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Server and software major Sun Microsystems has always positioned itself on the strength of its technology-rich systems. Unlike its competitors like HP and IBM, Sun shirked from taking a big plunge into services and stuck to break-fix, support and managed services. In the last one-year or so, the company has made a conscious shift to expand its services business, insisting in typical Sun style, that its service offerings leverage around its technology prowess and know-how.
The company’s senior executives - Dan Berg, vice-president and chief technology officer, Sun Services, and James B Baty II, vice-president and chief technology officer, GSO, were in Bangalore recently. They spoke to Priya Padmanabhan of CyberMedia News on the company’s service mindset and roadmap.
CMN: In what way has Sun changed the scope of its services offerings?
Berg (In pic): Some of the services we offer include professional services, managed services, support and education services. But the scope has not changed too much. Three years ago, the vast majority of our services were support and break-fix. That definitely is still a good piece of our business. We have tried to branch out into operational type services-managed services, pre-emptive services, knowledge services and so forth. In these areas, we have leveraged what we have in terms of knowledge back into service offerings. For example, take the Sun preventive services. This is to prevent the problems before they happen - a proactive rather than a reactive approach to problems. Most of our competitors are getting better - proactively reactive! We want to be more responsive in tackling an issue before it occurs.
We have been investing a lot more in services from an R&D perspective. Sun happens to have a CTO for services, since we want to bring a lot of the technical prowess that we have in the R&D and innovation to services. We offer services that can mitigate the operating risk.
CMN: Can you give a few examples of some of these preventive services?
Berg: For example, take connected customers. We are trying to have close ties with customers to get data about their environments. For instance, if I know what hardware they are running, what firmware levels are on, which OS patch levels, applications patch levels are on and a context on those, I can provide a much richer service to the customer. Almost inherent in everything we do in services, there is a network context. We are leveraging on the network as much as we can.
Baty II: In the past, companies viewed IT as data processing. This was a specialized functionality and there was not a lot of change. Then, in the end-user computing and Internet age, it was about departmental initiatives. Usage exploded across the enterprise and got out of hand.
Companies these days are looking at becoming more efficient in how they run IT. Most companies don’t want to be their own system integrators. They would like to buy packaged systems and services. There are two ways of doing it - manually or by using consultants. We believe that use of technology, use of networks, telemetry and databases is a more cost-effective way of managing systems than to throw a lot of people at systems.
CMN: What is Sun’s overall corporate strategy on services going forward?
Berg: It is about delivering services via the network and also designing, delivering and managing IT environments for customers and delivering innovation via the network. You will see more and more services from us, which will take care of the operational concerns.
Services contribute over 40 per cent to Sun’s overall revenues. It has been increasing over the last few years. Jonathan Schwartz, our president and CEO, said recently that eventually everything that we offer will be offered as a service.
CMN: Would Sun be willing to provide services in non-Sun environments?
Berg: Yes. This is another big change in Sun services over the last few years. Traditionally, our business has been Sun-only. Everything we do now is becoming heterogeneous - we support IBM, Windows and HP. The types of projects we get involved in do have some degree of Sun. This shift happened in the last one and half years. We acquired a company called SevenSpace, which did network management and operations management.
Baty II: Take a look at how Sun’s technology portfolio has evolved. Five years ago, we predominantly sold systems that ran Solaris OS on our Sparc processors. We did not have much of a software stack. We began acquiring the software stack especially as these are common services - App server, web server and also branched out into partnerships and technologies. Now, we deliver operating systems not just on Sparc but also AMD Opteron. We also have other OS-Linux running on our systems be it Solaris on Intel or AMD systems. So our Services strategy is also a natural response to having diversity in the product portfolio.
We would be less interested in a customer who does not have any Sun technology. Not a whole lot for us to leverage in that environment to provide value to the customer.
Generally, there would be very few companies that from a business strategy standpoint, would invest in only one hardware provider both from functionality and also having best-of-breed. It would be unlikely for us to find a customer which is 100 per cent Sun, or 100 per cent Dell or IBM. Many companies have to deal with delivering systems and services in a heterogeneous environment.
CMN: Are you also looking to migrate from licensing to a subscription-based model?
Berg: Yes. The subscription model can be applied to any service. It is more economical to customers. Take electricity for example, you don’t pay for the percentage of the infrastructure that you use but instead pay depending on usage. It’s the same with Sun. You would extract utility from the system. It is a migration that we are going through-towards the subscription model.
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