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Sun's plans...and how they could go wrong

George Colony CNET News

Published: 22 Sep 2004 10:55 BST

Step No. 4: Play up the OS-plus-platform advantage. Sun is playing a very old game here, but it will play it hard. The company is saying that you cannot be a legitimate, long-term player without controlling and harmonising the operating system and the platform. You must have control over both to offer easy and cost-effective solutions for your customer.

Hewlett-Packard is letting HP-UX die in favour of Red Hat and Windows; IBM is introducing Power systems that don't run AIX; and Dell never had an operating system.

Sun makes the claim that it will be the only vendor with a strong platform -- Sparc at the high end, x86 at the low end -- that also has a strong operating system to offer with Solaris at the high and low ends.

Step No. 5: Disrupt the market with a new pricing model. Sun wants its server pricing to mirror mobile phone pricing. When you buy a cell phone, you do two things: One, buy the operating system and the phone together; and two, subscribe to mobile services for monthly fees.

Sun is pricing the server the same way -- get the server for a very low price or potentially no price, and pay for the maintenance and applications (the value imparted) on a subscription basis. Sun believes that this new pricing model will only be possible for a vendor that sells and integrates the operating system and the platform. It can cross-subsidise between the two.

Step No. 6: Feature customer choice. Sun has dropped all of its stridency around Unix -- it is offering choice at the high end and at the low end. It is offering not only Solaris but also Linux and Windows for the operating system. And it is finally offering x86 via the Opteron chip from Advanced Micro Devices.

Step No. 7: Feature engineering. Sun is playing an old game here, too: "My tech is better than yours." It is saying that it will out-engineer not only at the operating-system level with Solaris but also on the hardware front. It is claiming that the new generation of Sparc will have vastly lower power consumption than Itanium and Power while featuring faster throughput and superior multithreading.

On the x86 front, Sun is saying that Opteron -- AMD's answer to Intel's Itanium -- is superior to what Intel has to offer and that, through its long-term engineering experience, it is going to produce x86 products superior to those of Dell, HP and IBM. Sun claims that engineering remains a distinctive competence of the company -- a battleground where it can hammer the competition, especially the low- or no-R&D companies like Dell.

Step No. 8: Feature the Microsoft-Sun deal. The money flowing from Microsoft to Sun will help. But more importantly, watch for Microsoft and Sun to concoct some tough frontal attacks on IBM, their avowed common enemy.

However, no plan is perfect and I see some potential potholes.