Coop's Corner

Hewlett Packard and Sun did their best to put everyone on Wednesday's conference call to sleep. (Do these guys try to sound like Lurch from the Addams Family when they run through their prepared remarks? Just asking.) Still, the news will be of especial interest if you are either a Solaris or ProLiant customer.

The deal gives HP the right to distribute software for Sun's Solaris 10 Operating System on the HP ProLiant server and blade system platforms. HP also will shoulder responsibility for technical support. It's a one-stop shop arrangement that the companies hope will help answer lingering questions from customers about where they can turn when glitches arise. That's likely going to go down well with IT managers who understandably want to know whose throat to choke when there are technical issues to resolve.

Under the terms of the new original equipment manufacturers and support agreement, Sun becomes a strategic HP ProLiant OS distribution partner and Solaris is now elevated to the lineup of key operating environments for the HP ProLiant(2) platform. The new deal sets a course for the companies to work together to expand demand for both Solaris and OpenSolaris on both HP ProLiant servers and server blades into new markets.

By providing a single point of purchase, contact and accountability for Solaris on HP ProLiant, HP and Sun are improving the overall customer experience. To further reduce operational costs, the companies will collaborate on integration of Solaris 10 and HP Insight software on HP ProLiant servers to deliver usability and management enhancements.

HP and Sun also suggested at closer sales collaboration. The idea is that this will help them reach markets where one or the other companies might not enjoy strong representation.

Steve Jobs may be the best in the business at mesmerizing a crowd, but Jonathan Schwartz of Sun Microsystems rates consideration as a very serious No. 2.

When it comes to pitching his company, Schwartz is the sort of articulate and passionate CEO that boards covet in these extra-PR-conscious times. Is he all that good? Put to the test, I think he'd have decent odds of convincing a zebra that stripes were yesterday's fashion.

But while Schwartz is steadfast about Sun's ability to achieve great things, the big difference is that Jobs sells cool stuff that its customers consider to be so much better than that offered by the competition. At Sun, well, it remains a slog.

The company just last week announced it had lost $209 million in its fiscal second quarter on an 11 percent drop in sales. (If you subtract the special charges, Sun actually would have finished with a 15-cent-per-share profit.)

The earnings report came as a mild upside surprise on Wall Street, which had feared worse after the financial sector's meltdown during the fourth quarter of last year. Still, sales remain headed in the wrong direction as the company has now suffered year-to-year declines in each of its last four quarters. It doesn't help that Sun is getting squeezed from opposite directions with IBM and Hewlett-Packard at the high end of the server business and Dell (and HP again) on the low end.

So I was especially curious how Schwartz would deal with current events when he presented a status update on Sun's business Monday morning. What can I say, but the guy still has the touch.

This was a textbook Jonathan "special" where you come away dutifully impressed at his ability to peer through the clouds. As his Schwartz's wont, he liberally dropped mentions of (unnamed) bigwigs at this or that (unnamed) major "financial institution" assuring him that they understood the importance of investing in (presumably, Sun) technology in order to stay ahead.

And there was no shortage of telling anecdotes. At one point, Schwartz related how a "leading" technology decision maker with one of the world's largest financial institutions shared this morsel: Yes, it's reexamining what it spends. Who isn't? The more important intimation: this institution intends to accelerate spending in other areas where it thinks there will be opportunity.

All that was prelude to Schwartz's main argument that technology spending will figure as "a critical part" of the economy's recovery (whenever that might take place.)

What followed was a brilliant disquisition on the role of innovation during times of crisis and how "cloud (computing) was fast becoming the "one conversation people want to have across the world." (I thought it was Christian Bale but let's not quibble.) Schwartz's line of argument naturally fed into a scenario marked by sharp demand for more servers and storage, the two product areas which coincidentally pay the bills at Sun.

Truth be told, it was a compelling performance. I just wonder how long it's going to take before the story line ever jibes with facts on the ground. Panglossian optimism has its place, but Sun's CEO insists on painting a sunny picture that never quite takes shape as envisioned. Indeed, he's been painting the cloud computing picture for years now. Then come more losses, layoffs and let downs. Seems that it's been this way since the dot-com bubble burst.

I'm not arguing Sun's in any danger of going under. In fact, it can probably fare quite nicely as a (much) smaller, open-source software company. But that doesn't fit with Schwartz's vision for Sun. And while I am keeping my fingers crossed, the repair of the economy will take quite some time. So at what point do we declare his vision a pipe dream and just move on?

Sun Microsystems plans to introduce Flash-based servers and storage systems in early 2009, according to company sources.

This would build upon Sun's earlier embrace of flash in its ZFS storage platform. Sun officials have argued that Flash pushes down the total operational cost of storage, particularly when it comes to data or performance intensive applications. Earlier in the year, there had been speculation about a faster move to Flash before the end of 2008.

Sources say they expect performance gains of between 10 percent and 20 percent in the upcoming systems. An announcement is expected in the first quarter of next year.

"Certainly, there are lots of Web 2.0 customers out there who are trying to get performance gains so anything that pushes out their scale is going to be valuable," said one executive familiar with the plans.

