Sun CEO On Razors And Blades

Kadin2048 writes "In an interview with BusinessWeek online, Sun Microsystems CEO Scott McNealy sheds some light on the company's new business model and future direction. In particular, he said that Sun's recent open source moves were part of a new strategy, where 'The software is the razor. The razor blades are the servers.' The move was called a huge risk by BusinessWeek, and it would put Sun at odds with the more traditional Microsoft-esque model with high per-seat or per-server software licensing costs and use commodity PCs and servers, which may not go over well with investors. But after having seen its stock slide and users flee for Linux and Windows, they arguably have little to lose. Perhaps the most interesting development to Slashdot readers is that in an effort to draw new developers to the platform, Sun is offering a deal that seems torn from a cell-phone company playbook: offering a "free" Ultra 20 Opteron workstation if you sign up for a $29.95/mo, 3-year service contract."

Re:a free WHAT?

[tomhudson]

That's per month, not per year.

Still a half-decent deal.

The future?

[protohiro1]

This is definetly what apple does in the consumer space. The cost of selling additional copies of software is zerom but hardware costs a certain minimum amount. If anything makes sense as a loss leader it is software that won't lose you more money the more you sell. Then of course your value proposition becomes hardware quality. Your hardware is better, it costs more (higher margin). So far this is working for apple.

Tomorrow, new Sun Fire Niagara with 8-core T1 CPU

[postbigbang]

This goes further into the model proposed by the post: 8-cores in the CPU (one FPU for the eight) and 32 discrete threads, all in a 2U server box. This is based on UltraSparc, but there's Solaris 10, and the port of gcc to it for seductive app transfer. The whole idea is a hardware play.

It makes me wonder why there must always be this gulf between hardware and software vendors. The most successful models meld them together handsomely into devices like iPods, mobile/pda devices, etc. This thick-thin shift is so insane. At the end of the day, we just want to do work, entertainment, and something useful with the devices we buy, and the location of what's going on is increasingly irrelevant. But perhpas this is what (F)OSS software will get for us, an army of coders coupled to an army of blade vendors, with dumb devices at the edge.

Nice, but too expensive

[jurt1235]

3 years is $1,078.20.
That is for the basic model. For something with real specs, 2GB ram, faster processor, and a Dual layer DVD burner, you have to pay a $1,800 premium.
For that money you can buy a Dual core 2.3 GHz Power G5 and have change left.
Your real profit here: The Apple looks a lot better, and is still cheaper.
For the sad design of this Sun box, they should charge Dell prices, this since they are competing with Dell with the Fire server line anyway.

Bitch all you want. The Ultra 20 is incredible.

[WidescreenFreak]

Let people bitch about how you can build your own for a cheaper price. The Ultra 20 is still the better deal as far as I'm concerned.

* 3 year warranty on both hardware AND software (for which you have to pay extra with just about all other vendors)

* One of the most mature operating systems out there

* One of the most mature 64-bit operating systems out there (TRUE 64 bit)

* The only commercial system that is certified to run the three (arguably) most popular operating systems - Windows, Solaris, and Red Hat

Considering all of those factors, I still consider the Ultra 20 to be a hell of a bargain.

The only catch is that is it NOT $29.95 per month. You pay in three annual installments. I posted an open letter to Sun on a web site that I write for criticizing them for continually advertising $29.95 a month when they actually do not offer such financing. Jonathan Schwartz actually responded to it on his blog stating that financing and legal are the slowest segments of any corporation to respond to new ideas and that the Ultra 20's marketing was rushed. Just an FYI on that.

Still, I'd have that Ultra 20 replace my Sun Blade 100 at home in an instant if I had the finances at the moment.

Re:Website and RAID

[WidescreenFreak]

So, because you can't customize it on their web site, you're snubbing them all together? Have you not heard of something called a telephone? You can order Sun systems to your customization. Try it. I know, it's one of those archiac, analog devices, but it works! Really!

Wow. How the Internet doth spoil the impatient.

Consider:

[imsabbel]

Some people pay more for _just_ a service contract.
Without any hardware whatsoever.

Re:Bitch all you want. The Ultra 20 is incredible.

[WidescreenFreak]

Considering that I've been working with Sun hardware for over 10 years, yes, I am fully aware of that.

Am I supposed to care? In fact, is anyone supposed to care? If you want the UltraSPARC line, Sun still has high-end workstations to take care of that as well as ALL of their mid-range and high-end servers. They're all UltraSPARC driven. I love this system for numerous reasons, not the least of which is that the Ultra 20 supports my two favorite underdogs - Sun and AMD.

