Selling social infrastructure

Selling social infrastructure

Summary: The more Sun changes its story the more it stays the same. First it was "The network is the computer.

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TOPICS: Oracle
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The more Sun changes its story the more it stays the same. First it was "The network is the computer." That phrase hasn't gone away, but during the dotcom boom it was supplemented or trumped by Sun is "the dot in dot com." During the boom time, Sun's Unix servers provided the instrastructure to run many the highly touted Web sites that would later crater, as did Sun. In 2001, there was also "taking it to the nth," related to "midframe" computing and the "Net Effect": 

The Net Effect will allow end users access to exponentially more services. It won't be long before everything -- music, video, TV, and even data from household appliances -- is carried over the Internet. The Net Effect puts you in the driver's seat -- to access the information you want, whenever you want, from any device.

Five years later, the Net Effect has seriously ramped up and morphed into "Social Infrastructure," with a dash of Web 2.0, Participation Age and Sharing. Unlike IBM, which puts everything under the umbrella of On Demand, or HP's Invent tag, Sun likes to keep updating its message in concert with the latest industry trends. Now everthing is social, participatory and open.

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Sun CEO Scott McNealy has been evangelizing the Participation Age:

"In the Participation Age, business models that hoard products, services and intellectual property can be a hindrance to innovation and growth. More companies are discovering that sharing 'their crown jewels' with the world can open up new opportunities and drive new economic systems."

Driven by blogs, Java, Web services, text messaging and other elements, "participants are forming communities to drive change, create new businesses, new social services and new discoveries," according to Sun press materials.

In other words, use of the network is growing, the computer is the network and participants are more in charge. However, the individual participants aren't in charge of buying the data center infrastructure. Sun is trying to appeal to the check book owner CIOs and CFOs by open sourcing its intellectual property, coming up with a better TCO story and investing in its infrastructure hardware and software and service delivery.

Open sourcing as a strategy doesn't translate into instant market share gains against Microsoft, IBM and others who haven't adopted the full sharing model. While open source strategies can help drive developer adoption--free downloads of real, unencumbered products and even 60-day free trials of the UltraSparc T1 Solaris-based--not every CIO cares about having access to code or hearing about social infrastructure and ages of participation. It's a numbers game and value proposition conversation.

Sun President and COO Jonathan Schwartz believes that free can translate into sales. "CIOs will respond to volume--a volume development platform and a volume of services," he said earlier this week during a conversation we had at MashupCamp.  "Whatever it's called--social infrastructure or Web 2.0--there is a big market opportunity in assisting companies who want participate in new markets."

"A multiple of the dollars will be spent on ERP systems will be spent on social infrastructure," Schwartz added. "Seven or eight years ago, the client was dominated by one company. Today, the proportion of clients on the network delivered by that one company is getting smaller every day. The market is expanding, and more people are listening to music on competitive players, for example. The player is less of a concern that having the infrastructure to serve the network, which is where Sun can deliver better Web 2.0 infrastructure." 

What he says is accurate--the market for IT infrastructure is growing. The network is indeed the computer.  "I may be in a small minority about bringing back the phrase 'we are dot and dot com'--bring it back. It's not just me saying that we will be a big dot in dot com, where the value will be created. Remember, bubbles precede a build out."

Sun's challenge is getting more than a fair share of the forthcoming build out. It has the right elements to succeed, but the company has to convince infrastructure buyers to get on board with its social, participatory, open source, ecological story--and the products behind those stories.

Schwartz indicated that the new products, such as the Opteron Galaxy and Ultrasparc T1 servers, are gaining converts, but can they outpace the decline of the last generation of business systems in the overall financial picture? "The best metric you can look to is revenue, gross margin and developer adoption," Schwartz said. We'll be watching...

Topic: Oracle

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