Sun's Rekindled Star

Just how profound are Sun's four S's? Consider when an analyst asked Schwartz if he was concerned that 70 percent of all Solaris shipments were installed on non-Sun hardware. "That would imply we're missing the opportunity to ship elsewhere," he replied at last month's annual analyst conference in San Francisco.

What's more important to Sun nowadays is that customers choose to run Solaris on any servers--be it Sun's, Dell's, HP's or IBM's--rather than picking a rival OS, such as Red Hat Linux or Novell SuSE Linux Enterprise. Even though Sun now offers Solaris 10 for free, the company is betting that the majority of its customers will ultimately purchase maintenance, training and support agreements--a model that's served Red Hat well.

"It really adds to our credibility to have both AMD and Intel as we broaden our product range," says John Fowler, EVP of Sun's systems business.

Sun reports that more than 7 million customers and solution providers have downloaded the free version of Solaris in the past 18 months. How many have translated into paid support subscriptions? Sun isn't saying.

"I don't know how much stock to put into download figures," says Gordon Haff, an analyst at Illuminata, which follows Sun. That said, Haff believes Solaris 10 is on the right path. "Sun legitimately does seem to have a revitalized interest in Solaris." Case in point was Intel's decision to finally devote resources to fine-tuning its high-end processors for the OS.

Intel will optimize performance of its Xeon processors for Solaris and will develop and certify device drivers.

"They [Intel] are going to evangelize Solaris," says John Fowler, executive vice president of Sun's systems business. "That has a huge benefit to value-added resellers because you have one of the biggest names in the business behind Solaris."

Sun for the first time is also allowing systems builders and solution providers to install and support Solaris on bare-metal hardware, an area where the company sees huge volume opportunity, especially at the Web tier. Sun's subscription-based pricing for Solaris training, maintenance and support starts at $49 per instance, but there are options for basic and premium-level support, all the way up to site support licenses.

Sun's open Solaris strategy is intended to offer an alternative to Red Hat Linux and displace existing installations through superior pricing, service and features, says Tom Goguen, vice president of Sun's Solaris business.

"There's a customer base that's underserved by Red Hat and Linux and is looking to find an alternative," Goguen says. Sun just launched a program called Solaris Ready for Resellers, which will include training, collateral materials, marketing and incentives, Goguen says.

If Sun can prove critics wrong about Solaris, it could mean a major reversal of fortunes. After all, Linux was responsible for eating into the entire Unix market leading to Sun's free fall earlier in the decade.

Indeed, critics are skeptical that Sun is on a roll to the point where it can expect to see huge software growth.

"Sun traditionally had been a hardware company, and I think that's where they're going to remain," says Josh Farina, an analyst at Technology Business Research. His comment echoes the sentiments of numerous analysts.

Sun's challenge is to convince solution providers and enterprise customers that Solaris on any x86/64-based server is a viable alternative to Linux, and indeed can offer a more scalable option on that hardware. Solaris is now an open-source platform. At the same time, Sun makes the ultimate decision and has control over the source code, which is seen as an advantage to many customers.

"We built Solaris. When a customer has an issue or a call, we can contact the inventors of the [intellectual property] who have a Sun badge to turn around proper resolution on that technology quickly," says Richard Green, executive vice president of Sun's software group.

Underscoring his argument that Solaris is a better alternative to Linux, Green points to the third release, Solaris 10, made available in January. It has new security features, such as the ZFS file system, Trusted Extensions for security and improved support for virtualization, clustering and business continuity.

"People can argue back and forth about how it stacks up against various Linux features, but I think it's a fair overall comment that Solaris is more sophisticated than Linux is," Illuminata's Haff says.

As Sun rolls out the new SPA program, the go-to-market strategy with software will be markedly different, moving away from its model of pushing software solely through hardware-only partners. "They don't need to be a Sun hardware channel partner to do this and make a lot of money off Sun programs," Green says.

Sun has other key software assets in its arsenal, such as Java technology, which company officials like to point out runs on millions of applications and devices, ranging from cellphones to cross-platform apps. Much of Sun's Java technology, such as the NetBeans IDE, which is also available as open-source software, doesn't necessarily bring in revenue for Sun, but the company says it has 1.3 million paid licenses for the Java Enterprise System platform (which is also the basis of sales for Identity Manager and JavaCAPS software, among other offerings). "At the end of the day, Java is a positive thing for them because of other drag," Haff says.

NEXT: Servers -- a new frontier?