Tuesday, March 24, 2009

Dear Mr. Schwartz

Dear Mr. Schwartz,

I was recently reading your blog and found the series of videos you created explaining Sun's strategic direction with respect to systems, software, and open source. Purely from standpoint of presentation, I'll tell you that the video format works well for you. The fireside-chat-like atmosphere comes across quite well.

In listening to your presentation in video 3, I was also excited by your statements about the coming fusion of networking and servers. You specifically said:

As I've said before, general purpose microprocessors and operating systems are now fast enough to eliminate the need for special purpose devices. That means you can build a router out of a server - notice you cannot build a server out of a router, try as hard as you like. The same applies to storage devices.

To demonstrate this point, we now build our entire line of storage systems from general purpose server parts, including Solaris and ZFS, our open source file system. This allows us to innovate in software, where others have to build custom silicon or add cost. We are planning a similar line of networking platforms, based around the silicon and software you can already find in our portfolio.

We believe both the storage and networking industry's proprietary approach, and their gross profit streams, are now open to those us with general purpose platforms. That's good news for customers, and for Sun.

Wow! That's great validation for what Vyatta has been saying for a few years now and I'm glad to see Sun joining our cause. I wholeheartedly agree with your overall analysis. In particular, I agree that if there is to be a fusion of networking and servers (and I think it's now obvious to the industry that it's going to happen), it's definitely going to happen on server hardware, not the other way around. I also agree that the gross profit margin of the proprietary networking vendors is exceedingly high and will be the subject of a forthcoming correction, and that it's good for both customers as well as the new vendors exploiting the benefits of open hardware and software (notably, Vyatta, and perhaps Sun as well as you begin to execute to your strategy).

That said, I think you're probably optimistic that it's going to happen on Solaris or Open Solaris. Sure, you guys have invested a lot into Solaris, and it is a pretty cool system, but the reality is that most everything Solaris has, Linux has also. What few things Solaris has that Linux doesn't (Crossbow and ZFS, for instance) will have rough equivalents in Linux shortly. The converse is not true, however; the main thing that Linux has that Solaris doesn't have is market momentum, and that can't be added to Solaris quickly. Because of this, I believe that the networking systems of the future are going to be built on a Linux foundation, not Solaris, as cool as it is.

Further, these Linux-based networking systems will not be managed like a Unix system, but rather will be built to familiar interface standards for the target audience. Put another way, in order to speed the adoption of this new model, we'll have to deliver more than high performance and a great cost structure; we'll have to deliver these systems with a network-appliance-like interface rather than a traditional Unix-like interface. You cannot simply take Solaris, run a routing stack on top of it, and call it a router, even thought it fundamentally may be quite capable of routing packets well. Any management paradigm that involves a user editing a plethora of configuration files in vi or emacs and then restarting daemons is doomed to a niche position at best because it simply won't fit into the existing management workflows prevalent in the industry today. Because of this, Vyatta has spent a lot of time creating a management paradigm for our system that delivers a standard network appliance look and feel.

So, Mr. Schwartz (and Sun), in summary, welcome to the party. Let's go get 'em.


Dave Roberts
Vice President, Strategy and Marketing

PS: Can you give me any confirmation of the IBM buyout rumor floating around? Is it going to happen or not? If you could lay out the rationale from the buyer's side, that would also be interesting for a lot of people. Some of us still don't get it, but I'll admit to not having a seat at IBM's latest corporate strategy executive summit.

Vyatta's contribution

LWN.net's Jonathan Corbet wrote a nice article last week detailing where the work for the 2.6.29 Linux kernel is coming from. Reports like this get created from time-to-time from the git check-in data for the various patches and contributions that make up the kernel source code.

