Sun Microsystems chairman and CEO Scott McNealy defended his company's open source track record in an occasionally raucous meeting with members of the Canadian press recently.

McNealy, visiting customers and the press in Toronto on Nov. 5, bristled at the suggestion that Sun was pressured into making its latest version of the Solaris operating system (OS) available to open source developers.

"Pressure? It fascinates me how people think the world operates, that I'm some sort of politician running for office. There are absolute legal issues," McNealy said, pointing out that Sun had to rid the OS of some proprietary code before open sourcing it.

On Nov. 15 Sun plans to unveil Solaris 10, the first example of the OS to be available on an open-source basis. It features technology called Dynamic Tracing (DTrace), a way for administrators to tweak the platform for maximum performance. Solaris 10 also sports "containers" that isolate applications for further performance improvement, and a new TCP/IP stack that Sun says provides efficient communication processing.

McNealy said Solaris 10 is merely the latest in a long line of Sun contributions to the open source crowd.

"We're the number-one donator of code to the open source community on the planet," McNealy said. "To say that we need to be pressured -- we invented open source, gang. That's a little Al Gore-ish. The number one donator of open source code is (University of California) Berkeley. Know where all that came from? (Former Sun chief scientist) Bill Joy, who invented open source while at Berkeley with the BSD licence. We were the Red Hat of Berkeley Unix before Linus Torvalds was out of diapers."

McNealy took IBM to task for high OS operating costs. He said Sun could offer Solaris 10 at a price of US$1 per CPU, per hour -- customers would pay just a greenback for 60 minutes of access to the platform.

"IBM has...300,000 employees and they're hiring more," McNealy said, explaining why he thinks Big Blue can't match Sun's metric. "Where's their dollar per CPU-hour? They can't do it, because they're at more than a dollar per CPU-hour just in pension costs."

McNealy said Sun would offer Solaris containers in an application service provider (ASP) model, whereby the company serves up the OS packages via a data center, and enterprises would access the containers online.

The data center is an "N1" environment. N1 is Sun's server load-balancing and virtualization model that aims to improve server utilization rates. Industry analysts have said most servers operate at just 15 per cent of their capacity. Servers in an N1 environment can at 80 per cent, according to Sun.

McNealy said the ASP Solaris model is temporary, merely a way to "irritate the market" in the hopes of convincing service providers like Bell Canada and Telus to create their own N1 data centers and serve up Solaris containers. So far not one Canadian service provider has signed on.

"Finally we said, 'Screw it. We're gonna do it,'" McNealy said, adding that Sun is talking to Canuck telcos to bring them online with the N1-Solaris plan.

Sun's goal is to become less of a front-line tech provider and more of a background operator, McNealy said, likening his firm's future to the way certain other gear makers do business. "Nobody chooses Lucent or Nortel or Alcatel as your switch environment. You just sign up. You don't know what's on the back end."

Sun has faced problems recently. In April the company recorded a US$760 million loss for Q3 2004. The company laid off 3,500 employees. Sun ousted Neil Knox, the executive vice-president of low-end servers, Clark Masters, executive vice-president of high-end servers, and Mark Tolliver, chief strategy and marketing officer.

Things got better in the fourth quarter as Sun landed US$795 million in the black, but in October the company recorded a US$174 million loss for Q1 2005.

McNealy put a positive spin on the most recent numbers, pointing out that Sun has US$7.4 billion in the bank, and Q1 would have been profitable if not for unusual charges, such as a US$92 million check written to Eastman Kodak to settle a court case.

"The company's doing great -- growing the last couple of quarters, the last two in a row," McNealy said. "That feels really good. It's been a while since I've been able to say that. Revenue growth does solve problems a lot easier than trying to cost-cut your way."