Thursday, August 25, 2005

Sun Today: Aiming for Clear Skies :: AO

Sun Today: Aiming for Clear Skies :: AO: "Without giving any indication of where our next generation is headed, I believe we're now AMD's number one Opteron supplier in the marketplace. So we know we can achieve some volume. Now the real challenge is, let's go achieve some value. Volume's a good thing, [but] at the end of the day, only if you can convert it to value that ultimately gives you the fuel to go build the next generation of volume."


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Sounds like sun is going to start pushing the utility computing model quite hard in the near future. Utility computing uses a similar model to salesforce where you don't own the infrastructure, you just pay for using it. In this cases its for CPU consumption.

I think they are doing this initially as a show case to show the model can work. Sun sells hardware and the main software components that drive the applications on the hardware. This is not going to change anytime soon.

remember that the incumbent telco's are going to loose majority of their voice revenue in a very short period of time. They all have to reinvent them selves!

So what are they going to do? Well lets see what their biggest asset base is:
1) PSTN Telecoms equipment
2) Data networking equipment.

The first is going to become worthless. The second is going to become critical and will continue to grow. But they don't make a lot from data! So where will the substitute earnings they currently make from voice come from?
They will start to push content. Video, games, music and take a small cut.
Ok great but that will generate only small amounts of income unless they have extremely high amounts of volume (which some will and some wont).

So what else can they do?
ASP/DSP I hear you say. Yes that's right. They will start to provide utility computing. CPU time and storage.
As the world moves to an on-demand paradigmn, the providers like Salesforce don't want to have to look after hardware etc. They want to be able to source that out to an expert in the field, who has a tie in with networking since these have to go hand in hand.
So the likes of AT&T, Telstra, BT will move to become utility providers of not only data throughput but also computing power.

If Sun can pioneer this space before the rest and have both hardware and software built for this sole purpose, they will be the number one infrastructure providers for Utility computing. The Cisco of tomorrow.

Should be interesting!

7 comments:

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