free-fall,
Racal just couldn't bring themselves to change
their sales model, or reduce their overhead.
For a while, they retained market share by
adding features and by massaging their legacy
customers, but the $200 modem killed them.
Sun has a very hard time changing anything.
It took them 20 years to give up on the idea
of a proprietary microprocessor, and it is
very clear that they will go back to using
the SPARC if they can ever figure out how to
make it go 4 GHz.
Google uses x86 boxes and free software.
I'll believe that Sun has a chance if I see
Google converting their search farms to run
on SPARC hardware, or even Solaris on x86.
Until then, watch the pretty colors:
Sun is setting.
Guest what?
Who every reads this ...we won?t get old enough
to experience ethers MS or Sun's nova
The dynamics are just so huge ?it could even invalidate my statement.
I will admit it , in a sense it?s a roll of the dice !
Whoever knows what is the next big thing to hatch on ..go for it
Just a thought
Regarding his modem comment: isn't it true that Sun just came out with Servers with better performance and lower prices than Dell's and isn't Dell acknowledged as the industry cost leader? Doesn't that seem to weaken his cost argument a bit?
Regarding his "proprietary" SPARC comments: let's see, are Intel chips proprietary? Uh, yup. AMD's Opterons and IBM's Power chips? Yup. So name me a microprocessor design that isn't proprietary? Oh wait, that's right, Sun released the SPARC design to open source some ten years ago. But then, does it really matter whether microprocessors are proprietary? Again, he doesn't really know what he's talking about.
The reality is that Sun has had some great technology over the years but does a poor job packaging it into saleable units and then actually marketing and selling it.
On the other hand, it has a new president now, and despite the Ben-Stein-in-Ferris-Bueller tone to this article, it has a group of products that are vertically comprehensive and technologically pretty darn cool and exciting. On top of that, it's clear that it's approaching it's product line differently now. All you have to do is look at the fact that it'll sell you a computer with Unix, Linux, or Windows on it for confimation.
Can Sun execute? Who the heck knows. Does it have good product? Oh heck yeah. Is Dave Chapman some shill for either a Sun competitor or the immature-like-a-group-of-three-year-olds open source/Slashdot community? Probably. Am I a shill for Sun? No. I'm just another guy like the rest - I don't necessarily like the way Sun's run its business, but I know good ideas and good technology when I see it.
Here?s the site: www.Codonology.com (理子工程学)
Thanks.
Hua Fang
(方华 in Chinese)
Google is known for buying cost-effective commodity machines and linking them into vast clusters. Google's purchase of Sun hardware is the best endorsement imaginable for the cost effectiveness and managability of Sun's servers.
Because Sun is exclusively sourcing x86 processors from AMD, it's getting a special deal: Sun will be the first vendor to get speed bumps in the Opteron. Sun will use its special relationship with AMD to make superior servers that steal market share from its rivals.
There's some risk in this strategy: Intel may close the performance gap with AMD in the next few years, plus it means selling machines for lower margins than Sun is used to -- but it's a strategy that keeps Sun in the game, and it just might get some people into Sun's storage options and Solaris 10. (BTW, Sun is happy if you want to run Linux or Windows on a Galaxy server...)
As for SPARC, Sun's plan is not to get SPARC to 4 GHz, but rather to build highly parallel chips that will smoke anything in the x86 space for server workloads -- this may or may not work in real life, but system-on-chip is where everybody is going for silicon performance in the next fifteen years.
Google is known for buying cost-effective commodity machines and linking them into vast clusters. Google's purchase of Sun hardware is the best endorsement imaginable for the cost effectiveness and managability of Sun's servers.
Because Sun is exclusively sourcing x86 processors from AMD, it's getting a special deal: Sun will be the first vendor to get speed bumps in the Opteron. Sun will use its special relationship with AMD to make superior servers that steal market share from its rivals.
