Source: Finextra Research
During an hour-long presentation to more than 100 financial institution customers and analysts earlier this week, Sun Microsystems president and COO Jonathan Schwartz acknowledged that his firm had failed to meet customer demands for continuous innovation in price-performance, in the process gifting its prized financial markets franchise to deep discounters and open source acolytes.
"You came knocking and we didn't listen," he said. "You said Sun is proprietary and expensive, and we declined year over year for a few years."
At its peak, Sun derived 30% to 35% of its revenue from financial services. Now the number is near 21% as customers have moved towards Linux environments. The vendor’s bid to reverse this decline began in earnest on Tuesday, with a host of announcements specifically geared to re-engaging with its oldest, most demanding customer segment.
Irreverent UK computerwire The Register headlined the event ‘Sun does Dancing Bear act for Wall Street’, as Schwartz prostrated himself before Manhattan’s masters of the universe. Sun preferred to bill the blitz of presentations and new initiatives as ‘Sun takes back Wall Street’.
Describing Wall Street as the swamp from which Sun was spawned, Schwartz said: “This is the place we believe we need to return to grow…What we've been doing for the past few years is getting back to our roots so we can deliver real systems innovation to you.”
Sun has pulled back from its isolationist stance, he said, pointing out that Solaris 9 is now certified on 249 different x86 systems, and has once again begun to focus on systems performance. Solaris 10, which will ship by year end, features dynamic tracing, N1 grid containers and trusted Solaris and promises "extreme performance” said Schwartz, reeling off benchmarking stats which showed Solaris 10 on Opteron and Xeon servers comprehensively outgunning Red Hat Linux on the equivalent boxes.
Sun is also tempting the market with bottom-line incentives, offering Solaris to Red Hat customers at half price if they trade up to Solaris 9, and promising big discounts to Xeon server customers who buy Sun's Opteron boxes, too.
And for those no longer interested in building and operating their own infrastructure, Schwartz outlined plans to sell computing capacity for $1 per hour per CPU. Under these proposals, banks could farm out their heavy-duty programming to a virtual utility running Sun’s N1 computing grids.
Said Schwartz: "What Salesforce.com does for sales force automation and eBay does for auctions, we are planning on doing for technology infrastructure."
It may already be too late for Sun to reclaim its pre-eminent position on Wall Street's desktops and server farms, but this latter offering holds out the prospect of a new vision and a new beginning for the beleagured vendor.
The utility model is a reversal of Sun’s traditional business focus, and will take time to build, but it plays well to today’s cost-conscious CIO. It also opens the door to services, which, in an era of commoditised computing, is surely where the future lies.