Here Comes the Sun

The Silicon Valley Giant Shines on the Network Edge

Sun Microsystems Inc., once one of the hottest names in Silicon Valley, in the years following the dot.com bust faded out of the limelight. Things are now starting to heat up again for the company.

Jonathan Schwartz, who was appointed president and CEO of Sun last year, has opened Sun to new opportunities and spearheaded a restructuring to decrease the company’s headcount, consolidate its real estate holdings and significantly lower its spending. As a result, Sun has been back in black for three quarters now.

UltraSPARC T2, a new chip, which offers significant gains in processing while lowering energy consumption and costs, as well as Project Blackbox, a mobile data center solution that becomes generally available this month, are garnering the company some good buzz.

And Java, the wildly popular technology with which Sun’s identity — and now its NASDAQ ticker — are inextricably linked, continues to gain steam.

On top of all this, Sun would seem to be in a unique position in light of its tight bond with Google.

Andy Bechtolsheim, one of Sun’s founders, helped establish Google. He rejoined Sun in 2004 as senior vice president and chief architect within the company’s Volume Systems Products organization.

Eric Schmidt, the chairman and CEO of Google, used to be CTO and corporate executive officer at Sun, where he led the development of Java, prior to his gig with Novell.

And Schwartz was among the people who worked for Schmidt during his time with Sun.

“So there is a lot of DNA between the two companies in terms of the people that work there,” says Darrell Jordan-Smith, vice president for the Global Communications and Media Practice at Sun. “Both companies, in effect, believe in the network being the computer. And I think Google’s view is that the data center is the computer.”

Needless to say, Google is not a bad relationship for Sun to have, given the search engine-come-communications lord has been spending like a drunken sailor and seems to have its hands in everything from wireless to e-commerce to online video — and more. Sun’s close ties with Google may help it remain on the cutting-edge of communications, given the Web 2.0 outfit seems to be leading the way for the industry as a whole.

In addition to any infrastructure Sun provides to Google (the company declined to comment on that), late this summer Sun and Google announced a deal whereby Google will distribute Sun’s StarOffice for free as a part of Google Pack, which is a free collection of software that helps end users browse the Web faster, remove spyware and viruses, organize their photos, and more. Google Pack is arguably an effort by Google to gain control of users’ desktops so it can later target them with additional services and advertising.

StarOffice is Sun’s answer to Microsoft Office. But it’s open source. The Sun desktop suite application, developed by Germany’s StarDivision, which Sun bought in 1999, supports the open document format (ODF); that means applications running on StarOffice don’t require Microsoft software.

In his blog, Schwartz writes that StarOffice and OpenOffice — which work on Windows, Solaris, Linux and the Mac operating systems — have generated a user and developer community of more than 1 million users. (OpenOffice is the most widely distributed open-source multiplatform productivity suite; it’s the platform on which StarOffice runs.)

Sun’s 41-year-old leader says these products help “more users know and trust Sun,” and adds that “I’d bet more people know Sun via OpenOffice than know us through data centers. That’s an astonishing assertion, but with the Internet now reaching billions of end users, the number of consumers on the Internet dwarfs the number of IT professionals.”

But StarOffice and OpenOffice are blips compared with Java. The technology is widely used today by companies including Google and eBay, as well as in PCs, in mobile phones and by the application development community.

Java, Schwartz writes in his blog, “touches nearly everyone — everyone — who touches the Internet.”

That’s what led Sun to change its NASDAQ trading symbol this summer from SUNW to JAVA.

“We are no longer simply a workstation company, nor a company whose products can be limited by one category — and Java does a better job of capturing exactly that sentiment than any other four-letter symbol,” says Schwartz. “Java means limitless opportunity — for our software, systems, storage, service and microelectronics businesses. And for the open-source communities we shepherd.”

In Sun’s 2006 annual report, Chairman Scott McNealy, who had just handed over his president and CEO titles to Schwartz, wrote that the company’s Solaris 10 OS, a core technology for Sun, had “firmly established itself in the open-source community.”

In announcing Sun’s fourth-quarter and full fiscal year 2007 results, Schwartz pointed to Solaris 10 as the company’s growth engine. Revenue for the fourth quarter of fiscal 2007 were $3.835 billion; for the full fiscal year, they were $13.873 billion, an increase of 6.2 percent over fiscal year 2006. Net income for the fourth quarter of fiscal 2007 on a GAAP basis was $329 million; for the full fiscal year, net income was $473 million as compared with a net loss of $864 million for fiscal 2006.

“With a solid strategy and consistent execution, we delivered on our commitment to achieve at least 4 percent operating margin in the fourth quarter,” said Schwartz. “This milestone marks significant progress toward our longer-term growth plan of at least 10 percent operating margin for the full fiscal year 2009.”

Further growth could be fueled through such new Sun products as the UltraSPARC T2 processor chip (code named Niagara 2) and Project Blackbox (for which the company hadn’t released an official product name as of press time in late August) — both tied to Solaris 10.

The UltraSPARC T2 addresses both the data center requirements of service providers and enterprises as well as the desire of content providers and facilitators to place content at the edge of the network, says Jordan-Smith.

