HP Joins Solaris Community (Live Free or Die)

In 1809, a hero in America's Revolutionary War, General John Stark, was forced to decline an invitation to a military reunion due to ill health. He sent a toast to be read in his absence that began, "Live Free or Die." That phrase is now the official motto of the American state of New Hampshire (where Stark lived), known for a fierce sense of independence (and no income taxes).

Hold that thought for a moment.

Today, we're announcing the single biggest and most important OEM/distribution agreement Sun's ever signed for the open source Solaris operating system - through which we'll be joining forces with the world's largest supplier of high volume servers, Hewlett Packard. As a result of the deal, Solaris gains tier 1 status, becoming a peer to Microsoft's Windows among HP's channels and partners. Commercial licenses and support services will be made available across the full breadth of x86 systems HP ships under the Proliant banner. More importantly, we'll both be investing in the innovation, community and marketplace surrounding our jointly delivered platforms - it's all about growing the Solaris market.

This relationship brings every major server vendor to the Solaris OEM marketplace, with HP capping a great list of Solaris endorsers that includes Intel, AMD, IBM, Dell and many others. At this stage, we count more than a 1,000 x86 systems supported by Solaris and OpenSolaris, and nearly 8,000 ISV applications. With Intel's Nehalem systems just around the corner, this ensures customers and ISV's looking for a robust, scalable open source cloud operating system, one that leverage every ounce of x86 performance, will see Solaris - alongside ZFS, DTrace, MySQL, Java and a whole array of embedded XVM virtualization support - from every x86 OEM on earth. Congratulations, HP, it's great to have you on the team!

Now, returning to the thought above, more than a century after General Stark's toast, New Hampshire found itself home to one of the earliest, and most effective software teams ever built, the Unix Group at Digital Equipment Corporation. In the 1980's, they adopted the same motto for their beloved Unix operating system, "Live Free or Die." That phrase has since become synonymous with software independence, innovation and intellectual property freedom - it's a way of life for an enormous portion of the free software company.

And it was with that exact spirit that Sun broke from the traditional Unix vendors in the late 1990's, freeing the Solaris operating system from ties to the underlying hardware on which it ran - and from traditional notions of proprietary software development. We made the source code available under a free software license, we invested heavily in communities outside of Sun (both Intel and AMD have been fabulous technical partners), and we drew customers and partners into the mix. Today, I am officially calling that transition complete, as we announce the most significant Solaris OEM agreement we've ever signed. Under the terms of the agreement, HP is joining the OpenSolaris community, optimizing its performance for HP servers and storage, while simultaneously investing to expand our penetration across a variety of new markets, from health care and manufacturing, to small and medium businesses.

From our vantage point, the spirit of "Live free or die" defines the future for all software, not just operating systems. Traditional proprietary software models, like traditional newspaper businesses, will slow as customers move to the cloud. Governments across the world, spurring economic activity with stimulus programs are already mandating or promoting open source software as a means of driving progress. Live free or die is a spirit spreading choice, technical independence and innovation - the revolution is well underway.

Numerous customers who share this philosophy helped bring the HP/Solaris agreement to fruition. Mark Hurd and I heard (and read) your encouragement directly, and both teams have worked tirelessly for months to craft a comprehensive, robust and effective engagement. On behalf of Sun, to our colleagues at HP, we're looking forward to working together.

If you'd like a Solaris CD, just click the image. Live free, indeed.

Posted on 09:00AM Feb 25, 2009 | Comments[21]

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JavaFX Hits 100,000,000 Milestone!

I have some extraordinary news to share.

As of late this evening, Sun will have shipped its 100,000,000th JavaFX runtime. Congratulations, folks! From a standing start in early December last year, JavaFX's download rate makes it the fastest growing RIA platform on the market - demonstrating the fastest adoption of any product Sun has ever shipped.

