Let’s take it from the top
What is behind the decision to fold Sun’s storage group into the server group? I’ll quote from Jonathan Schwartz’s blog and analyze.
Mr. Schwartz has hold of a serious idea here: if Sun were competitive in storage it would be a profitable and growing company and the stock price would be several times higher.
Sun has been the sick man of storage since I started watching them in 1993 (see my post of 3 years ago Sun’s sorry storage story). I worked in Sun’s storage group for a few years – ’95-’98 – and found the culture dysfunctional, an observation born out by the dismal results of the last decade.
Sun had a server attach rate – the percentage of Sun servers with Sun storage – of about 75% in 1993. Today the attach rate is, I’m told, in the ‘teens, meaning that a couple of billion dollars of revenue and a billion dollars in gross margin is missing from Sun’s income statement.
[JS]: “I’m radically increasing Sun’s focus on storage today.”
[StorageMojo]: I’ve heard that before: Encore acquisition; MaxStrat acquisition; STK acquisition and a few more. Maybe it’s real this time.
[JS]: “First, I’m going to be combining our Storage and Server product teams to create a new converged group at Sun known simply as our “Systems” team.”
[StorageMojo]: Computer companies used to sell systems. Systems are the new black.
[JS]: “So we’ll still be strongly focused on being a multi-platform storage provider (just as our servers run multiple operating systems, and our operating system runs on every vendor’s servers), but we’re also going to start talking at a higher level to customers that see more standardization and integration in their future datacenters.”
[StorageMojo]: We think what Google and Amazon are doing, integrating cheap storage into Internet-scale systems, is the future. And we’re SOL in the present.
[JS]: “Now, why do I believe combining groups make sense? It’s a recipe that works for us. We combined our high volume x64 server group with our traditionally high scale SPARC server group over a year ago – leveraging the volume skills of the former with the scaling skills of the latter. What did that collaboration yield? ”
[StorageMojo]: Combining two successful engineering groups is one thing. Combining a failed group with a successful one is much more dangerous. Good luck.
[JS]: “Secondly, as our servers clearly show, we’re heading to a general purpose world – in which open and general purpose platforms will be the dominant drivers of growth, for us and the market broadly. ”
[StorageMojo]: Software is driving the market.
[JS]: “The first general purpose storage system from Sun was Thumper (our x4500) – powered by an open source operating system (Solaris), and file system (ZFS – soon to be parallelized by Lustre, a recent acquisition from Cluster File Systems).”
[StorageMojo]: Thumper is the first Sun engineered storage system in almost a decade that actually got people interested. And it didn’t come from the storage group. Hm-m-m?
[JS]: “Thumper rocketed to a $100,000,000 annual runrate within its first two full quarters of shipment (on a $13 billion dollar revenue base, that’s hard to see, but we certainly took notice – at least one competitor did, too). ”
[StorageMojo]: 10 years ago the A5000 FC array rocketed to a $750,000,000 run rate in two quarters – almost an order of magnitude better – when Sun was a smaller company. IMHO, if Thumper had been expertly marketed Sun would be trumpeting a $1,000,000,000 number. Sun still has some organizational work to do – to be fair, so does most of Silicon Valley – to get creative and passionate marketing for its products. (See Coolest New Box: Sun Fire X4500.)
[JS]: “I want to focus on one particular group, whose value only grows to Sun every day – our Tape and Archive business.”
[StorageMojo]: This is good news: StorageTek will remain a standalone group within the “Systems” group. (See Curse of the Mummy: Sun wrapped in tape.) STK wasn’t a good fit for Sun, but their expertise is valuable.
[JS]: “Combine these assets with some of our recent network innovations (like Magnum, the world’s largest Infiniband switch – which is not the smallest variant we’ll build, btw), the Crossbow community in Solaris – and it begins to look like we’ve got all the right ingredients to reinvent the datacenter.”
[StorageMojo]: The data center is sorely in need of re-invention, especially the storage piece. Who better to do it than the vendor with the least investment in the current paradigm?
The StorageMojo take
In most instances combining a server group with storage is a recipe for disaster: the server people resent storage margins and the storage people feel slighted. That could be the case here as well. But something had to change.
John Fowler, who heads the combined groups, should benchmark Sun storage performance against other system vendors. The numbers are dreadful – except margins – and a needed corrective for the curious air of unreality that has pervaded Sun storage for the last decade. Sun really has an important market opportunity: a seismic shift in data center architecture.
EMC is bearing down on this as well. Sun has no time to waste.
Comments welcome, of course. Comments are moderated, and since I can no longer access the spam file – no, I don’t know why – paste comments into the box rather than writing them there in case Akismet eats them.