Sun, Intel Form Alliance for Xeon Servers and Workstations

Published: January 25, 2007

by Timothy Prickett Morgan

Last week, executives at Sun Microsystems hinted at the release of the 11/06 update for Solaris 10 that it would be forming partnerships with various OEM partners to get Solaris more broadly supported by the vendor community. And this week, Sun announced a broad alliance with Intel, which will see the chip maker endorse Solaris as a tier one platform and Sun make Xeon-based servers and workstations, Sun is showing that it is dead serious about cranking up Solaris adoption and getting a higher-volume X64 server business.

Most likely thanks to the long-time and sensible guidance of president and chief executive officer, Jonathan Schwartz, Sun has adopted a strategy of seeing volumes, which in turn should yield profits for the company. Having lost its profit engine from the dot-com boom days, when Sun executives antagonized Intel, Microsoft, IBM, and any other competitor and belittled just about all of the technology they brought to market, a humbled Sun with a largely new management team has spent the past few years burying hatchets.

First, Sun inked a landmark settlement concerning Java and operating systems with Microsoft back in April 2004, which killed off an antitrust lawsuit concerning Java and put the two vendors to work collaborating on the interoperability of their respective Solaris and Windows platforms; Sun was also allowed to sell Windows on its servers. Then, in June 2005, IBM and Sun inked a 10-year Java pact, meaning that IBM, which strongly wanted Solaris to go open source, was appeased. Late last year, Sun began the process of taking Java open source, and clearly IBM must have known this was coming to have signed that deal.

The deal with Intel announced this week will put Intel's Xeon processors, based on the new Core architecture and sporting two or four processor cores per socket these days, right alongside the dual-core Opteron processors from Advanced Micro Devices. While Sun has sold X86 servers before--by virtue of the acquisition of Cobalt Networks in 2000--and brought in two Opteron-based servers from Newisys that it sold half-heartedly for a year, the "Galaxy" line of servers, announced 18 months ago using AMD chips, are arguably the company's first credible line of X86 or X64 products. And it is not a coincidence that Sun is getting its first traction in the X64 server market--sales were at a $500 million annual run rate at the close of calendar 2006 and growing smartly--right now, since it has delivered real engineering in the Galaxy products.

While this is all well and good, the fact remains that Intel is the volume leader in the X64 market, and it has much deeper pockets than either Sun or AMD do to do marketing--which is a major force in the success of the X86 and now X64 platform in the data center for the past decade. The reason why so much advertising and marketing in the server space from IBM, Hewlett-Packard, Dell, and others peddles X64 solutions is that, behind the scenes, Intel's co-marketing dollars are footing the bill. And if Sun wants to catch Dell in the X64 server market, it is going to need Intel's marketing muscle to help make that happen.

It never hurts, of course, to have a second supplier of chip technology, which certainly knows as a maker of its own Sparc chips, which often have design delays from Sun and supply delays from its fab partner, Texas Instruments. This has been particularly true in the past 12 months for Sun's Galaxy line. The delays that AMD had in getting the dual-core Rev F "Santa Rosa" Opteron chips to market meant that Sun had to re-engineer some of its Galaxy servers for the earlier Rev E chips, and then turn around and re-announce them with the Rev F chips. And now, Intel has its quad-core "Clovertown" Xeon DP chips out, which put two whole "Woodcrest" Xeon DP chips in a single CPU package, while AMD will not have its real quad-core "Barcelona" Opteron chips to market until this summer--and that is if there are no delays.

Like IBM and HP, which sell both Xeon and Opteron products in the volume server lines, Sun needs to be able to do the same thing. So the Sun-Intel deal was absolutely no surprise on that front. The fact that Intel has got its chip roadmap in order in the past two years and is delivering products that are competitive with Opterons based on thermal and performance profiles, made it inevitable. Still, it is a dash of cold water on the face of AMD, which had Sun selling Opterons in its X64 servers on an exclusive basis until now.

Schwartz made the announcement of the deal in San Francisco with Intel's president and CEO, Paul Otellini, who has been revamping Intel much as Schwartz has been revamping Sun. Schwartz said that one of the first phone calls that he made when he took over Sun last April was to Otellini, who did shuttle diplomacy to the fine restaurants in the Bay Area to discuss how Sun and Intel could work together. "The more we talked, the more we discovered how similarly we viewed the market," explained Schwartz. "It is evident that customers wanted us to work together."

