McNealy touts N1, warns against Microsoft

LAS VEGAS--Sun Microsystems will need to seek a little help from its friends to make its ambitious N1 plan succeed, Chief Executive Scott McNealy said Monday.

The company's N1 plan is designed so administrators can get more use out of existing hardware by sharing jobs across several systems. N1 will automate tasks that are often performed by hand, the company has said.

Sun needs to make sure that equipment from competitors such as IBM and others will fit seamlessly into the N1 plan, McNealy said at a news conference following his keynote address at the Comdex Fall 2002 trade show here.

Those companies could include existing Sun N1 partners, such as Cap Gemini Ernst & Young, EDS and Deloitte Consulting--all "integrators" that can match Sun's technology with a customer's computing infrastructure.

"We will allow integrators to build the connectors to non-Sun environments," McNealy said, making assurances that technology needed for N1 will be available. "We'll make it happen, whether we do it or the (computer reseller) channel does it, or a third-party does it."

Sun has pitched its N1 plan as a way for customers to squeeze more use out of existing computers, many of which sit idle much of the time in corporate data centers.

N1 competes with other computing efforts, such as IBM's autonomic computing plan and Hewlett-Packard's Utility Data Center plan. The N1 project is based on open standards, McNealy said.

Sun recently acquired Terraspring and Pirus Networks to help boost its N1 efforts. Software from both companies is used to help separate computing processes from the particulars of the server or storage system used.

This layer of "virtualization" makes it easier, for example, to allocate more processing power or reduce storage capacity as demands from computing jobs fluctuate.

During his keynote address, McNealy reiterated several familiar Sun themes, warning potential customers away from IBM and Microsoft.

Letting IBM Global Services into a corporation amounts to a "self-imposed lobotomy," McNealy said. He called Microsoft technology "welded together and welded shut," explaining that the software giant's products don't work well with other companies' products and only forces customers to buy more Microsoft products.

Sun's McNealy: Make it easier Scott McNealy, CEO, Sun Microsystems

Storage systems from EMC, username-password databases from Novell, and application servers from BEA Systems will fit into a Sun environment, just as well as Sun products, McNealy said.

McNealy is something of an outsider at the Comdex trade show, which in the past has focused on "Wintel"-based computers. He gave his first Comdex keynote address in 1999, when Internet mania was still alive and well and McNealy's products still commanded a steep price premium.

Today, Sun is in the process of laying off thousands of its employees and is struggling to return to profitability. Still, McNealy remained optimistic--and unapologetic--about Sun's role amid the dot-com mania.

"We monetized the bubble," McNealy said. "Having $5.2 billion cash in the bank is a very, very good thing. We've generated cash for about 32 straight quarters.

"It's not all that bad out there, at least from my perspective," he said.

Three years ago, McNealy also had good material for his keynote address, as a federal judge had just declared that Sun archrival Microsoft was a monopoly. Today, Microsoft has emerged largely unscathed from its long-standing antitrust suit. Not surprisingly, McNealy didn't use Microsoft as the butt of his keynote jokes.

He did offer some grudging praise to Microsoft as a company that's investing research money in the right direction--the cluster of interconnected computers McNealy refers to as a "big frigging Web tone switch."

"I give Microsoft actual credit. They are trying to solve the problem with R&D, as we are," McNealy said. He didn't pass up an opportunity to criticize the company, however, for lagging in high-end servers that contain 64-bit chips and with more than four processors.

McNealy stood by his company's own research and development efforts, which is being spared the worst of 4,400 job cuts. Over the next five years, Sun plans to spend $10 billion in research and acquisitions, the company said in a statement Monday.

Sun's CEO also praised Microsoft for having superior programming tools, an edge that can win contracts.

"The one area Microsoft does well, is have really great tools that get to prototype quickly," McNealy said. The resulting product might not work well on large servers and might be riddled with security holes, he said, but producing a good prototype fast can be enough to get a customer to place an order, he added.

"We're better at getting from demo to production, but they're better at getting to demo, and a demo often gets you an order," McNealy said.