Bubbles Precede Build Outs

Just got back from a 5 city tour in Europe, with a two day stint at 3GSM World Congress.

For those that don't know, the 3GSM conference brings together the world's mobile operators, technology and service companies, a sprinkling of policy makers and a throng of journalists for a frenzied few days in Cannes, site of the so-named film festival. This is the event's last year in Cannes - 35,000 attendees (and an energy level officially sealing the coffin of computer tradeshows) is overload for the small beach town, to the point that companies rent boats in the harbor for lodging and exhibit space (the most impressive of which was definitely this one).

A quick run through of interesting events.

First, the humor: the pilot on my flight to Cannes walked up to me after our arrival and said, "hey, Solaris 10 is really cool." I figured he was pulling my leg. And he said, "No, seriously, I just downloaded it." Turns out he's a developer in his spare time, and was running it on his laptop. Gotta love the internet's reach. Here are the latest stats:

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Total Number of Solaris 10 Licenses Downloaded Since First Commercial Ship:

SPARC: 191,107

x64/x86: 348,155

Total: 539,262

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FANTASTIC! After we get to a million licenses (which on this trajectory, should be within the next 30 days or so), Solaris 10 goes Platinum. These figures are blowing by our initial estimates (and straining our download centers - my apologies to those having to wait while we get mirrors set up).

Solaris certainly wasn't the focal point of my presence at 3GSM - and frankly, with a market this big, growing this fast, the only unifying themes are scale and security. Everyone, but everyone at the show has a different agenda - from the African operator, whose service expansion is gated by building and securing electricity generators colocated with cell towers; to the developer of one of the most successful new Java services, Virtual Girlfriend. Don't forget her birthday, or all hell breaks loose (I didn't check, but I don't think she can lock you out of your phone). I'm sure Virtual Boyfriend is on its way (virtual Mother In-Law? I digress).

I met with executives from our largest operator customers, hosted a panel with our OEM's (original equipment manufacturers, who embed everything from SPARC to Solaris to Java in all range of network equipment and 3G handsets), and some time with the media and new service developers. Discussions ranged from collaborating on very low cost handsets for developing nations (the African operator, above, believes they can double their 15 million subscriber base with a sub-$30 handset), to managing heat and power in network operations centers with our upcoming Niagara systems; the media was as different as the operators, from the traditional American business pubs wanting to know about Microsoft's role in handsets (folks, move on), to the Asian and European journalists focused on next generation mobile services (in-car is hot).

Our OEM's were really happy with the license we'd chosen in open sourcing Solaris - the CDDL deliberately avoids the viral attributes of the GPL (General Public License), and encourages intermingling proprietary intellectual property with Solaris without fear of being forced to divulge trade secrets, or price them at zero (two downsides of the GPL for OEM's are the obligation to change the licensing and pricing of their IP in the event their code is mixed with GPL code). The big theme from OEM's was convergence and control - the telecommunications world is moving to adopt the same general purpose infrastructure deployed in the enterprise, and our ability to help them accelerate that shift, while leaving them in control of their IP, creates an opportunity to dramatically lower cost and grow the market. We've also planted the seeds for an OEM led carrier grade Solaris (stay tuned), and a large-scale shift away from proprietary databases, toward open source alternatives.

There was a lot of talk about Liberty services, and interoperable network identity - the era of "MCommerce" (mobile commerce) is clearly well underway, and requires interoperability between institutions for the really interesting applications. Two examples: Mobile ATM allows you to check your bank balances, transfer money, charge up your pre-paid calling card, or send dollars to do the same for other subscribers, all from your Java enabled phone. Globe Telecom in the Philippines (a nation totally hooked on SMS text messaging), has deployed GCash, a text based service that enables commerce at the point of sale (your phone is your wallet, you use it to make purchases at any merchant's cash register). Both are predicated on multiple parties being able to interoperate securely - this is a trend we'll see accelerate. Contrast this to PC's, where, lacking hardened security or integrated billing operators (DSL is a flat fee service, vs. a cellular calling plan, which is basically a micro-billing platform), identity islands are still the norm.

