29 July 2002 Sun Microsystems, the systems and software giant, is about to abandon its twenty-year strategy of only using its own microprocessors and will develop its first ever Intel-based servers, according to US press reports. If true, the move signifies a strategic defeat for Sun and will immediately raise question marks over Sun’s long-term commitment to its proprietary SPARC chips.
Sun Microsystems will not confirm or deny the report, but will make an announcement on 13 August 2002. According to InfoWorld, around this time Sun will release its Cobalt LX50 Server, which will run its Solaris operating system, as well as the open source Linux operating system, on Intel chips.
Previously, Sun Microsystems CEO Scott McNealy had said that Sun’s UltraSPARC processors and Solaris software was the best platform for every kind of server. He has been adamant that Sun would “never” relinquish its technological independence to Intel in the way that, he claims, Hewlett-Packard (HP) and Compaq Computer (pre-merger) have done.
In a repeated series of attacks, McNealy has said that by partnering with Intel, HP had become just a services vendor and had lost its capability for technological innovation. He has also said that Dell Computer’s relationship with Intel had rendered it a mere computer assembly vendor.
If confirmed, McNealy’s dramatic U-turn is likely to be seen as a response to poor customer demand for systems based on non-Intel processors. According to analysts, users can purchase Intel-based machines for around half the cost of devices that use Sun’s SPARC chips. In addition, software vendors such as database giant Oracle charge customers less to run Oracle software on Intel-based machines than on those using Sun’s SPARC processors.
A move towards using Intel processors would have important implications for Sun’s customers and the IT industry. First, its customers will be concerned about the long-term commitment of Sun to its SPARC processors. Sun may invest less heavily in research and development for SPARC, if customers prefer cheaper Intel machines.
For the IT industry, Sun’s reported partnership with Intel will remove the last major vendor solely to build servers based on non-Intel chips. All of the other large system vendors, including HP, IBM, Dell Computer and Unisys, supply Intel-based servers. IBM’s long-term commitment to its own chip, Power, has frequently been questioned.
Use of Intel’s chips means that vendors have to compete increasingly on economies of scale, instead of technological innovation. Sun could find it difficult to compete on price with vendors such as Hewlett-Packard after HP’s acquisition of Compaq Computer. Post-acquisition, HP now has a much larger pool of server products to compete with other vendors such as Sun.
This would not be the first time that Sun has moved its strategy towards Intel. After launching a programme to enable developers to download a version of Solaris 8 to run on Intel chips, Sun cancelled it in January 2002 because support costs were too high. It also has a low-end Internet appliance running Linux on Intel chips that also bears the Cobalt branding.