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Sun Microsystems has launched a new business unit to sell its Sparc processors, a return to an idea it had dropped years ago.
David Yen, currently executive vice president of storage
but previously in charge of Sun's Sparc work, will lead the new group
and retain his executive VP status, the company said Thursday. Jon
Benson, a vice president of engineering who joined Sun through its
acquisition of Storage Technology in 2005, is the new executive VP of
storage.
Sun Microsystems has launched a new business unit to sell its Sparc processors, a return to an idea it had dropped years ago.
David Yen, currently executive vice president of storage
but previously in charge of Sun's Sparc work, will lead the new group
and retain his executive VP status, the company said Thursday. Jon
Benson, a vice president of engineering who joined Sun through its
acquisition of Storage Technology in 2005, is the new executive VP of
storage.
The move is the latest rejiggering of the Santa Clara, Calif.-based company's hardware business.
"It's not just Hollywood that does sequels anymore," said Insight 64 analyst Nathan Brookwood.
In the 1990s, the company's Sun Microelectronics unit sold its chips
internally to Sun itself and externally to others that built servers
around them, but the company eventually retrenched so it was the sole
customer of its Sparc chips.
The move reflects the philosophy of Chief Executive
Jonathan Schwartz, who enjoys seeing Sun technology used in conjunction
with competitors' products. For example, the company often gives higher
commissions to salespeople who sell Sun's Solaris operating system for
use on rivals' servers than for use on its own machines, and the
company has embraced other operating systems on its own servers.
"Sun's innovations have value and appeal beyond our own
servers and storage products," Schwartz said in a statement. "As with
our software, decoupling our silicon from a strict reliance on Sun's
systems raises our profile and opportunity globally."
The bulk of the business will be internal sales to Sun's
server group, Yen said in an interview. Beyond that, the most likely
customers are those with embedded computing systems such as network
gear, where users typically don't see the inner workings of hardware
and software.
"That's the easier market to penetrate," Yen said of
embedded computing, and the company plans to announce external
customers in coming weeks. Even so, "I don't think in the next couple
years we'll come close to the magnitude of internal sales."
Sun Microelectronics also will sell other silicon products
for networking and cryptography, Yen said, as well as some design
services.
The company would like to sell its Sparc chips to other
server makers, Yen said, but that's a tougher nut to crack. Among the
other members of the top four server makers, IBM already has its Power
family of chips, Hewlett-Packard the Intel's Itanium that it
co-developed, and Dell sells only servers using only x86 processors
such as Intel's Xeon and Advanced Micro Devices' Opteron.
Sun's change is mostly one of internal accounting, but
there are some risks, Brookwood said. "The danger here is that they
lose some of that tight coupling" between the system designers and chip
designers, he said. That was a major problem years ago during the
UltraSparc III launch.
Sun's 1990s corporate structure divided the company into
separate business units it called planets, and microelectronics was one
of those planets. But the business unit couldn't sell much outside the
company when Sparc chip performance began lagging competitors'
products, Yen said.
"When the Sparc processor fell significantly behind in performance and features, all bets are off," Yen said.
Sun reorganized with the goal of finding good designs for its server
group. "We believe we have accomplished the first phase," Yen said. Now
it's time to expand to accommodate others' desires. "If all Intel did
is sell to Dell's needs, they probably would not be as successful as
for today's needs," Yen said.
Establishing the Sparc group as separate is designed
in part to assure outside buyers that Sun itself won't have an inside
advantage, Sun said.
Sun has returned to revenue growth and profitability
after years of post-dot-com financial struggles. The company still
faces IBM and HP as strong server competitors, though, and Tuesday's
move indicates the company still is working on finding the right
organizational structure and strategy.
The Sparc group remained separate for some years after Sun
stopped selling the chips externally. But in 2004, shortly after
Schwartz was promoted to chief operating officer, he merged the Sparc chip group led by Yen with the Sparc server group, putting Yen in charge. After Schwartz was named chief executive, he put the entire server group under John Fowler, who earlier had led just the x86 server business, and moved Yen to storage.
Part of Sun's restored fortunes came because its UltraSparc IV+ systems
have enjoyed greater than expected sales at the same time that new
products using the UltraSparc T1 "Niagara" processor
now supply significant revenue. The company plans to release Niagara 2
systems in the second half of 2007 and higher-end cousins using the
"Rock" chip in the second half of 2008.
Texas Instruments builds Sun's chips. Fujitsu also designs
and builds its own Sparc chips, and it and Sun will jointly sell a new
generation in servers called the Advanced Product Line beginning the
first half of 2007.
Another change coming with the new shift is that the new Sun
Fire X4500 "Thumper" system, which combines dual AMD Athlon processors
with as much as 24 terabytes of storage in a compact chassis, is being
moved out of the storage group and into the server group.
Sun has struggled for years to build a strong storage
business, and Tuesday's move indicates another change of course for the
company. Benson will oversee tape and archive products as well as those
that employ storage area networks, a higher end class of networked
storage. Fowler will oversee products involving network-attached
storage.
The storage move fragments Sun's storage work, said
Illuminata analyst John Webster. "Frankly, I'm surprised, and I'm
wondering how they will now present storage as a coherent set of
products," he said.
Read the original article: http://news.zdnet.com/2100-9584_22-6170912.html
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