Given the volume of Solaris 10 shipments in the past two years--close to 7 million units have shipped--and the fact that around 70 percent of those Solaris downloads were on X86 and X64 servers, Intel was keen on surfing on such volume. Sun needs from Intel what it has from AMD: early information on hardware features coming in future chips so it can tune Solaris, Java, and other software to better support it. It also needs to get those co-marketing dollars and get Intel pushing Solaris alongside Windows and Linux, the two key platforms that Intel helps support both directly and indirectly. Sun needs to support Intel chips because it needs to have a broader product line, one that can compete chip-for-chip with those from IBM, HP, Dell, and others. And this deal is not just about Solaris, either. "This just opens yet more opportunity--and not just for Solaris, but for Windows and Linux," said Schwartz.

Under the deal, Sun's hardware, operating system, middleware, and programming language engineers will collaborate with hardware and software engineers from Intel. "We want Solaris to scream on Xeon, to absolutely blow away everything else in the market," said Schwartz.

Both Otellini and Schwartz mentioned several times in the announcement that the fact that Sun owned its server platform and the operating system gave it advantages over other suppliers, who just made servers or just made operating systems. While having control of the server architecture and the OS are key, Sun is certainly not the only vendor in this position--even if it is the only one in the X64 server market. IBM controls the entire stack--Power chip, server, and operating system--with its System p5 servers, which run the AIX Unix variant, and its System i5 boxes, which run i5/OS. Similarly, HP controls the server design and the HP-UX and OpenVMS platforms. Having control of the chip and the operating system is perhaps more important than anything--and only IBM has that control, unless HP merges with AMD or Intel some day or Microsoft decides to. (You heard it here first.)

"This is not just a buy-sell deal," explained Otellini. "Solaris is evolving as a mainstream operating system. And now we have the opportunity to be inside Sun boxes." Otellini referred to Sun as the strategic, mission critical Unix for Xeon processors, being very careful not to snub HP and its HP-UX for Itanium processors. HP-UX does not run on Xeon chips, and this partnership with Sun could possibly encourage HP to rethink this strategy. By having HP-UX solely on Itanium, HP is a victim of the timetables for Itanium chip deliveries and has no second source for processors. This is always a bad idea for a server platform, which is why all of the major vendors that sell AMD chips in servers also sell Intel chips in them and visa versa.

Sun was vague about when it would actually get Galaxy machines out the door using Intel Xeons, but it is expected to get a two-socket box out the door by late in the first half of 2007, according to John Fowler, general manager of Sun's Systems Group. Sun is eventually expected to deliver single-socket, four-socket, and eight-socket servers to the market, spanning a performance range that it offers with the Opteron-based Galaxy line. Sun said nothing about when Xeon-based workstations might appear, except that they would at some point.

The warming of relationships between Sun and Intel will probably not see Solaris revived on the Itanium platform. While Sun probably doesn't want to be reminded of it, in the late 1990s, the company jumped on the Itanium bandwagon and promised to deliver Solaris on Itanium, and when Itanium was much-delayed and under-powered, Itanium bashing became a popular marketing tactic at Sun. "I think that it would be the wrong thing to do to open up the religious war on Itanium," said Otellini. "Sun doesn't support Solaris today, but we would love it if they did. But that is their business decision."

Schwartz was mum on the Itanium subject, as you might expect. Earlier in the announcement, he did acknowledge that Sun and Intel had not exactly been best buddies for the past several years. "We have had an ebb and flow in our relationship over the years, and in the past six months, we have only seen flow--and we want to keep that going," he said.

The obvious question about this deal is how much it hurts AMD. If you believe that being solely on the Opteron chips limited Sun's Galaxy server sales, then Sun could significantly expand its presence in the X64 market. This is not a credible argument. Sun sells fewer X64 servers because it is the new kid on the block and because it does not have the same channel or customer bases that IBM, HP, and Dell have. And adding Intel chips won't change that overnight. But if Sun and Intel together start building up a channel of Galaxy server resellers and getting Solaris certified on more hardware, then the Galaxy line can do better than it is currently doing.

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