Sun Chief Technology Officer Greg Papadopoulos told a gathering of analysts and reporters in brief welcoming remarks Tuesday evening that "Flash memory will be the catalyst...that leads to a rethinking of storage." He did not get more specific.

Earlier in the day, Sun disclosed that it had stopped accepting new customers for its Network.com pay-per-use utility service. Dave Douglas, senior vice president of cloud computing and developer platforms group, acknowledged that it had been slow going for the 2-year-old project.

"I think the model makes sense...it definitely (appealed to) a set of customers but not as big a set as we would have hoped," Douglas said.

Lew Tucker, who was hired in August to take over as vice president and CTO of Sun's Cloud Computing initiative, left the door open to a "retooled" Network.com sometime in the future.

I've never bought into the "Sun Microsystems is toast" thesis that you often hear tossed around at industry get-togethers. Even in a deepening recession, this is a company with ample resources and a wealth of talented developers. But with some of the hottest development action now taking place on mobile phone platforms, how relevant is Java going to be to the future tech conversation?

Earlier today, my colleague Stephen Shankland wrote about the debut of JavaFX, a Sun programming language that's supposed to be easier to use than Java. In his story, he quoted Sun CEO Jonathan Schwartz talking up the potential of a coherent "runtime" foundation that won't wind up splintered into different (and incompatible) versions. To wit: "We're making our binaries available" to mobile phone makers "so we can unify the Java platform implementation."

In the video posted above, Schwartz described the launch as a "breathtaking new release" of the Java platform, which is said to be the company's most profitable software product. That's the usual hard sell I've come to expect from Schwartz, who is as smart a technology salesman as you'll find in the computer industry. And it's not just empty sloganeering.

To be fair, Java has made inroads into the server and mobile phone markets. But I remember some of the more lofty claims made by Sun execs after Java debuted in 1995. And, truth be told, it was the hot product for a while--so much so that its mere mention irritated Bill Gates to the point where he blew up at a bunch of us when we pressed him about Java's potential impact on Microsoft.

But the product's $34 million in billings is still piddling when compared to Sun's hardware sales. And despite Schwartz's enthusiasm, you have to wonder whether Java's uptake among mobile carriers would have been greater had their developers also not had to choose from a multiplicity of competing platforms.

Now the competition for mobile platforms puts Java up against the likes of Symbian and others. I won't try to predict how this is going to turn out. But we heard one potentially troubling harbinger for Sun on Thursday: at a Symbian partner conference in San Francisco, AT&T's Roger Smith, who directs next-generation services at the company, did not bother mincing words. "Java has not been a success," he said.

If Schwartz is as clever as I think he is, the guy placed a call to Smith as soon as that news report reached his desk. On a Java-based phone, no doubt.

In June 2005, long before most people ever heard of subprime, LIBOR, or credit default swaps, Sun Microsystems thought it was a grand idea to buy StorageTek for the princely sum of $4.1 billion. At the time, the thinking at Sun was to become more of a one-stop shop for its corporate clientele. On paper, at least, it sounded like a plausible idea.

But that was a veritable eternity ago. With the market's sudden meltdown in the last month, corporate spending--at least on Sun's products and service--has been hit especially hard. So it was that Sun warned this afternoon of a wider loss on lower revenue. The company said that it's going to lose 25 cents to 35 cents a share.

That figure includes a $60 million restructuring charge but not the potential goodwill impairment. Sales are expected to come in between $2.95 billion to $3.05 billion, as compared to $3.21 billion for the first quarter of fiscal 2008.

What really stands out in the warning is the paragraph devoted to a discussion of what largely was the StorageTek business. To wit:

Based on a combination of factors, including the current economic environment, Sun's operating results, and a sustained decline in Sun's market valuation, the company has concluded that it is likely that the fair value of one or more of its reporting units has been reduced below its carrying value. As a result, Sun is currently conducting an interim goodwill impairment analysis to determine the required amount of the non-cash impairment charge, if any. As of September 28, 2008, prior to the impact of this potential non-cash impairment charge, Sun's total goodwill balance was $3.2 billion of which $1.8 billion relates to reporting units that may be impaired.

Sun also paid about $1 billion to buy MySQL in January. A spokeswoman said Sun will publish final numbers on October 30, when the company holds its quarterly earnings call.

At the time of the StorageTek acquisition, a Forrester analyst by the name of Frank Gillett had this to say:

"Buying a company that is primarily tape technology today doesn't look like an exciting play for a forward-thinking company like Sun....It appears like they have some strategic stuff in mind in the long run, but I don't think that this acquisition is being justified on yet-to-be-announced technology. In the short run (the logic) is an open question."

Pretty prescient.

Marten Mickos joined MySQL as CEO in 2001. In January, he presided over the sale of the company to Sun Microsystems. Since the acquisition, he has served as the senior vice president of its database group. I caught up with Mickos after his keynote speech at the MySQL User Conference & Expo taking place this week in Santa Clara, Calif.