Java is continuing to grow, and accelerate - on both the devices (and SIM cards embedded within them), and in the network infrastructure. There are now over 500,000,000 Java enabled phones in the world, and more than 60% of all new phones will ship, from the factory, Java enabled. The rush of new developers we're adding to the nearly 5 million Java developers are J2ME developers, folks creating the services (from commercial to social) through which the majority of the world will experience the internet.

And just in case you missed it, let me say it again: the majority of the world will first experience the internet through their mobile phones. We sometimes forget that 10 times as many people bought handsets last year as PC's. Round numbers, there were a BILLION wireless devices sold last year, and around 100 million PC's. To that end, the odds are much higher you'll watch broadcast broadband content on your phone than on your PC - and now that Nokia (and their peers) are the world's largest camera manufacturers (just think about that for a moment), the odds are far higher you'll even create broadband content on your handset. Talk about change. Comdex is dead, long live 3GSM.

Another interesting meeting was with the CEO of Oberthur, who predicts we'll see 1 GigaBYTE SIM cards by years end - that's right, a Gig on an interchangeable SIM card. For extra credit, what happens when a significant portion of that memory is executable? That's a mighty small computer.

The net of all this - bubbles precede the buildout. And the buildout's clearly underway with mobile operators chasing revenue and value. With operators beginning to see a market driven by services and content, maybe there's irony in 3GSM and the Cannes Film Festival having shared a venue for so long. How much longer before a first run movie premieres on a handset?

Laugh now, get it out of your system. Convergence doesn't respect form factors.

Posted on 09:57AM Feb 19, 2005 |

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Transparency and the Turning Tide

I just got the first summary download numbers for Solaris 10 since we shipped a week or so ago. One word, "wow.":

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Total Number of Solaris 10 Licenses Downloaded Since First Commercial Ship:

SPARC: 151,039

x64/x86: 269,856

Total: 420,895

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An early look suggests we're not going to have a problem with demand.

I was with a big ISP (internet service provider) prospect yesterday that said, "the only reason we left Solaris was to run x86 on low end boxes. Now that Solaris is there, we're going back." I asked how they liked the open source license we worked with the community to draft, and they said "we like the CDDL." We obviously do, too - and we'd like to see others in the industry adopt it (note: that's why it's an open license, not restricted to usage or control by Sun.)

Doing some basic analysis on the numbers, above, suggests the majority of downloads are to non-Sun based hardware (ie, x64/x86). One of the folks in the meeting I mentioned asked me how we felt about what he viewed as "leakage" onto non-Sun hardware. I said, "THAT'S NOT LEAKAGE, THAT'S GROWTH!" We've now got a relationship with customers we would never otherwise meet - running Dell, HP, IBM and other hardware. They're all prospects now. And if there were one knock I heard during our analyst conference a week ago, it was "where's the growth?" Well, we've obviously planted a few more seeds. (Not to mention giving a massive boost to utilization and performance of our newest USIV SPARC systems - and as much as giving free hardware to existing Sun customers: run Solaris 10, retrieve the (average) 80% of your datacenter currently deployed as a space heater (because it's unutilized).)

Speaking of the analyst conference, it's been about a week since we had a couple hundred industry and financial analysts in town. The conference was a surprise in a number of ways. First, and this takes some humility to say - after years of brooking no end of harsh criticism, I was surprised to hear how positive the analysts were. Many of them haven't exactly been our fans over the past couple years - so it was... jarring is the word I'll use... to have them say "we love the strategy." I definitely heard (and you will hear, shortly) that the perception tide is turning. My favorite quip came from my last meeting, in which an analyst said, "look, around the hotel bar last night, I heard only positive comments." Not like I spend a lot of time in hotel bars, but I'm assuming that's a big change.

