Are You Serious? (Sun Partnering with Microsoft)

Last week, we signed a deal with Microsoft. Remain calm.

The good news is everyone paid attention. The bad news is it spawned a lot of questions - which I thought I'd answer here.

The announcement was this: Microsoft will be supporting Project Virginia, Sun's soon-to-be-announced hypervisor platform - meaning we can consolidate and manage Windows (alongside Linux and Solaris). Secondly, Sun will support Windows virtualization - allowing Windows to do the same for Solaris. And finally, Sun agreed to package and support (or 'OEM') Windows for customers and partners that want to buy direct from Sun.

A few folks have suggested this announcement (reminiscent of a change in our ticker symbol) represents a dramatic shift in our strategy, and that my statue will thus never grace the marbled lobby of the Free Software Foundation. The former's obviously not the case (the latter may be), so I figured I'd offer a little more background.

First, as recently as two years ago, Sun was a non-player in the x64 server space. Customers that wanted to run Solaris on non-Sun hardware couldn't, and those that wanted to buy x64 systems from Sun couldn't. Partners couldn't sell either solution, and when the industry rankings were published, we kept showing up in the "UNIX" or "proprietary" categories (ridiculous monikers, both).

We knew we wanted Solaris and our Systems business to grow beyond their own boundaries - we wanted customers to buy Systems from us, even if they weren't running Solaris; and for them to buy Solaris, even if they weren't running it on a Sun System. (If you think about both businesses as intersecting sets in a Venn diagram, the best way to grow the intersection isn't to jam the businesses together, it's to grow the sets.) Day 1, everyone wanted to know, "Are you guys serious?" - that question was our number one impediment to selling.

Now, we started our x64 relationship with AMD - optimizing our software and systems to scream on their Opteron platform. But rather than taking on the planet, we focused our efforts on customers and markets where we could bring our engineering and design prowess to bear - mission critical, scaled computing. We didn't touch tower servers, we avoided focusing on dentist's offices and corner shoe shops. We focused on systems like these, and customers like these. And we started winning deals. Big deals. Running Solaris and Linux, sure, but also Exchange, SQL Server and Microsoft's IPTV stack.

As time progressed, we expanded our work to include Intel's offerings, and similarly sharpened Solaris on our, and others' Intel platforms. We fueled performance and started driving advances that grew the market for us and the community. Questions surrounding "But are you guys serious?" started falling away. We were serious. Deadly serious, and now everyone knew it.

In a world that lacked differentiation, we differentiated via design. Led by Andy Bechtolsheim and John Fowler's team, we delivered measurably better performance, density, efficiency, along with better integrated management and serviceability. Our current lineup now completely integrates our SPARC and x64 systems and supply chains - so when you a blade system (as shown here) from us, for example, you can intermingle SPARC, AMD and Intel blades, manage them all identically, while running Linux, Solaris and Windows - under Project Virginia as well as VMWare's offerings. We can serve 100% of the market (which is why we're so focused - it's easy to get distracted with a market this big). Like I said, our products focus on design innovation.

Net result? We've been moving up in both operating system and x64 server rankings. Every year, inch by inch, dollar by dollar, RU (rack unit) by RU. We're now the fifth largest x64 vendor in the marketplace - with a billion dollar annual runrate (as of our last reported quarter). That's quite a ways up from "invisible" two years ago. Solaris is on a similar tear (watchful analysts have even started tracking it separate from our hardware) - and that's before we launch Virginia.

And although we've built a billion dollar annual runrate in the x64 business, we still hear objections - the biggest? "Your competition says you're not serious about Windows." Now of course, that's just silly - SQL Server screams on products like our x4500. In fact, we're the foundation behind one of the biggest Windows deployments in the US at AT&T (supporting their Microsoft IPTV rollout). We do a ton of business on Windows - with both hardware and software (by definition, most Java developers are on Windows, and it's always been a part of our software focus).

But now it's time to open ourselves up to the entire market, to take the last objections off the table. So we got together with Microsoft to ink a new relationship, through which two things will happen.

First, Microsoft will certify Windows running within Sun's Project Virginia. Customers and partners looking to consolidate and virtualize Windows instances can safely do that under Sun's offering. This is a big deal for us, and extends Sun's reach beyond Linux and Solaris into the Windows domain. Secondly, we'll reciprocate - and support Solaris via Windows virtualization. Customers have more choice - and to be clear, we are committed to doing everything (everything) at Sun in the free software community (even without a statue). This agreement does nothing to change that.

Second, Sun will OEM and support the Windows platform. We'll be bundling our Java runtime environment, our tool chain, and our Java Enterprise System middleware (and the OpenOffice suite for good measure) in the Windows we distribute. So customers and partners can now buy directly from Sun. I've heard from a number of both since we signed this deal saying how excited they are - they can now consolidate a lot more business on Sun. That's what we wanted. And our competitors have to take a slide out of their presentations (the one that says "Buy from us, because Sun isn't serious about Windows.").

So do I think this deal is good for Sun? Absolutely - it opens more opportunity, puts our past behind us, and gets everyone focused on Sun's virtualization, Solaris and Sun's Systems portfolio - independently. Does it signal a strategic shift inside of Sun? No - we can walk and chew gum at the same time. Running, virtualizing and supporting Windows opens doors.

So are we serious? About virtualizing Windows? About being a good OEM partner to Microsoft customers? About running Solaris on all volume hardware? About being a cross platform software company? A major force in datacenter design? The world's largest corporate contributor to free software?

Why, yes.

Next question.

(And for those wondering why we didn't talk about this at our analyst event a couple weeks ago, the deal wasn't done - and random acts of messaging seldom help progress a relationship. Sometimes they do, but not this time around.)

(Update: wanted to add our latest Glassfish news...)

Posted on 10:30PM Sep 16, 2007 | Comments[71]

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