Why Sun cares about software

Sun has started to put some flesh on the bones of its previously skinny internet services strategy. Over the past few months the company has been slowly stockpiling resources.

The purchase of the Star Office suite, the Sun-Netscape iPlanet alliance and the acquisition of peer-to-peer software company InfraSearch are all part of plans to add infrastructure software to its servers.

Clive Longbottom, director at analyst house Quo Circa, said: "Sun has a lot of Solaris servers in the market but it can't rest on its laurels. Sun's Solaris [operating system] is big - not as an application server but as a basic platform, especially for billing in telcos."

Indeed, Cap Gemini has recommended its internet and telco clients use Solaris for customer care, billing and ecommerce. The consultancy set up centres in California, France and Singapore with a view to aiding and abetting this after a successful pilot in Holland.

To compete with its rivals, Sun has to offer what are now generically called e-services. Competition in the hardware arena - especially when it comes to what it offers, namely Unix-based systems - is getting tougher. A month ago the company declared war by releasing a Unix machine for less than $1,000 in the shape of the Blade 100.

Demand is also slowing as companies who stockpiled servers for Y2K find they now have enough capacity, and failing dot-coms have clogged the market with second-hand hardware. Industry watchers estimate the backlog will take until 2002 to clear.

However, in the internet era customers expect more for their money.

"For Sun it is a case of not wanting to stop selling servers. The problem is that their hardware is a really big neat box but then there are other vendors selling boxes just as big but cheaper and with infrastructure," said Longbottom.

With their hands tied, Sun has little choice but to jump on the software bandwagon.

Sun's attitude to its internet services is vastly different to Microsoft's. For starters, it doesn't have to work so hard to get the product into data centres because it is known for scalable systems and can bundle software with its hardware.

Essential to all this is Sun ONE, the recently announced Open Net Environment that comprises some new Java APIs (Application Programming Interfaces) and which allow the programming language to communicate with XML-based documents. The strategy relies on iPlanet, Sun's alliance with Netscape. iPlanet's product line is continuing to expand with the latest update offering a web server and applications servers.

According to Forrester Research, iPlanet's Application server is ranked first above IBM's WebSphere Advanced edition and Microsoft's Windows 2000 server.

Mat Hanrahan, analyst at Bloor Research, has high hopes for Sun.

"Microsoft has started at the bottom with its e-services and will have to work its way up. But Sun is already the Unix platform of choice and has to move into software services," he said.

This is not to say that Microsoft has to get into hardware. The point is that Sun has the attention of the engineers that matter in the development world because of the company's long standing position in the datacentre market.

Sun will have to use all this might in the services space to push its Sun ONE offerings. It is not just a case of convincing existing users but also tempting new ones.

As part of this effort, customers can expect to see open standards-based technology from Sun. There are open APIs and tools based on SOAP, J2EE, XML and UDDI. If it ain't open, it ain't in - that's the mantra. And that's a surefire way to win support and make friends, if it holds true.

However, Sun is keen to stress it is not simply repackaging existing products nor does it have any ambitions to compete head on with Microsoft in the software space.

Nancy Lee, product line manager for Sun ONE at Sun Microsystems, said: "Sun ONE is a building block for service providers and ISVs to innovate with and build their own services. We don't want to be in the software business. We want to be in the business of selling servers and providing a software infrastruture."

But opinion is divided as to the degree of success Sun will have with this strategy.

Some analysts believe the new software initiative won't be profitable in itself, but Sun won't care as long as it means more boxes are sold as a result. Others believe Sun needs to be known for its software infrastructure efforts.

Either way, it's certainly a big step for the company.