Can Sun become the Dell of enterprise software?

Can Sun become the Dell of enterprise software?Sun has finally unveiled the full dimensions of its quest to change the computing landscape. It's fundamentally a more monolithic landscape populated by pre-integrated components. It’s also Sun’s attempt to
Written by Dan Farber, Inactive

Sun finally unveiled the full dimensions of its quest to change the computing landscape this week. It's fundamentally a more monolithic landscape populated by pre-integrated components either acquired by or developed by Sun. It's an alternative to Microsoft Windows abstracted from the operating systems (Solaris and Linux) and processors (SPARC and x86). It's also Sun's attempt to become a leading solutions provider competing against IBM, HP and Microsoft.

"I can do to software what Dell did to hardware," is the way Sun CTO Greg Papadopoulos phrased it.

It's a sound strategy for a company that has been in search of the true meaning of "the network is the computer" and trying to earn the embrace of IT organizations that are fed up with the cost and complexity of enterprise computing. Sun CEO Scott McNealy said that corporations are paying up to 10 times what they should to purchase and run computers, and he is hoping to lead a pricing revolution that will lead to Sun profits at the expense of competitors.

The question is: Will this dog hunt? Are corporations ready for a Sun data-center-in-a-box? Can Sun really become more oriented around software and managed services rather than selling servers and continuing to spend R&D on its own proprietary processor technology? Is a homogeneous, one-size-fits-all software stack a realistic approach in corporations that are awash in a culture of heterogeneity?

McNealy sounds more like arch rivals Bill Gates or IBM's Sam Palmisano every day. McNealy told CIOs that they should no longer spend any time worrying about their infrastructure and data centers--that's Sun's job.

"The fact that IT organizations are called 'IT organizations' is a mistake in and of itself," McNealy said during his keynote at the SunNetwork conference. "They should be called 'IM organizations,' information management organizations. Sun is the IT company, and you are the information management company. We've got to get that separation of church and state. We do the integration, we make the interoperability, we keep it open. You manage the directory entries, the information, and the data, and we'll manage the infrastructure."

Sun differentiates its services strategy from IBM's by dictating that business practices change to align with the software, rather than change the software to align with the business practice. This sounds like the IBM of old that thrived on locking customers into its own hardware and software. But today IBM is less prone to maintaining account control through its own technology or dictating customer preference. The company has embraced Java, Linux, and other open standards. On the other hand, IBM has migrated its account control to the more profitable services branch of the company by establishing long-term relationships to manage IT services for corporations.

McNealy is fond of saying that IBM Global Services wants to "Hoover your wallet," and profits on maintaining the complexity of IT environments. Sun wants to clean up the mess with its new Enterprise Java and Desktop suites. "We want to sell you the data center, not the piston rings," McNealy says. By offering a complete stack, Sun believes that it can incrementally add server, storage, or network resources without ratcheting up management costs significantly.

However, both McNealy's description of IBM Global Services and its own approach are oversimplified and self-serving.

CEOs and CIOs are under pressure to reduce IT costs through consolidation, outsourcing, and developing more lean, flexible infrastructure. The beginning of the 21st century is a period of IT retrenchment. Rather than spend more money on IT, corporations want to get more out of their current investment and to adopt longer terms strategies--like utility computing--that can help take complexity and cost out of computing. That doesn't mean innovation stops; innovation needs to fit into a return on investment model and deliver tangible results.

Both Sun and IBM, as well as the other big players like HP, Unisys and the large system integrators, are going with the open standards flow and banking on services as a way to gain customer lock-in, or at least buy-in.

McNealy says that there's no need for any company to look under the hood or mess with the engine--just leave that task to Sun's managed services outfit. The same advice could come from Sun's competitors, although without the frontal attack on the role of CIOs. In this view of the world, the CIO is focused on monitoring the service level agreements and communicating needs to the service providers.

Sun is becoming more like Microsoft in its gluing together end-to-end software suites for the enterprise and desktop as a way to lower costs and simplify IT infrastructure. The major difference is that the Sun software stack theoretically consists of more standard parts that can be swapped out for another vendor's part, whereas Microsoft's is tied into the Windows operating system.

Back to Papadopoulos' statement that Sun can turn itself into a software giant comparable to Dell in hardware. It's a long shot, and would require competitors like IBM and Microsoft to have meltdowns for Sun to grow much past its current installed base of customers. You can expect IBM to follow suit with its own aggressively priced bundles of software and services, and Microsoft will also have to rethink its pricing if Sun's new software bundling gains converts.

So far Sun has signed up 10 customers, including publisher World Book with 300 employees and a telecommunications company with 36,000 employees. If Sun's top customers bought into the vision, the company said it could generate a profitable $1 billion annually in revenue.

Whatever transpires, Sun's software pricing model could help reset the bar on the economics of computing. You'll be paying less and getting more for your IT dollar. Whether Sun gets those dollars depends on many factors, the most of important of which is whether the company turns itself into a Dell-like machine churning out data centers or reverts to an Apple-like formula, selling elegant Sun boxes in a dwindling enterprise market.

Use TalkBack to let your fellow ZDNet readers know what you think. Or write to me at dan.farber@cnet.com. If you're looking for my commentaries on other IT topics, check the archives.

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