Sun Pushes Its Utility Computing Via Deals ; Sun Microsystems Inc. is slowly advancing its utility computing strategy, striking deals with outsourcers and systems integrators.

Abstract

Sun Microsystems Inc. is slowly advancing its utility computing strategy, striking deals with outsourcers and systems integrators that revolve around Sun's delivery of hardware, storage, middleware and networking software.

Sun Microsystems Inc. is slowly advancing its utility computing strategy, striking deals with outsourcers and systems integrators that revolve around Sun's delivery of hardware, storage, middleware and networking software.

The vendor recently signed pacts with Affiliated Computer Systems Inc., SchlumbergerSema and CGI Group Inc. for hosting applications and services using Sun's utility computing model.

Sun's utility computing strategy calls for the company to deliver its software, servers and storage integrated with partners' customized services and applications with a series of co-developed and co-delivered provisioning, implementation and metering tools and services.

"We are working with customers to reduce cost and complexity and deliver solutions customized to their specific business needs with our partners," said Patricia Sueltz, executive vice president of Sun Services, in Santa Clara, Calif. "When we talk about utility computing, we're not doing it as an outsourcer in utility computing clothing. Everything is about our partners. We co-design, co-create and co-deliver."

In contrast, rivals IBM and Hewlett-Packard Co. are provisioning their own e-business on-demand tools at their own data centers to help manage their adaptive enterprise engagements. While the next logical step in such engagements might be for those two vendors to urge customers to outsource the entire operation to them, "Sun does not have that choice," said Adam Couture, an analyst at Gartner Inc., in Lowell, Mass.

"It gives them some moral high ground. They can say [their] objective isn't to get you into [their] managed hosting center," said Couture, who added that Sun likely has dozens of similar deals with other service providers in the works.

As part of its freshly inked contract with Montreal-based CGI Group, Sun is working with CGI to deliver a utility- computing- based life sciences offering based on a Sun/CGI bio-IT platform with the help of Caprion Pharmaceuticals Inc. The deal calls for CGI to procure Sun network computing resources based on usage and offer its customers pay-for-use pricing.

Sun has seen momentum in its efforts to become a systems provider. It grew its services revenue in the past fiscal year by $200 million, which represents 36 percent of Sun's revenue. But Sun's aim is not to be a services company with 60 percent of its revenue coming from services, Sueltz said. "I'd like to see us grow as a systems company with services making up in the high 20s to low 30s [percent] with absolute growth on the product side," she said.

"The life sciences industry's computing needs fluctuate significantly. [With Sun] we created an environment with better risk sharing for basic computing and storage," said Perry Marshall, CGI's vice president of emerging technologies, in Toronto.