The 100,000,000 milestone was reached just in time for us to announce the second phase of our JavaFX strategy, the release of JavaFX Mobile at next week's Mobile World Congress. JavaFX Mobile is a runtime identical to JavaFX Desktop, but preconfigured for gizmos with very small memory footprints (like mobile phones). With our newest partners, from Sony Ericsson to LG Electronics (and more adding every day), this should add a massive breadth of mobile runtimes to the converged JavaFX count - and create even more opportunity for Java developers.

Why such a fast uptake? The Java platform continues to provide the world's most complete open source platform for a rich internet - supported by the world's largest developer community. JavaFX allows Sun to reach beyond our traditional base to creative professionals and non-coders working with audio, video and high performance graphics. And most importantly - JavaFX allows content owners to bypass potentially hostile browsers, to install applications directly on user desktops and phones. You'll see that phenomenon heat up in 2009, accelerated by the emergence of "AppStores" on every device connected to the internet.

What's our view of the overall marketplace? Here are a few thoughts.

First, freely distributed, open source software will continue to create enormous revenue opportunities for those that understand the underlying business model - as an example, the Java business for Sun, last quarter, delivered more than $67m in billings, up nearly 50% year over year. On an annualized basis, that means the Java client business (as distinct from the Java server business) is now a multi-hundred million dollar business, opening doors for Sun, and the Java community, across the planet. All built on freely available runtimes and source code. Free as in beer, free as in speech, and free as in market.

Second, devices are becoming functionally equivalent - what you can do with Flash is comparable to Silverlight, and again comparable to JavaFX. We each have our specialty, but over the long haul, my view is adoption rates and business models will be a greater driver of success than the technologies themselves. Why? Because if you're Amazon building the extraordinary Kindle 2, it matters that Sun won't put its business model between you and your customers - you want the technology you select to enable your business, not your supplier's, while enabling access to the world's largest developer community. (That said, must you use JavaFX or Flash or Silverlight to be a part of the rich internet future? Well, no - Apple used Objective-C for the iPhone, after all, completely discrediting the purist notion that if the app isn't written with a web scripting language, it isn't fashion forward).

Finally, the consumer electronics market is going to be infinitely more vibrant and competitive than the relatively stagnant personal computer market. Having just seen a host of new Java devices, from automobile dashboards and BluRay DVD players, to set top boxes, picture frames, VOIP phones and new consumer electronics... the economy might be cooling down, but the RIA market is definitely heating up.

The Java platform is only growing in importance and value, across billions of devices. At Sun, we're planning on maintaining Java's ubiquity as the number one runtime environment, backed by the world's most price performant datacenter infrastructure, all powered by Sun's cloud. After all, the network is the computer.

So again, congratulations to the team - and the Java community! Now, on to the next 100,000,000! (For those interested, download JavaFX SDK here.)

Posted on 11:25PM Feb 13, 2009 | Comments[40]

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Sun's Q2 Financial Results

These are my spoken notes from last week's earnings call - rather than recraft them, I figured I'd simply republish.

_______________________________

And thank you all for joining us this afternoon. 

I'll start with some perspective on our Q2 results and the current climate, then follow-up with commentary on our products disclosure - slides 6 and 7 in the slide deck. Then I'll turn it over to Mike Lehman (Sun's CFO) for commentary on financial metrics, and an update on the restructuring plan we announced back in November.

Overall, results for Q2 were in line with what we expected, as macro worries factored into customer discussions across all geographies. These concerns resulted in decisions related to higher end system purchases being pushed out - so billings were down year over year for SPARC Enterprise Servers, alongside the Storage and Service businesses attached to them, continuing a trend that began about a year ago. With that said, growth in our key areas continued, with Software a high point, and our Open Storage, CMT or "Niagara," and x86 systems businesses all delivering double-digit growth.

As we shared with you last quarter, Sun's business can be viewed in two categories, “Traditional” and “Growth," depicted on slide 7. Growth Categories now account for over 1/3rd of Sun's products billings, up from just 23% one year ago, and are continuing to open new opportunities within our existing installed base, and more importantly, far beyond it.