I'm pleased to report that Vyatta ranked very highly in the latest survey. In particular, Stephen Hemminger, Vyatta's resident kernel wizard extraordinaire, was ranked #4 in total changesets contributed to 2.6.29. Stephen is very involved with the Linux networking subsystem and many of the changes related to changes in the Linux networking APIs and fixing broken drivers to conform with the API changes. Thanks to Stephen's work, Vyatta also comes in at #14 on the list of changesets contributed by corporation. This is fairly significant when you see that the company we were keeping on the list includes mega-Linux supporters like Red Hat, Novell, and IBM, and then other mega-corporations like Oracle, Intel, and Nokia.

Sun and IBM: the rumors continue

Hmmm... Well, the Sun/IBM deal is looking more and more real. The WSJ reported on Friday that IBM lawyers were on a due-diligence mission, combing through Sun's various contracts to make sure things are up to snuff. That's pretty good confirmation. You simply don't let another company's lawyers (your competitor's lawyers, in fact) go through your contracts unless there is a good reason. Good reasons include acquisition.

Thursday, March 19, 2009

IBM buying Sun? I don't get it.

The entire IT and business press has been atwitter (and Twittering), for the past few days about a rumor that IBM may be making a play for Sun. With Cisco's UCS announcement on Monday that put Cisco into competition with everybody in the IT universe, this IBM/Sun rumor jacked-up the blog-o-sphere to 11 on the frenzy-meter. The Wall St. Journal seems to have been one of the starting points for the rumor, and the headline reads "IBM in Talks to Buy Sun in Bid to Add to Web Heft." That's fairly low-key, really, for what would surely be a tectonic event in IT.

The problem is, almost nobody "gets it." When discussion this around the office and with colleagues in the industry, the basic reaction is, "Why would IBM do that?" Sure, Sun has struggled for a few years following the popping of the overheated tech-bubble in 2000, and it's understandable that they might be looking for a good merger. Sun still has many assets including a large customer base, good technologies (both on the hardware and software side), and a number of good products. So, the seller's motivations are well covered and they actually have things to sell. It's the buyer's motivations that everybody struggles with.

The press is starting to do a double-take, too, as it moves past the news phase to the analysis phase. Dana Gardner at ZDNet makes his opinion plain: "IBM buying Sun Microsystems makes no sense, it's a red herring". Dana thinks Sun might have floated the rumor itself to test the reaction to the idea. Om Malik at GigaOm says "Why Cisco, Not IBM, Should Buy Sun". In short, everybody seems to be scratching their heads.

For me, it just seems like Sun and IBM already compete in so many different areas that it would be hard to integrate Sun into IBM. For instance:

  • Sun and IBM couldn't be more divergent in terms of corporate culture. That alone makes any integration difficult. Would Sun employees really become long-term IBM employees?
  • The same thing goes for Sun and IBM customers. While an acquisition of Sun would clearly bring IBM a large customer base, do those customers really want to buy from IBM? Would they stay as customers, or would the acquisition simply precipitate a decision to choose another vendor? I was at HP when it acquired Apollo in 1989. Just following the acquisition, HP had great market share in the workstation market, but many Apollo customers had abandoned HP just a few years later, and most of the market share gains had disappeared. The same thing could happen with IBM.
  • IBM already has its own versions of most of the products that Sun has. Servers? Check. Operating systems? Yup, more than you can shake a stick at. Processor architectures? Yup, oodles of those, too. Database software? Yup, lots of that. How about Java? Yea, IBM even does well there. Any acquisition of Sun by IBM would force IBM to reconcile and merge all these competing products into the overall portfolio, something that IBM has lots of experience with over the years, but why go through all of that for little other gain?

In short, I just don't get it. I'm thinking that this is more rumor than fact, but I've been wrong about corporate acquisitions before, and there may be something I'm missing.


Okay, the headline is hyperbole, but it can't be a good sign when you spent millions buying a part of VMware, you announce a galactic data center virtualization marketecture based on VMware, and the VMware users generally don't get it. Alex Barnett has an article at SearchServerVirtualization.com titled "VMware users cast wary eye on Cisco UCS."

