Sun, Fujitsu To Co-Develop Systems

In what Sun Microsystems Chairman and CEO Scott McNealy called an "acceleration" of a 22-year partnership, Sun and Fujitsu revealed Tuesday that they have entered a joint development pact that will see the two vendors merge their Solaris and SPARC-based server product lines by mid-2006.

The new combined set of hardware, code-named Advanced Product Line (APL), will replace the Sun Fire line from Sun and the PrimePower line from Fujitsu, McNealy said in a teleconference Tuesday.

Additionally, during the transition period leading to the APL introduction, the two companies will jointly distribute each other's product lines, Sun said. Once APL is available, both companies and their channels will sell the new line of servers.

The deal is designed to give both Sun and Fujitsu a broader distribution channel for its server products, McNealy said. Sun has faced financial troubles since the dot.com bust and has been trying desperately to increase revenue through a strategy it calls "disruptive innovation," which has involved releasing a slew of new products and introducing subscription-based pricing models for software and services.

"This combination of R&D ... significantly increases the amount of R&D our sales reps will be taking to market and offering to our customers," McNealy said. "It significantly improves and drives the number of people on the street selling Sun Fire and PrimePower computers, doing services and support, by many, many tens of thousands of people around the world. This is a big step forward for the ISVs who are writing to the Solaris/SPARC binaries in the marketplace."McNealy would not speculate on the financial impact of the deal when asked. He did say that Sun likely would not see fiscal benefit from the Sun/Fujitsu joint product distribution before 2005. So far, in fact, Sun's quarterly results have yet to reflect any of its so-called disruptive innovation efforts.

The news also puts to rest speculation about the future of Sun's UltraSPARC chip line after Sun decided to kill its UltraSPARC V and Gemini next-generation UltraSPARC products in April.

"APL replaces UltraSPARC V development," Andy Ingram, vice president, scalable systems group, said in response to a CRN question during a meeting at Sun's Menlo Park, Calif., campus Tuesday. In the future, Sun will focus on its new throughput computing microprocessor lines, code-named Niagra and Rock, Ingram said. Throughput computing, also called chip multithreading, means the processor cores of the chip are capable of running more than one series of application instructions, called threads, simultaneously.

Niagara, to be used in network handling and Web tier servers, is based in part on technology obtained from Afara Web Systems, which Sun acquired more than a year ago. Slated to follow Niagara, Rock is aimed at midrange and high-end servers and will make use of Afara technology and Sun designs such as the MAJC graphic processor.

By cutting UltraSPARC development at Sun, the Santa Clara, Calif.-based vendor will save on R&D costs in its microprocessor division, recently renamed the Throughput Systems Unit. Wall Street has been pressuring Sun to cut operating expenses over the past several years, though McNealy has steadfastly insisted R&D is an integral part of Sun's DNA. He reiterated that point Tuesday, and said the Fujitsu deal will allow Sun to shift R&D funds that previously were spent on UltraSPARC to other areas of the business, including software, storage and services.The deal also is aimed squarely at IBM, McNealy acknowledged. But while the APL line will have a particular focus on combatting IBM's mainframe systems, it also will include low-end servers, he said.

Sun and Fujitsu plan to jointly develop the new APL server line on next-generation Fujitsu chips based on Sun SPARC IX processors, McNealy said. Sun will contribute its Solaris OS and Java Enterprise Systems to the effort, as well as its expertise in providing networking technology, Ingram said. Fujitsu will design and manufacture the chips as well as contribute technology from its its mainframe microprocessor designs and motherboard work, he said.

In the past year and a half, Sun has expanded considerably beyond hardware based on its own UltraSPARC chips to offering a host of new servers based on processors from AMD and Intel. "Eighteen months ago Sun's entire product line was 900 mHz UltraSPARC III servers," McNealy said.

Even as Sun's own microprocessor plans continue to move forward with the Niagra and Rock processors projects, the vendor also is betting big on plans to sell hardware running Opteron chips from AMD.

In February, one of Sun's founders and its employee No. 1, Andy Bechtolsheim, returned to the company when Sun bought his startup Kealia. Bechtolsheim currently is working on next-generation Opteron-based servers that McNealy promised would give Sun the most comprehensive portfolio of Opteron-based hardware around."Within a year from now you will see Sun with the most complete and the most unbelievably cool Opteron product line of anybody out there in the marketplace," McNealy said. "We'll be IBM, Dell, and HP -- what they were to Xeon, we'll be to Opteron all wrapped up in one company. We'll be far and away and clearly the No. 1 Opteron player out there."

CRAIG ZARLEY contributed to this article.