Interesting comments by Greg Papadopoulos in this News.com interview:
You have this exponential improvement in computing, but ERP is not getting exponentially complex. So you would certainly expect it to get cheaper. If you went to a CFO and said, “I can give you a million times more computing power,” they would say, “OK, I’m not going to close my books every millisecond, so you are going to give it to me at a millionth of the cost.”
The cost of computing is, in fact, the management of this stuff. That’s where 80 percent of the dollars are going. It is the fact that once you get just beyond the component level, the assembly (of applications) is an exercise left to the user. It’s not engineered.
If you believe in the growth of the network and the growth in demand for services on the network, we’re squarely about how you provision those services and that is certainly in the context of how people think about data centers today. What’s the kit–both hardware and software–that you need to provide the foundations of a service delivery platform? And that is network computing.
Sun is saying the right things, but focusing on the wrong markets. Come to the emerging markets with the total solution, Greg. They are waiting.
Fortune has a report and analysis of Sun’s software strategy:
[Sun’s Java Enterprise System] includes Suns Solaris operating system, of course, along with an applications server, a full e-mail and messaging system, a directory (necessary for managing all the users and locations on any network), authentication technology using Java, and portal software for running websites for both internal and external customers. That is essentially all the software infrastructure a company needs, on top of which it can deploy applications like SAP, PeopleSoft, or highly specific homegrown programs.
“The next wave in software is not about directories or e-mail, says Sun’s Jonathan Schwartz. That was the last wave. Our pricing puts an exclamation point at the end of that sentence. Commoditization is the perfect word. Dell has made great theater of the fact that the hardware is commoditized. We think they are half right. The whole system is commoditized.”
The big architectural argument Sun is making with this strategy is that, as software infrastructure becomes commoditized, it makes more sense for companies to buy an integrated package that just gets the job done. That way they can spend their real effort building distinct applications that run on top of the basic package and offer competitive differentiation.
These next few months will be very interesting in the software business. Sun aims to commoditize the software business, but it would take a lota whole lotfor the entrenched software providers like IBM, BEA, and especially Microsoft to even think about anything close to commoditized pricing.