Sun Takes Aim At Red Hat

Unix giant fights to win back Linux customers.

September 22, 2004

5 Min Read
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Sun fired a major counter-offensive against Linux nemesis Red Hat Tuesday by announcing hefty discounts on its forthcoming Solaris 10 Unix upgrade on commodity hardware.

Sun President Jonathan Schwartz, speaking at a Wall-Street conference, revealed plans to offer a 50 percent discount to any Red Hat Linux customer that switches to the Solaris 10 Unix upgrade and will repurchase any customer's Xeon-based server and give them a "big" discount of $1,250 off AMD's Opteron servers.

In addition to those price incentives, Sun said it will provide a global Unix/Linux support center to handle customers' technical issues 24 hours per day, seven days per week.

In the financial services market, Sun sales have been hit hard by the cost-efficient Linux-based x86 server alternative. Schwartz didn't try to tiptoe around the intended target of its cost cutting campaign, noting that Solaris 10 outperforms any Red Hat benchmark and is the first version of the Unix OS to support Linux workloads natively. He claimed customers have quietly complained about Red Hat's technical support.

"We are targeting Red Hat specifically," said Schwartz at the New York event, outlining the company's next-generation software, server and storage assault designed to slow the spread of Linux. "Linux isn't so free anymore; it's $1,000 per CPU and customers are frustrated by Linux support." Rather than shy away from its Unix heritage, Schwartz instead unleashed a war of words against Red Hat and claimed that Sun's next-generation Solaris significantly outpaces Linux in price and performance as well as multi-platform support and better technical support.He noted that Sun has a unique competitive position against rivals HP, IBM and Dell, as well as Red Hat, because it offers both an operating system and differentiated x86 hardware.

"It's difficult for folks in the hardware only business or folks only in the OS business," Schwartz said, noting that HP and IBM have abandoned the OS business while Red Hat doesn't have control over the hardware.

"We think that [by] bundling hardware with software under a subscription service we now have a material competitive advantage," he added. "The margin on a stand-alone x86 server may ultimately be a negative 20 points, so we think you will need to package software with hardware."

One Sun VAR said the incentives might bring some of Sun's former traditional Wall Street customers and other early adopters of Linux back to Solaris.

"What I'm most excited about is the ability to run native Linux applications on Solaris. It builds bridges for customer who are frustrated with the Linux support situation," said Greg Fearing, vice president of sales for Technologic, a major Sun VAR and iForce partner in Dallas. "And they're taking logical partitioning to the next level. It's pretty cool."Schwartz plugged for AMD Opteron servers but noted that the Solaris 10 OS runs on two-, four- and eight-way x86 boxes -- with more support in the pipeline -- as well as on SPARC servers with more than 100 CPUs. Overall, Sun claimed during the presentation that its x86 server sales were up 94 percent quarter over quarter and almost 300 percent for the year.

"We spent a ton of time on space and heat," Schwartz said, alluding to efforts to reduce data center power consumption and real estate with more powerful servers. "You can consolidate a lot of sprawl in the x86 space."

Sun also promised it would deliver raw computing power "by the drink," as part of a grid computing network to be offered for a limited number of "latency insensitive" applications at a price of $1 per CPU hour. The channel will get to resell this service or be part of the network and have others resell their data center resources.

The company also showed off its "Nautica" application switch, a network-based front end processor for offloading specific loads like SSL security algorithms.

Red Hat Linux cut deeply into Sun's Unix OS franchise on Wall Street over the past five years because Linux runs on commodity x86 servers that are far less expensive than Sun's traditional SPARC-based servers.While it has struggled to respond to the significant market share inroads of Linux, Sun last year finally promised to make its Solaris a better citizen on x86 architecture and signed a major alliance with Intel competitor AMD.

Sun also committed to make available an open source version of Solaris called OpenSolaris later this year, but there's no doubt that the company is prepping its proprietary Unix OS for round two in an effort to re-enlist old customers who adopted Linux.

Schwartz noted during his speech that pundits predicted the demise of Solaris when Microsoft launched its NT operating system nearly 10 years ago, but the company retains an installed base of 3 million Solaris users.

Schwartz pointed to a 10-year truce signed between those once bitter rivals in an effort to help customers solve interoperability issues related to their respective proprietary operating systems. What he did not speak of, however, is Microsoft's role in Sun's long overdue battle cry against Linux this week. "We created a 10-year collaborative framework and it wasn't just about settling litigation," he said. "It's not anti-anything, it's pro-customer moving forward we have to continue offering choice and interoperability not only in Microsoft's world but in the Linux world."

Sun is leveraging its Unix assets more wisely and can be the negative disruptive force to Linux to counter IBM, said George Weiss, a vice president at Garner Group.His colleague added that the company shouldn't promise the Sun if it can't deliver it profitably. "Sun could appeal to the client's pocketbook by offering hardware, software (Linux) plus support at a price that beats the competition," said Robert Igou, a Gartner services analyst. "But Sun needs to be careful that they don't run themselves into more red ink since both hardware and support have real tangible costs associated with delivering them."

Another Sun partner said the company is on the right track by making its Unix OS more palatable in non-SPARC environments. "Solaris 10 is critical to our integration and interoperability efforts where Sun technology mixes with products from other vendors," said Douglas Nassaur, president and CEO of True North Technology, a Sun partner in Alpharetta, Ga.. "These features are concrete examples of the benefit Sun's investment in R&D returns to its customers in the form of a hardened and supported product."

Michael Vizard contributed to this report

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