Sun to Integrate and Open Source Its Software Stack

by Timothy Prickett Morgan

Like a mathematical calculation using Newton's Method, Sun Microsystems has been weaving and bobbing around what ultimately would be its final stance on how it would package and sell software in this century and position itself against much larger competitors. Last week, Sun finally did what, in hindsight, it probably should have done years ago: integrate its entire software stack, open source it, and sell support for enterprise customers who want to use that software in production environments.

The big news had everyone in the IT industry speculating all week, trying to guess what Sun was up to. Vendors, PR agencies, and users I know were guessing all sorts of things, but not one of us guessed what Sun actually announced. My favorite speculation was that Sun would actually exit the software business, which seemed so unlikely. But ironically, Sun has indeed let go of its software and fully embraced a services model like the entire open source Linux stack does. In a sense, Sun has exited the software business as we know it and has entered the software business as it hopes we will come to know it.

To be specific, Sun will integrate the complete Java Enterprise System software stack, its N1 systems management stack, and its Studio compiler tools with its commercial-grade Solaris 10 operating system and create a single, integrated product called the Solaris Enterprise System. And the whole thing will be free of charge. The individual elements of the Solaris Enterprise System, which are already point products. Sun has been selling the components of the Java Enterprise System--Web application servers, directory servers, identity management servers, clustering servers, compilers and application development tools, and so forth--as suites for about 18 months. The full Java Enterprise System included all of these components, and it cost $140 per company employee per year. After getting a huge deal with General Electric a few months ago, Sun has been able to sell nearly 1 million cumulative JES seats, including seats for lower-cost suites that sell for $50 per employee per year and that offer very precise functionality aimed at Web infrastructure, application development, or other areas. With the exception of the Java Application Server, the other elements of the JES stack have been closed source. But with last week's announcements, Sun said that it intended to take the whole JES stack open source as well as give it away for free, just as it has done with the Solaris Unix operating system this year. Customers who were paying to license the JES stack in the past will be paying to get support for the open source JES stack in the future.

But Sun is not going to stop there. Sun just announced plans to integrate the code for the PostgreSQL database into Solaris 10, and the Ingres database and the MySQL database cannot be far behind. Sun has long-since taken its Grid Engine software for creating compute grids open source, but now it will be integrated into the Solaris Enterprise System. The N1 System Manager, which does exactly what its name implies, and the N1 Service Provisioning Manager, which creates Solaris and Linux instances from bare metal and manages Solaris container and Linux container partitions, will both be opened up and the source turned over to "the community," by which Sun surely must mean the OpenSolaris community. The Sun Studio 8 and Sun Studio creator application development tools, the Sun Ray thin client software, and the Secure Global Desktop (which used to be called Tarantella) will also be open sourced as well as integrated into the Solaris Enterprise System. Sun will open source all versions of its software for Solaris, Linux, Windows, and HP-UX. And having done that, if the community wants to make AIX or OS/400 or z/OS versions of the code, the community will be able to do that.

Sun will start rolling out PostgreSQL support in the December snapshot of Solaris 10. About 80 percent of the Sun software stack is available for free download now, and the remainder will be ready for download during the first quarter of 2006. That takes care of the free part. The open source part will take longer. Sun has not said what licensing scheme it will use for this software, but the CDDL license it uses for OpenSolaris seems likely, nor has it provided a timetable for when specific applications will be made open source. If the Solaris to OpenSolaris transition is any guide, it will take some time.

The one thing that has not been open sourced, however, in the Sun stack is Java. Sun is clearly only willing to go so far with this open source concept, and the Java Community Process is the only proof anyone needs that this is true and that Sun does not yet trust the world to be the shepherd of Java. Perhaps that day will come. And while Sun has not yet taken its storage management software and bundled it into the Solaris Enterprise System and made it available open source, the company is committed to do.

