CRN Interview: Scott McNealy, Sun Microsystems

With the launch of Project Orion, Sun's Chairman and CEO seeks nothing short of anthropologic change in the way companies deploy and pay for IT systems. At the heart of Sun's strategy is a bundle of integrated, Java-based software and a per-employee subscription pricing model. McNealy explained the plan in an interview with in Chief Michael Vizard and Senior Editor Elizabeth Montalbano. Here is an excerpt:

CRN: Given current practices around the procurement of IT and all the companies that have a vested interest in the existing process, why do you think customers will gravitate to Project Orion?

MCNEALY: We are only riding what is a wave of inevitability. We haven't invented anything new; it's not innovative. It's just brain-dead obvious that this is how we have to move.

CRN: Essentially, are you saying the traditional IT integration business is now forever altered?

MCNEALY: There are still going to be boundary systems. We have to move to a higher level of abstraction. There's going to be a lot of application and content integration with the Orion stack. It's just that you have to move to that level. Instead of putting the piston ring around the piston and putting that into the engine block and connecting that, we're talking about getting a fleet of these things to all work together and be in the right places at the right time. It's just a whole different level of integration help that they can offer the customer.

CRN: So the integration work then becomes more about business processes?

MCNEALY: Exactly. That's what I call information management instead of information technology. And they can help the customer with information management (IM). We're the IT partner to help the 'IM,' or information resources component of the channel. And then there's the whole hosting, service provider and utility model, financing and other opportunities that they have.

CRN: How will the channel adapt to these changes?

MCNEALY: There are three things the channel can do. One is to custom-build these IT jalopies. Two is to help customers with their information management. And three is to host the jalopy to become the service provider. Our suggestion to folks [is] that as long as you're alive, you're still going to be dealing with the custom jalopies and maintaining those custom jalopies. But the right answer is to get standard, integrated systems, host them, and help people with the information management challenge. Those problems are forever.

CRN: Will the channel understand the need to change?

MCNEALY: I think they get it. They understand it. We've been talking to them about this for 12 years. They're moving that way. I spend a lot of time with the channel, and they all get it. We all understand that 30 years from now, there are still going to be custom jalopies, and people are going to want to do that model. But you can't just ignore where we are today. Getting from point A to point B is a migration. It's an evolution. You have to be able to do both. That's why we still sell the app server separate with a la carte pricing, why we still sell it on multiple platforms and why we still sell the whole thing in parts if people want to go that way.

CRN: Some people would say Project Orion validates what Microsoft has been saying about the server operating system platform all along. How is Sun's view different?

MCNEALY: There are a couple of huge differences. Our pricing is 50 percent to 75 percent cheaper. Second, we have an end-to-end security model, from smart cards to the authentication to the Java security model to Trusted Solaris to trusted containers to Sun Ray. It's end-to-end like nobody else's business,no viruses, and secure conditional access. Third, it's integratable, not integrated. That means you can add and/or delete. You can take our directory out and put Novell's in. You can take our system out and put Veritas' in for the file system. You can take our app server out and put BEA's in. You can take our storage out and put EMC's in. You can take our kernel out and put in Red Hat's. This is integrated all the way down to the kernel level. With Microsoft, it's welded shut. And we are light-years ahead of Microsoft on data center manageability. We're moving into things like N1, and they're still trying to figure out how to do lights-out computing. The last piece of it is that we can rack-wrap it, [while Microsoft has] to get Dell to deliver it.

CRN: When IBM Global Services wins a deal, Sun is often a casualty. How do you rally other service providers to fend off IGS?

MCNEALY: We're working very hard to provide more reference architectures and more training programs. We're carving out like we did for 1,000-person-and-under sales for the channel. IBM is very strong in small to medium-size enterprises, whereas we can't get to them. Today, we've never been more channel-friendly. I'm telling our field organization, 'Listen, you're not getting more head count. The only way you're going to get more feet on the street is by enlisting and driving channel partners.' They know that. The previous administration grew field head count like crazy.