“Essentially, what an edge node would be two years ago would be $80,000 typically,” he says. “We can get it down to less than $10,000 today. So factors of eight, just in terms of equipment costs, but also on top of that in terms of energy co-efficients, savings of nearly five times of what they traditionally have been used to deploying in those particular centers,” says Jordan-Smith.

Despite those significant gains in price performance, it’s interesting that Blackbox — essentially, a shipping container housing climate control and some empty racks (which can be populated with Sun server and storage gear) — seems to be generating the most excitement among the Silicon Valley digerati.

What’s cool about Blackbox, according to Sun, is its low cost and ability to be deployed virtually anywhere. This mobile solution, announced October of last year and expected to be priced at less than $500,000 when it becomes available this month, is one-fifth the cost per square foot and between 20 and 40 percent more efficient from a power standpoint than existing data center solutions, Sun says.

But perhaps even more important is the fact that Blackbox addresses the No. 1 concern of data center customers — the lack of available real estate, says Darlene Yaplee, vice president of marketing for this product. With Blackbox, service providers, Web 2.0 companies or other businesses can quickly and affordably establish a data center anyplace, even where power isn’t available (as Blackbox can house a generator). That means if they have the space and the approval, a company could slap down a Blackbox in the company parking lot, a warehouse or even within an existing data center.

For service providers like the telcos, Blackbox could be a mixed blessing. On the upside, they themselves could benefit from the price performance of this solution for their own internal uses. Yaplee adds that service providers as well as systems integrators also potentially could be distributors, which could broaden their portfolios for the business side. But Blackbox also could be viewed as a competitive offering to those that run carrier hotels, offer colocation and provide other data center services.

Yaplee says the Blackbox was designed to augment existing data centers; provide data center disaster relief for big verticals like oil and gas, and the military; offer a temporary data center solution for such uses as movie production; and support large-scale service providers and others that need a quick data center expansion option.

The one publicly announced service provider now using Blackbox is MTS of Russia, which has employed the modular data center to extend the edge of its network into areas where power isn’t necessarily readily available, says Jordan-Smith.

Jordan-Smith says Sun has “a very symbiotic relationship with the service providers as a whole. We believe the network is the computer, and consequently we want them to be very successful in delivering bandwidth to everywhere and anywhere they possibly can so they can facilitate those services. So we’re very focused on that as a core message.”

Sun’s second core message to service providers, he says, is that it doesn’t want to compete with them.

“Microsoft is a competitor to the service provider as potentially is Apple with the content they have on the iPhone,” says Jordan-Smith. “IBM, you can argue, is a competitor, because they outsource many networking services through IBM Global Services. So we don’t compete with them in that way.”

For information about how Sun Microsystems and others in the industry are "going green," read our Added Insight story "Going Green: Vendors Deliver Solutions to Save Money - the World."

Thinking Inside the Box

The idea for Project Blackbox came out of an effort Sun CTO and Executive Vice President of Research and Development Greg Papadopoulos was working on with an outfit called Applied Minds Inc. about how to optimize computing.

Jonathan Schwartz and Greg Papadopoulos with the Blackbox.

But the real impetus for the shipping container form factor was triggered by a book called “The Box: How the Shipping Container Made the World Smaller and the World Economy Bigger.” In the book, author Marc Levinson talks about how the shipping container has become an important worldwide standard for distribution and commerce.

So important is the Blackbox initiative for Sun that the company did a worldwide tour of the product. The tour, which started Aug. 21 in London, now is crossing Asia, and will have its last hurrah Dec. 29 in Sydney.

Telecom Ties

While Sun seems to be close to Google, the company also has a strong tradition of working with the traditional service providers.

Among Sun’s recently formed ties with the telcos is a new deal with AT&T Inc., through which Sun will provide its Sun Fire servers to support core network and IP transport relating to video on demand on AT&T’s Project LightSpeed network.

Separately, Sun just cut a deal with traditional telecom vendor Nortel Networks Ltd., which will be distributing its StreamStar 4900, a product that can deliver hundreds of thousands of streams at $50 per stream — and can go straight from video to DWDM without requiring MPLS as a go-between.

Sun is also close with Ericsson, an important OEM partner, with which it is working on IMS/service delivery platform initiatives. And both Ericsson and Nokia are founding members of the Telecommunications Platform Initiative (TPI) with Sun, of which Motorola and Nortel are ancilliary members. This group is collaborating on a series of publicly available requirements documents, for the operations, administration and management layer (OA&M) and service layer environments.

The members of TPI expect to provide the broader telecommunications industry with new alternatives to improve time-to-service, time-to-market and ultimately, time-to-revenue. TPI involves Sun’s Java Enterprise System, Sun Cluster, Solaris, Sparc Niagara and Opteron products, and the OSS suites of Ericsson and Nokia. At the time TPI was announced, Sun’s Jordan-Smith said the effort “will divert more resources to support the development of value-added applictions that Ericsson and Nokia provide today. The resources they have in integrating such platforms can be diverted to enhancing time-to-market and services that differentiate their offers to our end clients.”

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