According to Jonathan Schwartz, Sun's president and chief operating officer, the decision to open source its entire middleware and systems management stack was driven by the success that Sun has had in reinvigorating interest in the Solaris 10 operating system after giving it away for free in late July and also taking it open source this summer. Since February, Sun has distributed nearly 3.5 million registered licenses of the Solaris 10 operating system, and has in a few short months created a community of 10,000 participants in the OpenSolaris community that is fixing the bugs in Solaris and creating the features for the next rev of that operating system. Of those 10,000 people, only 1,000 of them are from Sun.

Taking products open source, creating communities, giving away compiled code for free, and shifting to a seemingly dubious potential services revenue model might be contrary to what you would think Sun needs to do to get profitable again, but Sun's top brass believes that it needs to build communities, get its products out in the hands of developers in very high volumes, and only then will it be able to charge for services when enterprises take the freebie stuff into production.

Schwartz and John Loiacono, spent the better part of an hour explaining Sun's reasoning behind this in a conference call with the press and Wall Street analysts. Schwartz said that there were two kinds of people in IT, the developers--who don't buy stuff, but rather join communities and use freebie software--and the real IT department managers--who cut the checks and purchase orders for software and who would never in a million years dream of rolling out a solution using open source components that did not offer commercial-grade support. As Sun has done with Java, Grid Engine, OpenOffice, and Solaris 10, it is going to chase the developers first (there are many millions more of them than there are CIOs and VPDPs), and hope this grassroots enthusiasm for its products leads to commercial deployments.

"We are going to be driving for volume first and then figure out how to monetize that volume with services afterward," Schwartz explained. "We have to create a developer opportunity if we ever hope to have a market opportunity." The fact that Sun does not make very much money on software today is the best reason why Sun can get away with this tactic. With Sun's sales already substantially off and minor losses, Wall Street not expecting much in the way of a revenue boost or an improvement in profits, so now is indeed the time for bold experimentation. "If you are not going to pay for software, we would rather that you use our software," said Schwartz. "And we do not have any enterprise customers who will use software and not pay for support. Free and open source software is not about eliminating revenue, but eliminating barriers to revenue." If Sun is right, the upside could be huge. You get a large installed base of open source developers, who are, in effect, your main sales people inside the enterprise.

But, many people thought the same thing about Linux, and Red Hat is not nearly as rich as you might think it would be when it went public in 1999, and Novell is not exactly having an easy time managing the transition from licensed NetWare and a lot of services to free SUSE Linux and a lot of services for its revenues. This is not an easy financial trick to pull off. But it is just about the only reasonable thing that Sun could do, if you think about it. Sun clearly cannot build an end user customer base fast enough to take on Windows and Linux with Solaris and take on the open source and closed source application development and middleware vendors with JES by having closed source, licensed code. So Sun is being realistic in this regard.

While Sun is making its software stack available as open source projects free of charge that does not mean it will stop selling software licenses if customers want to consume commercial versions of the software that way as well as selling support for the open source programs. Schwartz said he expected some customers would still want to use CPU-based pricing or employee-based licensing because that is what they are comfortable with. Software running on grid utilities will be priced based on the number of hours that the software is used.

The question now is: When will Sun do the same thing for hardware, as it has been experimenting with for quite some time? The answer that the smart-aleck, young guns at Sun would undoubtedly quip is that Sun already does this, through the Sun Compute Grid and the Sun Storage Grid. However, only a select few people can actually buy capacity on the grid. Sun's own customers, who will build the server utilities that we can actually buy capacity on (some day) have not built large compute utilities, and there is not yet a means to buy and sell capacity like electricity or pork bellies. Sun's vision for hardware as a service is bold, to be sure. But it is a product that only the select few--mostly big banks and HPC customers--can buy right now. Moreover, some customers want to pay for servers as a service, but they only want one machine or they want to have them in their own facilities. Sun has experimented with such pricing on hardware for developers, but has yet to go commercial with it.