Sun and Intel CEOs Announce New Agreement

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Sun CEO Jonathan Schwartz and Intel CEO Paul Otellini took the stage in San Francisco Monday to announce a new alliance. Listen here for the audio of the entire presentation and the Q&A session.

Transcript:

Guest: Jonathan Schwartz – Sun

Guest: Paul Otellini – Intel

Jonathan Schwartz – Sun

Well, good morning everybody. I think we’ve got a pretty interesting day ahead of us. What I’d like to do is, first of all, welcome Paul and the Intel team. As somebody earlier remarked, it was interesting to see those two logos side by side up there, with no spontaneous creation of energy around them. We think today really changes the marketplace for Sun, it certainly opens up a new era in our future. We are really looking forward to talking through what it is that we’re all about.

So, what I’d like to do, and maybe give Paul an opportunity to take a little rest here, is actually talk back to a meeting, and I don’t know if you remember this Paul, but when I was announced as the CEO of Sun, that was back in April of last year, I made a series of phone calls, and probably first on the list was a call to Paul to say, surely, there’s more that we could do together. I mean we are really fundamentally engineering companies, we’re both really focused on innovation and opportunity. We then had dinner in a San Francisco restaurant, which Paul enjoyed a great deal, he came to my neighborhood, which I was happy about. We really got to talking about the marketplace, and it really struck me at that point, the more we talked, the more similarly we viewed the market, the more similarly we viewed the market opportunity.

A slide that can give you a little picture of that is really quite simple. The more folks come online, the more services they want to get access to. You want to get access to your Gmail account, you want to get access to your work, you want to get access to the new entertainment services. The more folks we could bring online, the more opportunity on the network, the more opportunity that would drive in the world’s data centers and network operation centers to fuel that demand. This is a very simple idea, but really the volume on the front end of this is what defines our markets. The accessibility, the affordability, and the innovation that really captivates consumers brings people online and creates economic opportunity, and certainly for Sun and Intel back in the world’s data centers.

So, what I thought I could do is just give you a little bit of a perspective on, not only our business model and the way we see the marketplace, but put our relationship today in the context of the business that we’re ultimately building, and then I will turn it over to Paul to talk about some of the things that we’re going to be doing together.

So, if you spend anytime around Sun, you’ll hear us talk about the four S’s. We’re basically in four businesses, and those businesses are Software, Server, Services and Storage. Now, for us those businesses are a Venn diagram, because there is a considerable amount of overlap between them. Customers really don’t want to have to make four entirely distinct and separate and disparate decisions, and similarly as an R&D company, we don’t want to have to do completely independent R&D to go pursue these marketplaces.

So, we want to leverage to the extent that we can the core innovations we have at Sun, the core systems engineering expertise, software expertise, and market expertise. To the extent that we can, that creates a very efficient model for R&D as well as a very efficient mechanism to go pursue the marketplace, but importantly for Sun, we cannot be just about our own intellectual property. We cannot simply attempt to lock piece A to piece B and piece C, that’s not how customers buy as we see in the marketplace, that’s not what ultimately we believe the market actually wants.

So, if you look at how we go pursue the marketplace, we tend to meet customers where they are today. Our servers at this point run both the SPARC as well as AMD, and going forward, the Intel servers we build are not just about running Solaris, they’re about running Windows, they’re about running Linux, they’re about running Red Hat.

The software we ship, and I’ll give you a graphic to really make this point in a moment, dominantly runs off of Sun hardware. The majority of the software that Sun builds is running on Nokia hardware or on Intel hardware or on — certainly non-Sun hardware, HP, Dell laptops and notebooks along with those systems and servers up in the network.

Our storage business tends to be very, very cross platform. A very significant portion of the storage we build in the marketplace, whether it’s archive systems or enterprise storage, attaches to an IBM mainframe or to an HP server, or to a Windows server.

Then finally our services business, customers don’t want to just go to a company they can support only its own products, they need those products in deployment attached to a world of other innovations and opportunities. So, really this is our view of the marketplace. We meet customers at the edges of this Venn diagram and then we do our best to bring them toward the centre, knowing full well, there’s only one customer in the world who only buys from Sun and that’s our Chief Information Officer and we don’t expect to clone him anytime soon.

So, fundamentally behind this is a very simple concept that I know — also, Paul and I spoke about, which is a belief that volume drives value. So, what you see up in front of you here is a chart showing since we announced the open sourcing of Solaris, announcing that Solaris would be cross platform, would run on anybody’s hardware, what happened when we left those downloads free onto the networks? So, you’ll see back in March of 2005, when we began this program, we have come close to, if not, I don’t have the exact numbers in front of me right now, around 7 million licenses total distributed out into the marketplaces, 7 million licenses. What’s truly interesting about those download figures is how significant a proportion of those downloads are actually running on Intel and x86 hardware out in the marketplace, nearly 70%.

So, 7/10 downloads, 7/10 of those licenses of Solaris into the marketplace were not running on Sun hardware, they were running on Intel innovation. They were running on systems built by HP and DELL and IBM, and clearly if there is going to be an indication of opportunity for us to work together, it looked an awful lot like, here is a great motivation. It’s evident that customers wanted us to work together, and so clearly we wanted to do exactly that.

So, I think you’ve seen some of the news come out this morning, but as we were discussing with the media this morning, you’ve seen one out of three elements of this relationship. To just walk you through what in fact is going on. We are announcing today a relationship in which Intel will endorse Solaris, will support it across a broad range of Xeon platforms, will agree to OEM Solaris out into the marketplace, and to ensure that the market gets the support it needs in running and optimizing Solaris on Xeon platforms. This is a market changing event. This totally changes the perspective that a customer has on how they can do business with Sun, and similarly how they can do business with Intel.

