McNealy Warns Against Linux Sticker Shock

By Erin Joyce (Send Email)
Posted May 7, 2003

NEW YORK -- The chief executive of Sun Microsystems Tuesday said Linux's destiny is to dominate the PC, but defended his company's go-it-slow support of the open source operating system on its servers and systems. Sun's CEO cautions the financial services community against the dangers of vague pricing models as he touts his all-you-can-eat billing platform Project Orion.

"We think the big winner with Linux will be on the desktop," said Scott McNealy during a Q&A session at Forrester Research's technology and finance conference here.

"Should we have done Linux (for) Solaris two years ago? Guilty," McNealy said, referring to the company's Solaris proprietary operating system that has a huge installed base in the financial services industry. But Sun now gives the technology world both: proprietary systems that come with Sun's support, scalability and reliability, and servers that run on Linux.

"You can live the (open source) lifestyle if you choose," he said, while noting Sun's integrated approach to open source with its systems. "We will ship Linux blade servers, with the entire Sun One stack bundled," he said.

When told that many financial services companies are looking at running major enterprise applications on Linux, which threatens Sun's installed Solaris base, McNealy disputed that the trend was counter to Sun's approach.

"If you think that's your business, downloading bits (of an open-source operating system) over the Internet," it won't help you in terms of reliability and scalability, he added.

"The real challenge for Sun," he conceded, is that it was "late to x86," referring to Sun's decision last year to support Intel's x86 processor architecture with its non-SPARC processor platforms.

But now, with x86 architectures on servers, McNealy said technology buyers have three choices: go with Red Hat (the major distributor of a Linux operating system variant), Microsoft's Windows or Sun's Solaris, he said.

Then the question becomes, he continued, is who is going to give you the lowest cost on all of the networking layers in a stack?

The question helped give McNealy a lead-in to Sun's new pricing model for its integrated systems, called Project Orion. The project is Sun's plan to keep all its systems aligned by offering its Solaris, Solaris for x86 and Linux platforms with a single distribution venue and three licensing models.

He argued that after a company decides to go with Linux via Red Hat, there are still costs involved in hiring consultants to assist in the installation, configuration, and porting of applications, not to mention extra costs with networking directories. That's not going to help a customer "have fewer moving parts" in a data center, he continued.

McNealy, who often revels in mocking his competitors during public appearances, said Linux supporters IBM and HP , "lost on UNIX-based systems" and "are trying to leapfrog over to the past" with their aggressive support of Linux across major product lines.

"Sun is feisty, and ready to do battle," said Bill Doyle, research director of Forrester, about Sun's approach to Linux. But he also noted that the company has an uphill climb because of its reliance on selling proprietary systems that are tightly integrated.

McNealy, however, said the company has more than $5 billion in cash in the bank and is innovating where it can "add value" to Linux operating systems.

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