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Sun Merges Storage Back into Systems Group

Published: October 1, 2007

by Timothy Prickett Morgan

The top brass at Sun Microsystems are still rejiggering the organization to get a different alignment for its products. Today, Jonathan Schwartz, the company's president and chief executive officer, announced in his blog that Sun was going to merge its server and storage groups into a single Systems group, reflecting the view of Sun's techies and its CEO that servers, storage, and networking are converging.

Vendors combine business units or tear them apart because organizational change sometimes fosters innovation, which is made possible by isolation or collaboration. (Both are important, and if a company has tried one and it doesn't work, it often tries the other.) Sometimes, vendors are just trying to figure out how to sweep some bad market share numbers under the rug. (If you mix a business that is performing well with a business that isn't, the news doesn't look so bad. Then again, it also doesn’t look as good, either, for the unit that is doing well.) Or in other cases, they changed differentiation (and reflect it in their organizational charts) based on customer size or product size to some other orientation.

Sun used to have an entry and midrange Sparc server business and a high-end Sparc business, and when it first got into X86 servers seven years ago, it eventually created an X86 unit. And when the Sparc business went on the rocks in 2001 and Sun's Sparc processor roadmap had to be rewritten because of delays and changes in the market, Sun eventually created an entry systems division, which merged low-end Sparc and X86 servers into one line (Network Systems), and midrange and high-end Sparc products (Enterprise Systems) into another line. Sun's storage business, which was a series of arrays powered largely through acquisitions (Encore being the main one) as well as OEMed products from EMC, LSI Logic, and Hitachi, among others. Several years ago, Sun moved its Sparc chip business into the high-end server line, then this year in March, Sun broke the chip unit free again and at the same time created a single Systems unit that was under control of John Fowler, executive vice president and general manager of that unit. (Fowler was tapped to run the original X86 server business in the wake of the Cobalt acquisition and then ran its Network Systems unit.)

Today, Fowler is now taking over responsibility for servers and storage. Jon Benson, a long-time StorageTek executive who was formerly the vice president of tape engineering at STK, was named senior vice president of Sun's storage business in March. At that time, Sparc unit was broke free and put under control of David Yen, Sun's top chip guru who had been running its high-end Sparc business and then was moved to storage in the wake of the STK acquisition. After all the dust settles, Fowler has control of marketing and engineering for servers, storage, and related networking gear, and Benson reports to Fowler. The executives who have been running sales and services for Sun's storage business stay in their places and still report to Benson.

The change is not a big deal, but it does reflect what Schwartz has been saying for a while. The Galaxy and Niagara servers designed by Andy Bechtolsheim (one of Sun's founders who returned to the company a number of years ago and is largely responsible for the very good designs in these boxes) are really network and storage devices as much as they are servers. The Thumper X4500 storage server is an element in an integrated, high-end network system that Bechtolsheim has created called the Constellation System. The system also includes X64-based Galaxy rack and blade servers, Sun's Solaris operating system and its ZFS file system, and a massive InfiniBand switch called Magnum.

"So we'll still be strongly focused on being a multi-platform storage provider (just as our servers run multiple operating systems, and our operating system runs on every vendor's servers), but we're also going to start talking at a higher level to customers that see more standardization and integration in their future datacenters," Schwartz explained in his blog posting. "That's not everyone, but it's definitely a trend we're going to accelerate (and again, that's what virtualization portends)."

Having spent $4.1 billion to acquire StorageTek, Sun doesn't want to have Wall Street think that it doesn't still believe in tape, so Schwartz threw tape a bone in his blog post. To be sure, tape is important, and an ecologically sound choice for archiving. But tape is essentially boring, even if it is useful and necessary. The stuff that Bechtolsheim is cooking up in the labs is all about network bandwidth and virtualizing servers and storage. This is where the action and the money in IT are these days. And while Sun is boasting that its Thumper disk arrays are now selling at a $100 million annual run rate after only two quarters of sales, Sun should have a multi-billion storage hardware and software business based on its relative strength in servers, and it never has. Sun's most successful storage products were made by others. Thumper and ZFS are going to have to be widely adopted for Sun to truly have a large and growing storage business, and right now, Sun is contracting. By some measures, quite dramatically.

With so many changes at Sun, the next obvious move is to take the word "micro" out of its Sun Microsystems name. And while you are at it, you might as well remove "Sun," since Stanford University Network has no meaning, and replace it with "Network." And finally, add the word Constellation, since Constellation Network Systems is probably a more accurate name for the future Sun is charting for converged devices and its future revenue streams.