NEC Strengthens Ties to Sun, But Is Still Tight with HP

by Timothy Prickett Morgan

Japanese server maker NEC and American server maker Sun Microsystems announced this week that they expanded their partnership on the Solaris platform and for the interoperability of their respective middleware stacks. The expansion of this partnership might have come as a surprise, since not too many people were aware that NEC and Sun had a partnership to expand.

As it turns out, NEC has been quietly reselling Sun's Sparc/Solaris platforms in Asia since 2000, when Sparc was the platform of choice among dot-coms, telecoms, and financial services firms. According to Brian Sutphin, executive vice president of corporate development and alliances at Sun, NEC has the right to sell the entire Sun server portfolio, but has thus far concentrated on selling enterprise-class Sparc-based Enterprise and Sun Fire servers--often embedded in an integrated system and often with a label other than Sun's on the resulting boxes. According to Gartner, NEC had a $102 million Unix server business in 2004, which was comprised of Sun servers as well as Unix boxes it resells from Hewlett-Packard. That Unix server business was down 45 percent from the $188 million level NEC hit in 2003, but sales were rebounding a bit in the fourth quarter of last year. Nonetheless, it is clear that NEC wants to do a better job of leveraging whatever momentum Solaris 10 will bring to boost its own Unix server sales.

NEC has been a long-time contributor to the development of the HP-UX Unix environment--along with rival Hitachi, NEC helped HP by bringing its mainframe experience to bear on HP-UX to help boost the reliability features of HP-UX 10 and 11i, for instance. According to an NEC spokesperson, the deal with Sun does not in any way mean NEC is moving away from its commitment to resell PA-RISC and Itanium servers from HP. (Because of the secretive nature of Japanese companies, it is unclear if HP-UX is certified to run on the "Asama" Express5800 32-way Itanium servers, which overlap in performance and features with HP's own Itanium-based Integrity Superdome servers.

Sun is trying to get in NEC's good graces by not competing against NEC in the lucrative systems integration business in Japan and the rest of Asia. This is not about products so much as profits. NEC said at its announcement in Japan on Tuesday that it would be doubling its Solaris-based systems integration business to around $275 million in the next two to three years. The expanded alliance between NEC and Sun has already resulting in NEC's Valumoware middleware stack being ported to and tuned for Solaris 10, and equally importantly, being certified to be interoperable with elements of Sun's own Java Enterprise System middleware stack. This way, explained Sutphin, NEC's customers would pick and choose between Valumoware and JES and mix and match as they please to build their applications and infrastructure.

While money has not changed hands between NEC and Sun as part of this alliance expansion, the two have agreed to commit resources in three competency centers in Japan and to also dedicate sales personnel at both companies to push combined solutions. While NEC will act as the main contractor in systems integration deals involving Sun hardware and software technology, the two will be going to market together and Sun will most definitely get a cut of the action, according to Sutphin. The companies will also support NEC's Multimedia Information Platform (NEMIP) on Solaris and sell it into Europe and Asia; NEC also said that it will port its Open Mission Critical System (OMCS), one of the key components of the Valumoware suite, to Solaris so it can sell it in Japan and elsewhere. The companies have also recently created a call center solution based on NEC's IP telephony software, called Univerge/SV, and Sun's Sun Ray thin clients.

What seems unclear is what NEC will do with Sun's future "Galaxy" Opteron-based servers. Right now, NEC does not resell the Sun Fire V20z or V40z Opteron servers, running either Solaris or Linux. But Sun's Sutphin said that because of NEC's extensive experience with 64-bit operating system and doing ports, it could be helpful in helping Sun and other application providers in the Solaris market port their applications to 64-bit X86 processors, whether they came from Intel Corp or Advanced Micro Devices. A spokesperson in NEC's Tokyo headquarters said that the company has no firm plans to sell the Galaxy machines, but at this point if NEC did, it would be on a case-by-case basis. Right now, this is just a topic of discussion more than anything else--which stands to reason, since Sun is late in delivering them to the market.