Confident Schwartz cites Sun’s business plans

PALO ALTO, Calif. – Sun President and COO Jonathan Schwartz on Wednesday preached the company’s multifaceted plans for success in a changing IT marketplace, citing its software and hardware as well efforts to sell compute cycles in a grid and offer services.

Demographics have fundamentally shifted in the marketplace, Schwartz said during a presentation at the Churchill Club  business and technology forum. Recognizing the trend toward free software, Sun must offer all its software for free, he acknowledged.

“It’s all going to be distributed in open source form,” he said.

There have been 3 million licenses distributed for Sun’s open source Solaris OS, which boosts Solaris’s market presence, Schwartz reasoned. Sun is maintaining its OS rather than dropping it in favor of strictly Linux. This Linux-only strategy has not been successful for Hewlett-Packard, Schwartz said.

In a new development, IBM plans to support Solaris on its BladeCenter platform, Schwartz said. “A tier-1 systems vendor has now licensed Solaris,” he said.

Noting that users may want Solaris but not necessarily Sun hardware, the software was unleashed from the hardware, according to Schwartz. Now, Solaris will run on any system built, he said.

“Now, we’re the fastest-growing x64 vendor in the marketplace,” he said.

Not everyone wants source code, however, according to Schwartz. Recalling a meeting with officials at companies in the Midwest a year ago, Schwartz said he talked of the open sourcing of Solaris.

“One guy said, ‘I don’t want anymore source code. I’ve got plenty of that,'” Schwartz said.

Touting Sun’s own Sparc hardware, Schwartz noted the planned 32-way Niagara  chip. Sun has a performance advantage over IBM’s Power 5 chip, he said.

Dell, meanwhile, is “having a harder and harder time being relevant in the enterprise,” because of the power and space consumption required by its systems, Schwartz said, adding that electricity now is incredibly expensive.

Sun’s grid plan, meanwhile, calls for selling compute cycles. However, this has run into roadblocks. “If I want to sell you time on our grid, the government claims that delivery of computing as a service is actually the delivery of a weapon,” so all customers will need to be notarized, he said,

Schwartz also rejected the notion that Java has not been a moneymaker for Sun.

“First of all, we’re making money with Java now,” Schwartz said. Java gives Sun the ability to sell systems, services and technologies, he said. Citing 700 million handsets running Java, Schwartz said Sun can now deliver to the fastest growing infrastructure on the planet.

Additionally, Schwartz noted the download of 20 million Java run-times each month. “It would be interesting if Java became a platform for digital rights management because it’s everywhere,” Schwartz said.

Schwartz said large-scale enterprises do not run free software; they pay for support and maintenance.

He also said the network itself must be recognized as a means of creating new value.

Google, with its $100 billion market capitalization represents an example of this, he said. “That’s big bling.”

Companies in markets such as financial services and retail institutions must differentiate themselves based on their online presence, Schwartz said. Media companies could end up delivering financial products in the new paradigm, for example, according to Schwartz.

“It’s about creating a marketplace and creating a community and creating the technologies,” Schwartz said.

Schwartz also endorsed blogs, but said that regulations haven’t caught up with them.

“The world of regulation is still trying to catch up to the Internet,” he said.

For example, Schwartz said information posted on the fee-based Reuters system is considered public communication, but information put on his free blog is not.

“Who am I protecting?” he asked. “Reuters customers.”.

Just like managers now all have cell phones and e-mail accounts, they also will have blogs, he said. “Five years from now, the global manager will have a blog.”

Community-building is important for managers, he said. Sun, for example, must cope with its software being built in 28 countries spanning nine time zones. “You’ve got to figure out how to manage a community,” he said.

Fielding a question about Sun’s $4.1 billion acquisition of StorageTek, Schwartz said the purchase gives Sun a presence in storage. Companies always will have a need to store their data in-house, even if they outsource computing needs, Schwartz said.

Schwartz rejected the contention by an audience member that Sun is not a good partner to align with and he cited the company’s relationships with vendors such as Oracle and IBM. “I find it curious for you to assume that Sun was never a great alliance partner,” he said.

What has been tough is trying to figure out how to make a small company become a big company, Schwartz said. “On the Internet, no one can corner the market,” Schwartz said.