Q: What's next for Sun as far as its open-source quest?
Mickos: I think Sun has embarked on many things with (the) open-sourcing of Java and Solaris. Now is the time to fine-tune those models and settle down. When you embark on something new, you have to experiment and find the right path. You're seeing it take effect now. The Open Solaris and GlassFish download numbers are growing, and that's a positive.

One theme that we heard today was the similarity in work cultures between Sun and the folks who came over with the MySQL deal. As the teams further integrate, is there any change in how the community adds feedback to the product roadmap now that you're a part of Sun?
Mickos: Not really. The agreement when we started talking about acquisition was that they were buying us for who we are. We have things going on with the community and are trying to improve our community all the time. In internal meetings, we actually say we don't understand community well enough and how to improve it. It hasn't changed other than that we have a new sounding board.

In the past, there were questions about the ability of MySQL to maintain its code base with critical bugs not getting fixed for long periods. You mentioned this morning that there have been a number of bug fixes so far this year. Were you trying to send a message?
Mickos: Absolutely. When we launched 5.0 (in October 2005), it was a major release for us. We pronounced it as GA, but I got an earful from my engineers who didn't want me to call it ready for general availability just yet. I still went ahead, but then we turned up bugs and had to fix more and more things. I think we were still recovering from that, so today I wanted to give credit to the people working on (the bug fixes) because it takes such complete commitment on their part.

You announced that MySQL 5.1 would become available this quarter. Should users expect the time between product introductions to change now that you're part of Sun?
Mickos: I'm hoping that it will shrink. We've made good improvements to our engineering organization and we've worked diligently on speeding up our cycles. Some customers take our software when it's in alpha stage, others when it goes to GA, while there are still others who don't touch it for a year after it becomes available. It's not as if everyone's cut from the same mode.

When companies take on new projects and they choose open-source infrastructure such as the LAMP stack, what's the most common reason you're hearing behind that choice?
Mickos: The first reason is that it's free. We talk about all these principles and philosophies, but for the majority, it's free. But you should ask separately, what makes them stay with us? Why hasn't Facebook moved to something else? Because they've found that the product we make gives them the scale and performance and reliability that they need.

Looking ahead, do you think MySQL or the OS will be more likely to occupy the middle of the open-source universe? I'm asking because Red Hat's moving beyond Linux to offer middleware.
Mickos: I think data management is such a specific chunk that we'll always be there.

Are you hoping to try to sell more into what's been Oracle's turf?
Mickos: We always say that we're not trying to eat Oracle's lunch. We're trying to eat their dessert.

OK, let's stay with the metaphor. Oracle probably would like to eat yours as well.
Mickos: Of course they do. They're a big powerful well-run company.

But it probably feels a lot different having a corporate parent with deep pockets than when you faced an Oracle alone?
Mickos: Well, that's interesting you say that because we were able to use our underdog status to our advantage. There are lots of people out there who would come to us and say we don't mind that we're a smaller company. They would say that they just hate all big database vendors.

What's your own professional timeline? When will you consider your job accomplished and that it's time to move on?
Mickos: No idea. I'm not waiting for such a moment. For the moment, I'm enjoying the job and will continue to do it for as long as it's enjoyable. I don't really plan my career or my future. In fact, I've never done that.

When Sun Microsystems paid $1 billion to buy MySQL, perhaps the biggest question facing the merger was the apparent culture clash. For years Sun had been a closed-source software company and the deal raised concerns within some quarters of the open-source community about how things might play out. But on Tuesday Sun sought to dispel any questions with a choreographed love-fest at the first big gathering of MySQL developers since the deal closed in January.

"So...enough of this free software stuff," Sun CEO Jonathan Schwartz joked during his appearance at the MySQL Conference & Expo. After getting the expected round of laughter, he quickly sought to reassure the developers attending the standing-room only gathering that Sun would continue to abide by open-source traditions.

"You want to know our secret plot? It's to serve (the open-source) community," he said. "Each one of those folks represents an opportunity for Sun.

Schwartz also went out of his way to play up similar cultural backgrounds of the 11,000 engineers working at Sun. Former MySQL CEO Marten Mickos, who preceded Schwartz on stage, was similarly upbeat about the development progress registered since the completion of the merger.

In particular, he noted that many more big corporations are showing interest in trying MySQL. At the same time Mickos reported that the community had reported 386 bug fixes so far this year, compared to 997 for all of 2007. In the past, there were questions about MySQL's performance in maintaining its code base.

During a break, I ran into a Sun employee who told me the question really wasn't whether Sun would change MySQL but just the reverse. "It's MySQL thats changing Sun's culture," said the employee, who didn't want to speak for attribution. "In the past, we had all these silly fights by being proprietary. But that's history."

Developers, at least so far, aren't terribly concerned about Sun's involvement.

"They seemed to have already embraced the open-source mindset for quite some time," said Eric Reeves, a developer from Houston, Texas. "I think everybody is hoping that there will not be a big change. Unless they take too violent a turn, there's too much community behind (MySQL). Sun would only be shooting itself in the foot."