Analysis of IT news

Friday, September 14, 2007

News item: Microsoft and Sun announced an alliance to better integrate their products

News item: Microsoft and Sun announced an alliance to better integrate their products

Analysis:
people familiar with the two companies were very surprised by such an announcement, considering how Sun has historically been trying to lead the anti-Microsoft front. So much that some experts are questioning whether the announcement isn't pure hype.

In hindsight, such an alliance doesn't seem so abnormal. After all, Microsoft is a software company and Sun is a hardware company. But why now and not sooner? Two factors have come into play.

The first factor is the stepping down of Scott McNealy, Sun's former emblematic CEO for decades. McNealy would have probably never agreed to struck an alliance with Microsoft. But is successor surely doesn't have McNealy's hatred for Microsoft and is thus more pragmatic.

The other factor is that Sun over the years reluctantly departed from its vertical integration model. During its heydays the company was designing and building almost everything in its computers, from its own CPU (the SPARC processor family) to the operating system (SunOS and then Solaris). But it's hard to compete against specialized vendors such as Intel that enjoy the vast economies of scale of the PC market. It's hard to fight against such huge opponents as Windows or Linux.

So Sun decided to attack the Linux hardware market even if it's at the expense of Solaris. As a result, its stopped trying to push its own operating system down people's throats. Likewise, just like Apple switched to Intel processors after decades of Intel bashing, Sun began to sell servers with Intel-compatible chips (its buys them from AMD, so some honor is saved). Once again, it now has a better chance in the Linux hardware market as well as the virtualization market even if it comes at the expense of the SPARC processor.

Sacrificing Solaris isn't really a setback for Sun as the operating system has always mainly been a way to sell hardware. Sacrificing SPARC's monopoly on its computers must have been harder though, but the company nevertheless remains a computer manufacturer at heart that designs most of the electronics of its machines.

The processor and the operating system were the remaining stumbling blocks that prevented an alliance with Microsoft. Now that one can buy a Sun machine powered by a x86-compatible processor and without having to use Solaris, an alliance with Redmond makes much more sense.

So will Sun become just another PC manufacturer? Not so as it still aims to build high-end computers aimed to serve high end uses such as virtualization or data centers. Such markets indeed still offer the ability to differentiate from the competition. A good example is the Sun Blackbox portable data center, a whole shipping container filled with 250 SunFire servers and ready to be plugged to a company's network with very little work. Sun can use its expertise and engineering knowledge to design and build high performance systems while avoiding selling commodities unlike most PC manufacturers.

But like any market, shooting for the high end is only a temporary solution. Computer performance almost always eventually offshoots customer demand, and when that happens the pool of high end customers is shrinking fast. Just like today PC manufacturers are able to sell computers to put behind heavy-duty websites, tomorrow they too will be able to sell plug-and-play data centers - still with relatively low profit margins. That day, Sun will be forced to shoot for even higher end customers - if it can.

But at least Sun has bought itself some time. If the announcement is not pure hype of course.

1 Comments:

  • Le seul truc un peu surprenant, c'est le temps nécessaire pour que les choses évidentes s'accomplissent !

    Le déclin de Sun était écrit depuis des années. Et c'est seulement maintenant que Sun "rentre dans le rang". C'est toujours ce délai qui est difficile à évaluer...

    By Blogger Lefebvre, at 3:35 AM  

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