The hypocrisy on Slashdot is amazing. We all scream and cheer with "It's about time" at the announcement that Dell might sell AMD hardware. But with Sun, suddenly the attitude is "{nose in air} Well! It's NOT an UltraSPARC! Hrmph! Peasantry!"

Re:Sun's spiral of doom

[ChrisGilliard]

I don't think that Sun's recent Open Source moves are going to help either. What is the problem that they want to solve? until that statement doesn't involve the words "selling large servers" Sun will continue to spiral into oblivion.

Open sourcing their software portfolio generates a large base of developers that contribute to the quality of the products and maybe they will even reccomend Sun hardware to their CIO. It is really no different than OpenOffice.org. Basically you get a huge amount of goodwill assosiated with your brand. Then you can sell hardware and support. The big customers will not consider buying the software without the support contracts. This model has proven to work for companies like Redhat, Mysql, Suse and others as well.

Tired of overused analogies

[Jeff DeMaagd]

"razor and blade" would qualify as an overused analogy for marketing, though it kind of fits, because the software is free or cheap and the hardware is sadly exorbitantly priced.

Re:The future?

[Anonymous Coward]

Apple's strategy isn't really the same. You can't (legally) get a free copy of OS X or iLife, and Apple is only giving away source code to selected software. Apple is really selling a package: the hardware, the operating system, and the applications all combine to create their product. Sun is trying to establish a model where they sell hardware and give away the software. Maybe it'll work out for them. I hope so. Sun makes good stuff, overall. It's tends to be high quality but expensive, and many companies just look at the bottom line and want to buy the cheapest stuff at the expense of quality.

Give them credit here for this

[onyxruby]

Give them credit for this, it's a pretty decent deal actually. The only thing I don't like though is the fact their educational skills package is $3000. I'd like to learn Sun Solaris, and the one school I found near where I live that teaches it closed the very day I was to start class. I live one of the most tech heavy / college heavy areas in the US to boot!

Message to Sun, if you want more IT people on your hardware and software, you need to make it easier for people to gain those skills (you have just made it easier to gain the hardware). Books only go so far, you have to play with it, learn it and use it to know it. I'm interested in learning Sun, but no *nix shop is going to let me in the door no matter how many years of IT experience I have with just a book education. People want education, so make it easier for the lay person to afford it, ok?

The best advocate for your product is the IT person. The best way to get the advocate is to make sure that the IT person can learn you product. I've been looking for a reasonably affordable option to get trained on Sun for years, most IT people can't talk their contract house into paying for your clases. Novell, Microsoft and Novell all have readily available classes in community colleges and the like, Sun, where are you?

WTF? MOD PARENT BACK UP!!

[Anonymous Coward]

Okay, whoever modded the parent down is clueless. Sun can indeed customize their systems to anything you want. I work for a VAR. I know these things. In fact, it's my job to know these things. Yes, you are only given a certain number of configurations on the main web site, but that's called SIMPLICITY. They offer what they consider to be the most basic configurations that would appease a major market and they make those available. If that's not what you want, you are always free to contact their sales department or a VAR.

And I agree that if you're too lazy to pick up a telephone and actually **gasp** TALK to someone, you obviously don't really have an interest in the system and just want to complain.

Call a spade a spade and you get modded down. Unbelievable. Only on /.

Re:Razors and egos

[markov_chain]

Everybody know about Total Cost of Ownership, and aren't going to be impressed that they can get a Sun box for free. If Sun is going to make all its money off of software and customer service, then they should stop making computers altogether, and leave the hardware headaches to others.

It's the other way around. They are giving away the software (open sourcing it) with the intention of making money on, presumably, well built hardware. It makes sense, since there is room for innovation in big server installations (management, power consumption, reliability, failover, etc. etc.) and they have the hardware experience that could give them an edge.

Re:Bitch all you want. The Ultra 20 is incredible.

[Billly Gates]

The x86 servers they are selling are price competitive with the dells and Hp's and can run solaris which has commerical unix software that linux still lacks. A stable api and abi would be nice so unix vendors can port to linux. You can run windows or linux on them as well if you wish.

I agree with SGI. SGI's performed poorly and were just generic pc's with ok graphics cards and were expensive. Sun's offerings are not bad and solaris is really nice for those who need uptime. If sun can pull it off then great. It seems they are trying to reinvent themselves rather than acting desperate.

Lets hope I am right. The sun systems look more like open x86 unix systems then anything and you can buy one for as low as $799. Very much unlike the Sun I used to remember.