The second surprise was being beaten up for (get this) not being vocal enough about our storage offerings - and for not talking more about our newest 6920. Which one analyst said "was one of the hottest offerings in the storage market today." To the analysts who made this point (you know who you are): please consider this a step toward being more effusive :) More on the 6920 (and why storage, and storage containers/virtualization is going to be the belle of the ball for the next decade) in a later entry.

After we launched the world's first true computing utility (and an exchange to keep everyone honest), IBM never managed to respond to our head to head offer to compare grids - which Dan quickly pointed out. Again, I truly believe transparency is one of our biggest competitive advantages.

Finally, I've been promising myself to stay out of the discussion on open source software licensing, and why we elected to use an open Mozilla-based license for Solaris, vs. something more restrictive. So instead of wading in, and taking a stand on everything from the self-determination of developing nations to the needs of OEM customers, I'll make only two points.

One, the notion that all free software has to ship under a singular license is like saying all news has to come through one newspaper. Java, Firefox, FreeBSD, Windows, Debian, JBoss and Solaris - The New York Times, The Economist, The Onion, The Register, The Wall Street Journal - prove that there's value in diversity, not homogeneity. In thought. In speech. And intellectual property licenses.

Second, I agree with RedMonk.

At minimum, 400,000+ downloads proves there are a silent majority of open minds in the world.

_______________ Update: and as usual, Simon has more insights on the topic...

Posted on 11:27AM Feb 11, 2005 |

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Caro Presidente Lula...

Carta Aberta ao Sr. Presidente da República Federativa do Brasil

Ilmo. Presidente da República Federativa do Brasil
Sr. Luis Inácio Lula da Silva

Caro Presidente Lula:

Nós da Sun Microsytems acompanhamos com especial atenção e otimismo a sua participação no Forum Social Mundial, realizado na cidade de Porto Alegre, Brasil, e no Forum Econômico Mundial, em Davos, na Suíça, durante a última semana de Janeiro.

Nós consideramos as suas iniciativas governamentais voltadas à inclusão digital como corajosas e sábias. Nós aplaudimos a sua adoção de plataformas de padrões abertos e software livre, e concordamos firmemente que tal inovação permite que todos os setores da população, e não apenas os privilegiados e influentes, tenham acesso a auto-determinação e independência.

Uma rede aberta e software livre são a base para oportunidades iguais, e o seu compromisso é um alerta para o mundo ver que o Brasil pretende desenvolver suas próprias soluções tecnológicas, suas próprias competências e sua própria indústria.

A Sun Microsystems, com raízes na Universidade de Stanford, é o maior doador mundial de código fonte para a comunidade mundial de software livre. Do OpenOffice e StarOffice, do OpenSolaris ao sistema operacional Solaris, e do trabalho pioneiro com o sistema Java Desktop System, baseado em Linux.

Nós acreditamos na inovação, e nós acreditamos na liberdade de escolha. Está muito claro que dividimos esta crença com você e com o Brasil.

Por favor, aceite os nossos melhores votos de estima.

Cordialmente,

Jonathan Schwartz
Presidente,
Sun Microsystems Inc.

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Portuguese to English translation.

Posted on 10:50PM Feb 08, 2005 |

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Blogosphere's IQ just rose

You'll notice I've added a newbie to my blogroll (the column to the right), Greg Papadopoulos.

For those of you that know Greg, you'll agree that the always rising IQ of the blogosphere just took a step function north.

Greg's right brain job is to be Sun's Chief Technology Officer. His left brain job is to be the voice of reason in Sun's internal strategic debates. Leveraging both hemispheres yields wild ideas that somehow always turn into business opportunities. (To boot, he's one of those rare individuals from whom the phrase "I told you so," has never been heard.)

(After months of needling) He's just added his voice to the discussion surrounding our choice to adopt a liberal license for OpenSolaris (vs. the GPL). At some point, those of you that aren't up to speed on the vagaries of intellectual property licensing are going to want to get educated. It's going to matter to just about every business on earth.

His first blog entry is a good primer.

