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Sun Ups Storage Ante, Plans Layoffs

Good news and bad news from Sun, which is taking advantage of its home-grown server technology to make a new storage play even as it reacts to long-term financial pressures with a new workforce reduction.

Sun, which has had little to brag about in its storage business despite the high-profile acquisition of StorageTek two years ago, on Wednesday unveiled a new virtual tape library based on its Thumper series of hybrid server/storage devices.

The move comes just two days after the company said in an SEC filing that it plans to take a charge of between $100 million and $150 million over the next several quarters with a restructuring plan that includes the layoff of an unspecified number of employees, the bulk of which is expected to happen by the end of this calendar year. The majority of the expected charge will go toward cash severance costs, Sun said in the filing.

Mark Teter, CTO of Advanced Systems Group, a Denver-based solution provider and Sun partner, said he was surprised to hear about the upcoming layoffs, and is not sure where Sun could cut labor costs, especially after the company last week reported a strong growth in profits over a slight revenue growth in the past fiscal year.

"Sun has operating margins under control, and now they have to raise revenue," Teter said. "So I don't know where the cuts could come from."

Tom Kuni, president of SSI hubcity, a Metuchen, N.J.-based solution provider and Sun partner, said he had expected the force reduction. "We heard that layoffs are coming because Sun's drive to profitability is not sustainable without it," Kuni said.

The layoffs should not affect channel-facing or customer-facing people, based on what Kuni heard. "I doubt if any customer-facing people will be affected by the RIFs (reductions in force)," he said. "Jonathan [Schwartz, Sun president and CEO,] told us that, unlike IBM and Hewlett-Packard, Sun doesn't have the number of salespeople it needs."

The main drag on Sun's financial recovery at this point is its storage business, which depends mainly on its StorageTek acquisition and its OEM relationship with Hitachi Data Systems. Sun is looking to improve its business in part by introducing a new virtual tape library based on its Thumper platform.

Virtual tape libraries, or VTLs, are disk arrays configured to look to the host server and the backup software as if they are physical tape libraries. Data is streamed to and recovered from the VTL as if it were tape, so no changes are needed to the backup process. However, because they use hard drives, the backup and recover speed is much higher than when using tape drives. Data backed up to a VTL can also be backed up to a physical tape for archiving or off-site storage.

Sun's new StorageTek Virtual Tape Library Value System, or VTL Value is based on the Sun Fire X4500 "Thumper" server, and includes the Solaris operating system and Sun's ZFS file system.

The VTL Value comes configured as a four-way x64-based server with two dual-core AMD Opteron processors, 16 Gbytes of memory, and 24 Tbytes of SATA hard drive capacity in a 4U rackmount enclosure. It also includes two dual-port Fibre Channel adapters and four Gbit Ethernet ports. List price is $84,995.

Dan Albright, product manager for VTL Value, said that the ZFS file system propagates the 48 hard drives of the Thumper server into a single pool of storage. Unlike other virtual tape libraries which write data to a single volume of storage, leading to path contention issues if two simultaneous writes are attempted, ZFS allows multiple paths of data to be written to different volumes, he said.

Albright said the VTL Value can be used by solution providers to do backups at enterprise customers' satellite and remote offices, in conjunction with the company's higher-end VTL Plus.

"A lot of large customers want to take their remote data and replicate it to a central site," he said. "You can do this with VTL Value at the remote sites, with VTL Plus at the central site. It's not something you can finish overnight. But maybe VARs can start with two or three VTL Value sites, and then add satellite sites once they establish the value with the customer."

Teter said he has been waiting for a way to bring the economics of tape to the disk arrays his company installs. "We call it 'spinning tape,'" he said. "Now it's the same cost per Mbyte as tape. If you look at the MSRP, it's about 1/3 of a penny per Mbyte."

Sun's Thumper is proving to be a disruptive technology, Teter said. "With VTL Value, we can disrupt the traditional backup strategy of doing backups to tape," he said. "With Solaris and ZFS, we get a high-performance, low-cost disk-based appliance."

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