Sun sets sights on low-cost computing, offers Red Hat on servers

Sun on Monday made a bid for the fast-growing low end of the server market, rolling out two low-cost Intel-based boxes and announcing an expanded relationship with Oracle to support Oracle products on Sparc, x86 and Linux systems.

The move is a departure for Sun, which has built its business on selling higher-end systems based on its proprietary Sparc microprocessors and running its version of the Unix operating system, Solaris. The company, however, has seen enterprise customers move away from its products in search of lower cost Intel-based systems, analysts say.

"I believe this could be a significant turning point for Sun in that they need to make a strong position in the x86 market," says Jamie Gruener, senior analyst at the Yankee Group.

Oracle CEO Larry Ellison joined Sun CEO Scott McNealy on Monday where McNealy stressed Sun's commitment to low-cost computing. The two companies plan to roll out a consolidation program in the upcoming fiscal year to help customers use joint Sun-Oracle platforms to get better use of their computing resources.

"Everybody is looking for lower cost ways of building their computing environment and we understand," McNealy said. "It's all about cost and when you look at what we're offering here we really are delivering a cost-effective model."

Analysts note that Sun is playing catch up with HP, IBM and Dell, which have long focused on delivering low cost Intel-based boxes. In fact, Ellison joined Dell CEO Michael Dell at an event last month to talk about their partnership to sell clustered server systems based on low-cost standard architectures.

McNealy conceded that Sun "didn't exactly jump on the 32-bit low cost computing bandwagon early, but we've jumped on it big now. The other thing we kind of waffled on, and I admit it, was Solaris x86."

Hoping to make up for that, McNealy took the wraps off two rack-optimized x86-based servers, the Sun Fire V60x (AUD$4,350) and V65x (AUD$4,750). Sun says the boxes -- which include 2.8 or 3.06 GHz Xeon processors, six PCI-X slots and support for up to 12G bytes of memory -- are ideal for Web serving, firewalls, workgroup or database servers, or for high performance compute clustering. The boxes will run both Solaris and Linux.

Sun's x86 product line also includes the LX50, with the base configuration of that system starting at AUD$2,950, and the company says it will soon release x86 blade servers.

McNealy also announced support for Oracle applications across its product lines. The two companies are working together to enable automated deployment of Oracle in N1 data centers, incorporating the Oracle database as the data store for those deployments, the company says. N1 is Sun's version of utility computing, designed to help companies manage and use computing resources more efficiently. The companies also stressed their focus on supporting Oracle 9i database software across Sun database clusters.

Also Monday, McNealy announced that Sun has entered into an agreement with Red Hat to distribute Red Hat's Enterprise Linux operating system. Last month, Sun ended its own branded Linux distribution. As part of the agreement, Red Hat will distribute Sun's Java Virtual Machine with Red Hat Enterprise Linux.

"Now you've got low end servers that run Solaris using industry standard technology and running Linux and Oracle," says Vernon Turner, group vice president of IDC's Global Enterprise Server Solutions. "So it makes it really difficult to differentiate them from all the other standard x86 players if, indeed, it is just a hardware sale. That's what [Sun] wanted to do because now they can layer in their services."

What Sun is hoping, analysts say, is that its installed customer base will opt to move to Sun's x86 offerings rather than move onto platforms from other vendors.

"It's about one throat to choke. If you have Sun equipment in place already you can leverage that to create a broader, standardized approach," says Gruener of the Yankee Group. "Previously, you would have had to have a separate set of products from other Intel vendors."

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