The money quote:

When VMware shops look at UCS, they see a platform that exceeds the needs of mainstream IT departments, relies on unproven technologies, requires substantial new investment, and forces dramatic change in the way IT shops purchase and manage their infrastructure.

That can't be good.

Wednesday, March 18, 2009

Juniper reacts to UCS

Jim Duffy at Network World has a good article describing the reaction of other vendors to Cisco's UCS announcement, notably Juniper. Unsurprisingly, all the competitors are pointing out the various holes in the all-or-nothing scheme. Rahul Singh, a principle with consultant Pace Harmon, says that he had given input to Cisco to partner on the server portion of the architecture:

“This is not something that Cisco’s done in the past -- trying to get into an already crowded market and displace vendors that people already have a significant amount of investment in and experience with,” Singh says. “It doesn’t make sense but folks at Cisco are used to selling hardware and boxes so it’s almost a logical extension.”

Exactly. But why let things like "sense" get in the way of a grand marketecture, particularly one that delivers a whopping 15 to 20 percent savings in return for your complete future product loyalty?

Data Center Love Fest

Ben Worthen at the Wall St. Journal has an interesting take on the Cisco UCS announcement. Summary: heavy on puffery and mutual congratulation between the members of the partner cabal, but light on specifics like, you know, pricing.

Tuesday, March 17, 2009

Selling your data center soul for 20 percent?

I almost had another "spray coffee out the nose" experience this morning when reviewing the industry news headlines. Yesterday, Cisco managed to get into competition with just about everybody in the IT universe. "Cisco Systems doesn't seem to know how to color inside the lines," wrote Matt Asay this morning. What did Cisco do? Well, it announced it's "Unified Computing System" (UCS) that basically puts it into competition with IBM, HP, Dell, EMC, NetApp, Citrix, and everybody else that plays in the enterprise and service provider data center. Craig Matsumoto at Light Reading does a good job on the various details.

"What the hell is a UCS?" you ask. Well, according to Cisco, it's, "the next-generation data center platform." It's "designed to improve IT responsiveness to rapidly changing business demands," and it "accelerates the delivery of new services simply, reliably, and securely, through end-to-end provisioning and migration support for both virtualized and non-virtualized systems." In short, it's an all-singing, all-dancing integrated mash-up of networking, compute, and storage widgets, all of which plug into nice rack-mountable chassis with little Cisco logos on them. Cisco says that using UCS, you'll be able to "unify, simplify, and amplify," er... something.

This is the biggest, boldest data center marketecture the world has ever seen. It's chock-full of buzz-word compliant marketing phrases and it's 100 percent certified politically correct. The Cisco marketing videos are stuffed with beautiful people who look really happy about reducing their cholesterol rating and amplifying, er..., whatever it is that UCS amplifies. Seriously, I didn't see one ugly or unhappy person in the videos.

In short, wow, what could go wrong...?

In listening to some of the other videos, I was struck that Cisco really has thought this thing through. For instance, in a second video, Mark Fulgham, Vice President of Marketing for Cisco said:

We all have to recognize that the language of business is money. And so with that in mind, we have consciously created some really empowering TCOs here. One that addresses a 20 percent total cost of ownership reduction in the area of facilities, which really has a 10 - 15 year capitalization cycle. So this is a very dramatic contribution to the bottom line. Secondarily, we are also looking at a 15 percent reduction in the actual platform. So again, very competitive and actual good table stakes in being able to respond to data center virtualization. Last but not least, we also see this as an opportunity to allow companies to rethink their organizational models, so that they are able to bring together more effective, efficient, and responsive IT organizations to address the just-in-time as opposed to just-in-case provisioning models that IT has today.

Just listen to that. "We have consciously created some really empowering TCOs here." Like wow, they really spent time on this. It was conscious; definitely not unconscious. The "TCOs" are really "empowering." Between the "empowering TCOs," the "amplifying," and the good looking people in the videos, you just know this is going to be good.

