Naturally, Sun believes it has the answer--buying processing power from the company's standardized computing grid. But in San Francisco at an annual Sun meeting with analysts, Papadopoulos laid out his reasoning for why he believes the trend is more than just a Sun Grid sales pitch.
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The basic reason is that innovations in software are beginning to arrive not in the form of a CD of digital bits that a customer installs but rather in the form of a service that a customer uses over the Internet, Papadopoulos said. "Every business plan I've seen at software start-ups is 'We want to be the Google of...' It means they're going to create one of these services."
Selling software as a service rather than as bits means swifter innovation, he added, because deploying improvements within a single service is faster than distributing it to innumerable customers who must then install and test it. "You eliminate a tremendous amount of time and complexity," he said.
The result: Information technology executives realize that designing and operating their own equipment costs more than paying a company that specializes in doing so, Papadopoulos said. And computing infrastructure will become a financial liability.
"In 2010, if you're a big custom IT shop with thousands of employees, that's going to look like as differentiating a value as showing how big your pension plan is today," Papadopoulos said.
Sun Chief Executive Scott McNealy disparaged companies that assemble computing systems out of a hodgepodge of components.
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"'Best of breed' is now code for Frankenstein. I've walked into more than a few data centers where I said, 'Whoa, where did you get that thing?'" McNealy said. "They've got body parts from every supplier you can imagine. There are big bolts sticking out everywhere and stitch marks."
Sun's goal is to sell the hardware and software that companies use to supply such services, and it's succeeded with some, such as eBay, which hosts auctions, and SalesForce.com, which hosts customer relationship software. But adoption of the idea so far hasn't been enough to stem Sun's market share losses or consistent profitability.But McNealy acknowledged there are major impediments to the change.
"We want to be a provider of computing or infrastructure supplier to service providers. One of our frustrations is that service providers have been dinosaurically slow," he said.
Cultural problems also interfere.
"The anthropology is the one big issue. We've been working with a very, very large bank. For nine months we've been trying to work with terms and conditions and liabilities. The purchasing department is trying to specify the chain-link fence that goes around the server," McNealy said with some exasperation. "Finally we said, 'Screw it. We're going to find someone else.'" When Sun walked away from the table, the bank's business unit intervened with the purchasing department, and now talks have resumed, McNealy said.
Papadopoulos also pointed to problems that Sun's having setting up its grid, which the company has announced on more than one occasion but that still isn't publicly available.
"We're in the third architectural revision of the physical infrastructure below and the container management and billing and security and job isolation on top. It's really hard," Papadopoulos said. "It's a lot harder than we thought."
Retail or wholesale?
Sun's internal grid effort is designed to stimulate service providers into moving faster, McNealy said. "We're out irritating the market a bit."
But he recognized that Sun's effort might not go over well with service providers thinking of competing products. Therefore, Sun eventually hopes to fade into the background.
"Ultimately, our preferred answer is that we become a wholesaler," McNealy said. "We don't want to be in the subscriber management business or constomer care business. We're not structured to answer the calls. We don't have big billing engines to do microbilling. We don't have a consumer brand."
But Sun hopes to remain relevant in the world of software as a service, Papadopoulos said. Open-source software is common for software distributed as bits, but network services use proprietary technology. Sun expects its grid work will bring some openness to the idea.
The company hopes that communities developing new services--testing a Web-crawling algorithm that powers a search engine, for example--will use the Sun Grid. There they can publish not just their software source code but also prototypical services, he said.