On the traditional front, declines in Enterprise SPARC systems are, by and large, the result of purchase delays - and with mission critical systems platforms continuing to age, this business represents significant future upgrade and refresh opportunities. But we were disappointed with the results, and the related effect it had on our storage and attached service offerings. Our tape and archive business out performed the competition, albeit in a declining market, but also represents an attractive base of annuity opportunities going forward.

On to the growth businesses. 

Software was a shining light in Q2 as total software billings grew 21% year over year and 52% sequentially. Java software billings grew 47% year over year, as we continued to monetize our distribution power to the world's client devices, from personal computers, to set top boxes and mobile handsets, and as we began delivery of our new platform, JavaFX, to OEMS across the world. As mobile devices and network enabled consumer devices continue to heat up, we believe the Java platform, running in front of billions of consumers, represents an increasingly attractive business.

MySQL and Infrastructure software billings grew 55% year over year on a surge in demand for open source middleware, from identity management and database management, to integration software. In the midst of this economic downturn, discussions related to free and open source software have substantially heated up - this is no longer a peripheral discussion with CIO's - cost reduction related to open source adoption has become a focal point for decision makers across the world.

Solaris, Management and Virtualization billings grew sequentially but not year over year, as customers migrated to subscriptions and service offerings and away from traditional licensing. We believe this transition has been largely completed in Q2, and again, positions the Solaris and OpenSolaris platform as one of three surviving operating systems for cloud computing - alongside Microsoft's Windows and Linux. As a result of our assets, from Java and OpenSolaris to MySQL and xVM, Sun is positioned to be the provider of the world's most complete open source software platform - for enterprise computing, and more importantly, for the cloud.

Now, on to the Systems side of our business. 

Billings for our Solaris-based Chip Multi Threading systems (also known as CMT or Niagara platforms) increased over 30% year over year in Q2. Based on Q1 and Q2 FY09 billings, CMT systems have now become a $1.4 billion dollar plus annual business for Sun, growing at significant double digits - and with IBM's Power and HP's Itanium available in only high end configurations, our Niagara platforms stand alone as volume alternatives to customers running IBM's AIX and HP's HPUX.  We continue to broaden our Niagara offerings, most recently with the addition of the T5440, a powerful midrange computer fueled by the growing base of volume Niagara units, in both blade and rack form, complementing our x86 platform offerings.

Speaking of which, Sun's family of Intel and AMD-based X64 servers increased 11% year over year in Q2 billings. Blades, which include SPARC, Intel and AMD processor-based systems, delivered another outstanding quarter, growing billings 62% year over year. We believe this performance reflects market share gains across both industry-standard and blade servers, building a footprint that allows for higher margin software, service and storage offerings. 

To that end, billings for Open Storage Products grew 21% year over year, which reflected, in part, a transition to Sun's flash-based 7000 family, also known as "Amber Road," around which we're seeing tremendous customer and partner interest. Based on industry standard components and the popular open source ZFS file system, these platforms deliver massive price/performance benefits against proprietary NAS vendors. With more than 2,000 channel partners now trained and certified to sell Amber Road, and with customer buzz among the highest we've ever seen for a new storage product, we have high expectations going forward. This is the first of what will be a complete line of open storage based products, covering the smallest customers, all the way up to mainframe storage.

Amber Road also sets us up to broaden our line of appliances - just as the freely distributed ZFS file system creates opportunity and awareness for Sun's open storage offerings, I believe our newly introduced Crossbow platform creates similar opportunities for Sun in the networking marketplace. Like the market for traditional storage, the networking marketplace is characterized by very high prices, proprietary software and restrictive hardware platforms - exactly the environment in which open source software and commodity components create choice and competition, welcome changes for customers seeking budgetary and technical relief.

To conclude, I'll remind you that tough times create unique opportunity for those who innovate - although we see customers under stress across the world, that pressure is opening their eyes to the alternatives Sun provides, across a wide range of ubiquitous software and systems innovations. Sun can draw upon the most pervasive software brands and developer platforms, the broadest user communities, and among the most powerful products and distribution assets to drive more aggressive growth in the future.

_____________________

Posted on 05:45PM Feb 06, 2009 | Comments[9]

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