On a related note, I've also added Piper Cole, who leads Sun's public policy initiatives as Vice President, Global Government & Community Affairs. She was a cornerstone in driving the adoption of Project Liberty across the world's governments (she's currently focused on the US government's fixation with options expensing).

Piper and her global team are now continuing to educate the world's policy makers about the promise of open standards and open source. As foundations for national opportunity, technical interoperability, and economic self-sufficiency. And not just for operating systems, either.

Piper's point? You can't get locked out of the future with open standards and open source.

Greg's point? OpenSolaris and the CDDL can't lock you in, either.

Posted on 09:24PM Feb 07, 2005 |

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Comparing Sun's Grid to IBM's Grid

We did it! The grid is live!

I have to admit it was fun throwing a big switch to "light it up" (although I did ask the techs on stage about 10 times if there was live current going through the props we used - the answer was no, thankfully). We're well on our way to building out a global grid, with partners across the world, to make the network service called "computing" as ubiquitous, and affordable, as electricity. Ditto for storage.

Our view is that many suppliers in the technology industry have relied on mass inefficiencies and opacity to drive short term profits - why bother delivering a computing service if you can custom build a grid for each customer and sell 10X the infrastructure? To us, that sounds like betting against the network - a bad move for any market. So what we introduced was simple - an opportunity for any customer needing a computing or storage grid to leverage ours for a simple, transparent price: $1/cpu-hr, or $1/GB-mo.

Having read a lot of the coverage and commentary, there's definitely a population of folks on one end of the spectrum saying "Are you nuts? Why would I pay $1/GB-mo if I can buy an iPod and tote it everywhere?" To those folks, let me safely say, You are not our target audience. To the crowd that did the math for their enterprise archiving installations, and figured they're paying quite a bit more than $1/GB-mo, help is on the way.

Now what was especially gratifying was seeing all the coverage in the press. IBM took the bait to start a discussion on price. Remember, in the commodity world, it's all about price and transparency - that's at the heart of an efficient market. Now we're playing on our terms.

IBM has relied on a broad portfolio of products to make competition tough for companies that lack their breadth - IBM Global Services in particular specializes in complex outsourcing contracts, where the price of any individual line item - say, the price of a server for a year - is nearly impossible to divine. By design. My view has been transparency is therefore our competitive weapon - make the price transparent, and presuming they're forced to follow, they'll get dragged into a discussion on price. Drive the discussion to standard offerings, and they'll have to play defense.

One journalist I spoke with said, "IBM said their offering is only 48 cents." I responded, "And did you ask IBM what you get for that?" The journalist said, "IBM said 'it depends.'" Sorry, that's opaque pricing, not transparent. Another journalist said, "IBM said you can't specify a single price, because every customer wants something different." Maybe so, but then we're not talking about a utility service - utilities rely on the ability to aggregate demand with a standard offering, not one offs. If you wanted something other than water from the taps in your house, the utility company providing your water would say "sorry, we're not interested in your business." Utilities aggregate demand. Aggregation isn't possible without standards and uniformity.

We're well aware that grids are inappropriate for many of today's applications or customer environments. But there's a broad market of workloads that are right in our crosshairs, from risk analysis to movie rendering, data warehousing to reservoir simulation. We understand full well that this represents a very small portion of today's computing needs. But we also know that's where the network's headed - that more traditional apps are spilling into the grid, and the market's growing.

So in the spirit of giving IBM an opportunity to respond with greater clarity, here's a table presenting what $1/cpu-hr buys you from Sun.

Sam, we hereby invite you to fill in the blanks:

Comparing Sun's and IBM's Grid Utility Pricing

* Not a subset, but all patents related to and covering operating systems (do not include unrelated patent chaff).

We're definitely interested in IBM's response - and something tells me customers are going to be mighty interested in how IBM fills in the blanks, as well.

Let's start counting the days until they respond. After all, it's all about transparency.

Posted on 08:27PM Feb 02, 2005 |

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