Sun Merges Server Units, Taps Key Exec for Storage

Published: May 18, 2006

by Timothy Prickett Morgan

It has only been a few weeks since Jonathan Schwartz was named as chief executive officer at Sun Microsystems, and true to his word, he is already beginning to make changes. This week, Sun announced that it was merging its two server units and moving one of its key server executives over to take the top job running its storage business.

While this past April was somewhat tumultuous in that Scott McNealy, one of Sun's founders and its chairman and chief executive since it was founded more than two decades ago, stepped down as CEO and Sun's board gave the job to Schwartz, this is nothing compared to the upheaval that Sun was going through two years ago when Sun's president, Ed Zander, left the company, Schwartz was named president, and Sun killed off a bunch of Sparc projects and, in hindsight, was gearing up to go full-bore with Opteron-based machines. During that reorganization, David Yen, who had been managing the development of Sun's Sparc processors and who pulled the plug on the future, monolithic "Millennium" UltraSparc-V processors, became the manager of Sun's Scalable Systems Group, which merged Sparc chip development and Sparc servers into a single unit, while John Fowler, who had been the company's chief technology officer for a number of years, was given the job of running Sun's Network Systems Group, which was dedicated to X86 and Opteron platforms.

In the past, Sun had a chip unit that made Sparc chips, an Enterprise Systems unit that sold big Sparc boxes, and a Volume Products unit that sold low-powered Sparc servers and X86 machines. After that reorganization, Yen got Sun focused on getting the dual-core UltraSparc-IV and UltraSparc-IV+ chips out the door, and put a lot of effort into the power-efficient "Niagara" T1 processors, which came to market earlier this year and are the foundation of the future "Rock" massively multithreaded chips that are the key to Sun's future in the heart of the data center. Fowler has been fortunate in getting Sun founder Andy Bechtolsheim back on board designing the "Galaxy" line of Opteron servers, which are among the most power-efficient and dense machines out there in X64 land.

After the reorganization this week, Fowler is now the executive vice president in charge of a unified server group, called the Systems Group, which will steer the future Niagara-II and Rock Sparc chip development and the servers that use them; manage the APL partnership with Fujitsu; and continue to work with Advanced Micro Devices to create Opteron-based servers.

And as scary as this may sound to a lot of Sun insiders, Yen is not involved in Sparc chip or server development, but is now the executive vice president of Sun's newly christened Storage Group. Mark Canepa, who has been at Sun for a decade and who was running its storage business before and after the acquisition of StorageTek last year, has left the company "to pursue other interests." A Sun spokesperson was unable to comment on what Canepa's plans were, but said it was his decision to leave.

While Schwartz said he would not wait until after Sun's fiscal year ended in June to start making changes, the merger of the two server units and the executive changes do not appear to be immediately motivated by a desire to make drastic budget or employee cuts in these units. Both executives are well-liked by Sun employees in general and by one in particular: Schwartz, who they continue to directly report to. If changes come in terms of budgets and headcount, they were going to come without these executive changes and without the merging of the two server units. "Sun periodically assess our workforce requirements against the needs of the company and our clients," a Sun spokesperson explained. "We continue to evaluate critical business needs and to look for opportunities to realign skills and resources to meet those needs."

Having heard that, it is still hard to imagine that the merging of two server units will not involve at least some redundancies and reassignments (beyond the 200 layoffs that the former Scalable Systems Group announced a few weeks ago), even if this is more about getting Sun's server designs and parts supply chains unified.

You will have to interpret Schwartz's corpospeak and make up your own mind. "Amplifying the outstanding performance of our UltraSparc and X64 systems and the growing momentum behind Sun's storage offerings, now's the time to accelerate growth, and leverage efficiencies," he said in a statement. "We see alignment and acceleration opportunities in combining our systems efforts. Bringing the two organizations together allows us to leverage the best of our industry standard supply chain to fuel Sun's ability to capture the global opportunity to deliver the fastest, and most energy efficient systems on earth." He then went on to say that both "John and David have proven to be 'A' players at Sun and are ready for new and exciting challenges."

Sun has already merged its sales and services units under Don Gratham, executive vice president of the Global Sales and Services unit, and appointed Greg Papadopoulos as chief technology officer and executive vice president of research and development. Just last week, Rich Green was brought back into Sun to be executive vice president of its Software Group, and Michael Lehman was brought in a few weeks ago to return to the top post as chief financial officer. It would be too simple to say that this is the beginning of the Schwartz era, since that really happened in April 2004. We just didn't know it as such back then.

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