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How Sun continues to shine

IT giant Sun believes that by staying true to its engineering roots it can continue to flourish

Sun may be trying to make Solaris a better Linux than Linux by bringing on board Debian founder Ian Murdock, but Canonical (makers of Ubuntu) is also busy at work on Nexenta, an Ubuntu-like GNU-based open source operating system based on the OpenSolaris kernel.

'Our goal is not to compete with a printer company or a Wii game console chip maker, the customer base we serve is the guys who see technology as a competitive weapon. Sun is in the business of delivering IT innovation to the guys who value it the most." That's the view of Sun's vice president for the financial services industry, Lawrence Scott, who was in the seaside town of Hua Hin recently hosting a conference for Sun's customers in the financial services sector.

Scott explained how Thailand finance sector today is at the epicentre of a confluence of rapid growth and the need to transform technologically.

In the United States, the financial services industry is becoming more and more regulated and thus it has become difficult to innovate, whereas Thailand's is of a substantial size but not yet faced with 50 different state laws and half a dozen watchdog agencies and a federal government. It is also missing the huge legacy infrastructure that the United States and Europe are burdened with.

"How do you make the connection between mobile banking, micro finance and the back end infrastructure? We enable the connectivity and the scalability required at the back end to enable those types of services at the front end, whereas many firms would have a significant problem implementing micro finance and mobile banking with legacy infrastructure," he explained.

Banks today in the US are finding themselves ever more squeezed by competitors such as Google's GooglePay and supermarkets such as Wal-Mart for many traditional banking services. This means that they need to innovate or risk decline.

"Today Google doesn't have a facility to take customer deposits or issue physical cash, but who knows? They may figure out how to do that with top-up cards and e-wallets," Scott said.

For Sun, the notion of an e-wallet is something that it is focusing on with its Java smart card. Indeed, Scott claims Sun is the only company with an end-to-end technology infrastructure.

Sun itself is a model organisation. His own ID card can be charged up and used to pay for food in the Sun cafeteria in Scotland, he said by way of example.

But why is Sun, which prides itself on being an engineering company, holding a conference on the financial service industry? Does this mean that on of the last great IT companies left is now following in the footsteps of IBM, HP and even Oracle and turning into a business services company?

Far from it. Scott explained that unlike manufacturing, which can continue for a while if the ERP (enterprise resource planning) system goes down, the financial services industry deals in data and that means if a trading platform or ATM network goes down, customers will defect. IT is thus like blood for financial firms, and it is much more appreciated in the financial industry than it is in other industries.

"You mentioned that we are the last IT firm standing. I think we will continue to play that role for a long time to come. Sun is, at heart, an innovative engineering company. We came up with the tagline 'the network is the computer' long before it was fashionable. That will continue to define us going forward," he said.

Last year, Sun made headlines for open-sourcing its Solaris operating system selling AMD-based Opteron servers. Many have commented that this may leave Sun without a paying market as its customers may start running Solaris on generic X86 servers or even wean themselves off and switch to Linux on AMD entirely.

"For a while we had been internally assuming that the high end of the business would begin to slow and, strangely, it didn't happen. The rationale is that people are not looking at just the cost of the box but the cost of maintaining the entire infrastructure. They are seeing through the story that low-end commodity boxes are cheaper to run. Yes, they may be cheaper to procure, but they are not cheaper to run," he said.

Scott said that Sun software runs best on Sun and that by adopting the Opteron architecture early, Sun was able to do things with the channel and the bus that other OEMs did not, thus boosting speed and reliability.

As for Solaris versus Linux, Scott said that today he is seeing a clear move from from a fragmenting Linux market to a unified Solaris one. In fact, Sun's head of operating systems platform is none other than Debian Linux founder Ian Murdock, who has announced that he will make Solaris a better Linux than Linux. Sun's software team has the luxury of half of Sun's annual US$2 billion a year R&D budget.

"We remain unambiguously committed to making Solaris the best enterprise class operating system out there. Open Solaris addresses the Linux bigot's argument that you can't possibly have the resources or skills to keep it up to date and the whole notion of a community based OS gives you so many more advantages. People called Solaris a proprietary platform. We open-sourced. They called it expensive. We shifted to a maintenance subscription, the same as RedHat and Oracle," he pointed out.

Scott said that a massively multi-core machine running Solaris was the perfect solution for IT departments used to mainframes here in Thailand.

Asked about his view of legacy systems and the trend to encapsulate them with SOA wrappers, while continuing to hire Cobol and RPG programmers to maintain them, Scott said that while that is possible, many of the people who have taken that path are now scared to death at the cost base that has left them disadvantaged compared to their more modern and nimble competition.

He said that he does not know how long the market for RPG and Cobol - one of the key skill areas needed by companies such as IBM and Reuters - will continue as he simply does not deal with these companies stuck with yesterday's technology. "If you put a gun to my head, I'd say [it will continue for] 10 years, but even IBM has begun to realise that the value of their mainframe infrastructure is rapidly eroding and that Z/OS is nothing more than a big hulking database server."

As for SPARC and the somewhat less than class-leading performance of the latest Ultrasparc Niagara chip, Scott said that the chip was not maximised for performance, but rather was optimised for performance over power consumption.

Last year, for the first time, the cost of powering a data centre exceeded the cost of building one. Sparc runs not just cooler than the competition, but more importantly, the heat is evenly spread across the chip. He also noted that we can expect a lot more from the next generation of UltraSparc, Rock, which will be released next year.

When asked about his views on Sparc versus Intel's Itanium, Scott dismissed the chip as being dead from the day it was born.

Rampa Manoonsin, general manager, Sun Thailand, said that while there are fears of a slowdown in the economy, she feels that these fears have been exaggerated and that apart from the large government mega-projects that have been frozen, it is still business as usual.

Bangkok Post, 23 May 2007