According to Fulgham, speaking the language of business, which is money, this whole thing will shave 20 percent off your facilities costs and they are "looking at" a 15 percent reduction in the "actual platform" (translation: all the hardware and software you're going to have to buy from Cisco to get you this).

So, my first reaction is how, um..., underwhelming it is.

Honestly, is that it? All these big chassis and virtualization and unified, integrated, automated everything and you can only give me a TCO reduction of 20 percent on my data center facilities? Dang, everybody else in the data center rearchitecture and virtualization business have shown TCOs much higher then this when companies are really ready to go whole-hog down the path. And that's for mixed equipment from multiple vendors. How is it that Cisco wants to integrate everything and can only show small double-digit reductions like this? (Answer: Maybe this stuff is exorbitantly priced.) A reduction of 20 percent might be "empowering," but it's hardly impressive. I wouldn't know; I haven't ever really felt empowered from a TCO.

Secondly, only a 15 percent reduction in the cost of the "platform??" Let me get this straight... Cisco can't save me more than 15 percent after completely rearchitecting my data center and fork-lift upgrading all my current gear to a Cisco UCS platform? That's staggering. Hell, most people could shave 15 percent off the cost of their data center hardware and software by rolling their current vendors for slightly better discounts, particularly during this macro economic climate.

Thirdly, just what the hell does, "very competitive and actual good table stakes in being able to respond to data center virtualization," mean?? What kind of mush-mouth, marketing double-talk is that? Is anyone out there "responding to data center virtualization?" Anyone? Anyone? Beuller?

"Last but not least," Cisco sees the adoption of UCS as an "opportunity to allow companies to rethink their organizational models." It's not a problem, you see, that UCS will cut across every single operating team in your organization and throw your organizational structure is a mass of tangled string; rather, it's an "opportunity." Wow, how nice of Cisco to give everybody this opportunity. I mean, I'm sure that everybody was sitting here in a down economy, with budgets getting cut across the board, having to make all manner of hard decisions, and negotiating like crazy with vendors to make all the numbers add up at the end of the day, thinking to themselves, "You know what I really need right now...? The 'opportunity' to rethink my whole organization model. Yea, that's it." Seems like Fulgham comes from the "it's not a bug, it's a feature" school of marketing. But who can blame him with all the "amplification" in the air? Certainly, not I; it's enough to give one a case of the vapours.

Don't just take my word for all this, it's straight from the lips of Cisco. Watch the video.

Okay, enough of the sarcasm. Here's the real-world translation for all you folks that haven't lived through grand-scale marketectures before and don't speak the lingo:

In return for a fork-lift upgrade of your whole data center infrastructure (networking, servers, and storage) to a Cisco UCS, you'll (maybe) see a 20 percent reduction in facilities costs and (maybe) a 15 percent reduction in "platform" costs. Yes, you'll have to throw out everything you have today to get these staggering "benefits," but you can rebuy everything from Cisco again with a 15 percent savings. In return for all this, which you could probably get sticking with your current best-of-breed architecture and negotiating a bit harder in this down economy, you make the Faustian bargain of locking yourself into racks and racks of single-vendor (plus a small cabal of "partners") proprietary gear as far the eye can see. Oh, but I almost forgot--you also have the "opportunity" to completely "rethink" your IT organization. And wait, they'll also throw in a free set of Ginsu knives...

All this is brought to you by the same people that today sell you 1-port Fast Ethernet cards for $639 (not Gigabit Ethernet, mind you!) and 512 MB of memory for $2447. Now, maybe it's just me, but when Cisco can't find more than 15 to 20 percent savings in their own marketing announcement and they have a history of selling $639 Fast Ethernet cards, call me just a little skeptical that I'm not going to see all the "amplification" that I have been promised, er..., whatever that means.

What's the value of choice and avoiding vendor lock-in? Would you really sell your data center soul for 15 to 20 percent?