There's some risk in this strategy: Intel may close the performance gap with AMD in the next few years, plus it means selling machines for lower margins than Sun is used to -- but it's a strategy that keeps Sun in the game, and it just might get some people into Sun's storage options and Solaris 10. (BTW, Sun is happy if you want to run Linux or Windows on a Galaxy server...)
As for SPARC, Sun's plan is not to get SPARC to 4 GHz, but rather to build highly parallel chips that will smoke anything in the x86 space for server workloads -- this may or may not work in real life, but system-on-chip is where everybody is going for silicon performance in the next fifteen years.
Fundamental changes are in the works. These changes are not just in technology, but also in business practice and business models. Failures to adapt will once again bear witness the carcasses of many major corporations and their CEO/CIO's plugging the sewers. Cast-iron and stubbornness does not any longer guarantee survival forever (hello, AT&T). But an identity and a corporate culture are unique identifiers from company to company. This uniqueness is what distinguishes a corporation from falling into the ?just-like-everybody-else? recycle bin.
Now, I said all that to say this. Some corporations need to diversify in order to stay alive. Others just need to shift their core businesses and include those that fit their competencies. Still others need to just ride out the tides of change (as long as those tides are not a tsunami). SUN can do that. But, they must be ?open? and ?closed?. Sun should continue to develop a proprietary hardware technology for the embedded market. Thus, chip development (microprocessor, FPGA, etc.) and architecture (SBCs, cPCI, etc) are important competencies to promote. Adopting PICMG standards, Fiber channel and Advanced TCA will give SUN in-roads into markets they haven?t aggressively pursued. SUN must economically distinguish itself from others in the primary embedded development groups, by using the power of its marketing name. And as long as AMD keeps the pressure on Intel for dual-core, 64bit supremacy, the SUN relationship with AMD will make it viable in the x86 space for a long time too.
SUN is on the right path. OpenSolaris is a great step forward. Securing deals (like StorageTek) that strengthen their position in the storage space to compete with the likes of IBM, EMC, etc will ensure some interim term survival. Also, exploiting the opportunity to market and implement an integrated cross-platform management solution is a workable sell for the long term. Also, "Windows" enabled SUN workstations, SUNs office suite of products and SUNs compatibility with Active Directory provides access to once thought to be closed environments. From SUNs perspective DELL is no longer the only viable option.
Now, as far as the "nobody else is using it". Well, this is the most challenging part. But it can be resolved with a little dedicated effort. SUN must apply itself to affordable education, training, college curriculum, third party certifications. The key word is affordable. Interested solution providers and students should not have to turn to only SUN for 100% of this training. Spreading this effort will ensure a new and steady stream of talent and an available pool of bodies for development and organizations to pull from. Only then will reluctant third parties be ready and willing to take on the possibilities and challenges that SUN's technology presents to small and medium sized businesses. It is the SMBs where the bulk of SUNs long term successes lay. For example, SMBs readily adapted to open source LINUX because it is scalable and "affordable". And LINUX went off the charts. There's no reason the same can't happen for Solaris-10. But it must be implemented and marketed with an eye on education/training, the embedded space and the future. The Solaris University Challenge is a great start.
Finally, I'm not a SUN or Solaris suck-up. I'm not star struck and I have no loyalty to any software development group. I do not think it is such a great idea, as someone at SUN obviously does, that marketing your top of the line future servers and hardware as being compatible with FORTRAN and PASCAL. What dinosaur thought of that? Sure, it's compatible. But there are other languages and COTS apps to market that will give OpenSolaris greater and wider appeal. Particularly in the data center and the often ignored telecom space.
Anyway, I too, at first glance, looked at the once-upon-a-time master of their domain hooking on to the coat-tails of the young upstart, as a move laced with desperation. But on second thought, for Scott McNealy and SUNs long term survivability, hooking up with old protégées, like GOOGLE CEO Eric Schmidt, is "good business practice". Especially since up to this point, trying to go it alone against the likes of DELL, HP and IBM has not been working.
- SUN can't go it alone.
- by October 19, 2005 6:35 PM PDT
- Anyone calling for the demise of SUN has not been paying close attention to the industry and current industry trends. Of course SUN still has good products. But server marketing and Java/Java licensing alone will not keep SUN on the edge and in play for the next 10 years. It's what happens in the interim that will be the determining factors. Not just for SUN, but for the whole tech industry.
- Like this Reply to this comment
-
(18 Comments)Fundamental changes are in the works. These changes are not just in technology, but also in business practice and business models. Failures to adapt will once again bear witness the carcasses of many major corporations and their CEO/CIO's plugging the sewers. Cast-iron and stubbornness does not any longer guarantee survival forever (hello, AT&T). But an identity and a corporate culture are unique identifiers from company to company. This uniqueness is what distinguishes a corporation from falling into the ?just-like-everybody-else? recycle bin.
Now, I said all that to say this. Some corporations need to diversify in order to stay alive. Others just need to shift their core businesses and include those that fit their competencies. Still others need to just ride out the tides of change (as long as those tides are not a tsunami). SUN can do that. But, they must be ?open? and ?closed?. Sun should continue to develop a proprietary hardware technology for the embedded market. Thus, chip development (microprocessor, FPGA, etc.) and architecture (SBCs, cPCI, etc) are important competencies to promote. Adopting PICMG standards, Fiber channel and Advanced TCA will give SUN in-roads into markets they haven?t aggressively pursued. SUN must economically distinguish itself from others in the primary embedded development groups, by using the power of its marketing name. And as long as AMD keeps the pressure on Intel for dual-core, 64bit supremacy, the SUN relationship with AMD will make it viable in the x86 space for a long time too.
SUN is on the right path. OpenSolaris is a great step forward. Securing deals (like StorageTek) that strengthen their position in the storage space to compete with the likes of IBM, EMC, etc will ensure some interim term survival. Also, exploiting the opportunity to market and implement an integrated cross-platform management solution is a workable sell for the long term. Also, "Windows" enabled SUN workstations, SUNs office suite of products and SUNs compatibility with Active Directory provides access to once thought to be closed environments. From SUNs perspective DELL is no longer the only viable option.
Now, as far as the "nobody else is using it". Well, this is the most challenging part. But it can be resolved with a little dedicated effort. SUN must apply itself to affordable education, training, college curriculum, third party certifications. The key word is affordable. Interested solution providers and students should not have to turn to only SUN for 100% of this training. Spreading this effort will ensure a new and steady stream of talent and an available pool of bodies for development and organizations to pull from. Only then will reluctant third parties be ready and willing to take on the possibilities and challenges that SUN's technology presents to small and medium sized businesses. It is the SMBs where the bulk of SUNs long term successes lay. For example, SMBs readily adapted to open source LINUX because it is scalable and "affordable". And LINUX went off the charts. There's no reason the same can't happen for Solaris-10. But it must be implemented and marketed with an eye on education/training, the embedded space and the future. The Solaris University Challenge is a great start.
Finally, I'm not a SUN or Solaris suck-up. I'm not star struck and I have no loyalty to any software development group. I do not think it is such a great idea, as someone at SUN obviously does, that marketing your top of the line future servers and hardware as being compatible with FORTRAN and PASCAL. What dinosaur thought of that? Sure, it's compatible. But there are other languages and COTS apps to market that will give OpenSolaris greater and wider appeal. Particularly in the data center and the often ignored telecom space.
Anyway, I too, at first glance, looked at the once-upon-a-time master of their domain hooking on to the coat-tails of the young upstart, as a move laced with desperation. But on second thought, for Scott McNealy and SUNs long term survivability, hooking up with old protégées, like GOOGLE CEO Eric Schmidt, is "good business practice". Especially since up to this point, trying to go it alone against the likes of DELL, HP and IBM has not been working.