So, Intel has agreed to really promote Solaris, to help us collectively go off and build the marketplace and the ecosystem around that, and reciprocally Sun is announcing today that we are going to be building a complete line of Xeon servers as well as workstations, complementing and augmenting a very rapidly growing server business that we have at Sun. You’ve probably seen the double digit growth we’ve posted now for consecutive quarters. This just opens yet more opportunity creates more choice for consumers, and again, not just running Solaris, but running Windows as well as Linux that’s out there.

Lastly, and I think what’s most interesting to me is — in fact our teams had a dinner back in December to help prep them for working together on getting this agreement struck, and it was evident, we had all of the heads of our product businesses there, and similarly Paul had some of his leading products folks there as well. We’re both engineering companies, we’re both companies focused on technology, focused on the advancement of our own technologies, using process, using wisdom about the marketplace to create new innovations that really capture and captivate consumers.

So, we’re also announcing today that we’re going to be collaborating on the next generation of our software leveraging Intel software expertise, the next generation of systems leveraging Intel microprocessors as well as Sun Systems engineering capabilities. What does that hold for the future? Time will tell, we’re pretty certain you all will be paying attention to that, and certainly we think there is just a world of opportunity out in front of us. So, this is really a comprehensive relationship. This is not simply a buy-sell arrangement. This is a mechanism that brings the two of us together and creates new market opportunities and new options as well as new value for both of us.

So, the substance of our collaboration, why don’t I just quickly walk you through this, I think you can read this on your own. Again, from the Intel side, Solaris will now be a Tier 1 operating system in the Intel definition, which again confers upon Sun and the ecosystem built up around Solaris in the OpenSolaris Community, a great opportunity to go drive after the volume leading microprocessors in the marketplace. This really brings Intel’s involvement in not just the product evolution, but also the community evolution around the Open Source Java platform, NetBeans, as well as Solaris. Then importantly, Intel is going to help make sure that we know how to optimize Solaris well for Intel microprocessors, so we end up with a better total solution for customers.

On the Sun side, we’re certainly looking forward to building out uniprocessor Dual and Quad Core processor systems. I think we’ve also suggested that we’re not just going to end there, this is — again, we see the marketplace is growing, both in requirements as well as the need for scale. We’re going to be building out things that are greater than four way, and I don’t think it takes a lot of creativity to figure out what’s greater than four way, but it sounds an awful lot like an eight way. As we go — yeah, six way, probably not. Again, this is a mechanism for both of us to get together to do the engineering, to do the hard work, to invent things that really capture and captivate consumers.

So, with that I’d like to pass the pickle to — actually you have your own pickle. Paul Otellini, Chief Executive Officer in Intel. Thank you very much.

Paul Otellini – Intel

Thank you, gentleman. As Jonathan said at one level the very highest level, this is about Intel endorsing and embracing Solaris and this about Sun endorsing and embracing Xeon, but I think there is a lot more behind that story and to give you some of our perspective on that. I thought it has been just a couple of seconds talking about how we at Intel view the enterprise environment today. At the highest level, the biggest single thing that’s happening is it all data centers regardless of their size are now focusing on evolving to a service oriented architecture and what that means we’ve think about the data center providing the critical services for a company, large or small. It means you start worrying about the cost of that echoes of that environment. They overall ecosystem built out in a particular how you use your equipment.

Thinks like utilization rights of servers are becoming very, very critical particularly in the era of rising energy cause. So, you want to able to use them more, but also have them costless in terms of the overall construct at the data center. As this happens, we look at things that are important to CIO’s and data center managers today. One of the things that’s popped up to us is that Solaris is evolving as a mainstream operating system, as you saw some other rate on the downloads, but it also it’s mainstream and enough itself and just to the equipment the Sun ships.

Now we’ve the opportunity to have Intel Inside many of those boxes, but it is becoming as the slide as the Mission-critical UNIX for Xeon. What is that mean? It means that we can collaborate together to make sure that the feature sets that people are — who buyers are focused on that is availability, reliability, Demand Base Switching, virtualization those kinds of features can be unleashed from the microprocessor through the operating system into the hardware the people buy, this lowers are in customers cost and increases the utilization rights. It’s all very, very good.

All the customers are demanding more, more flexibility, interoperability that also a strong argument for us to work together Sun is in a unique position, rather unique position or being the operating system vendor and the supplier of the hardware. That means, we can collaborate to be able to take advantage of a lot of these deep features been in a microprocessors and surrounding architectures. Then the third point is the Intel architecture is expanding.

It’s expanding upwards into the high end of the data centers and downwards into mobile devices, but if you’re independent software developer, thinking about Solaris now, being able to think about Solaris and conjunction with Xeon, which is the volume leader in the marketplace. It’s really important to you as a software developer. You can now take advance of the install base of the Intel hardware that’s out there from Sun and other vendors, but also focus your efforts on Solaris. In terms on Solaris on Xeon in terms of being able to find new markets for your software. In terms of Intel in the enterprise, the driving feature in the enterprise is Moore’s law. It’s been sold for almost 13 years now and Moore’s law gives us more, more transistors.

Up until very recently, the more transistors met simply higher clock speeds. That’s changed it changed in the last year and it’s going to change. I think systemically going forward to where we’ll deliver more performance, but we do it through delivering multiple cores more and more cores of microprocessors on a single chip. That leads to overall lower power requirements, lower cost but gives people more performance. That transistor budget though the Moore’s law gives us, also gives us the ability think but it is the template to put new features on to the chips. You’re seeing Intel developed things like I/O virtualization.

Virtualization of the kernel capabilities to build or run multiple operating system environments on a single microprocessor, which is been true in mainframes for long time and now is coming down to volume-based servers. Intel — from our perspective has done a good job in the last year, meeting all of our commitments in terms of new products coming into the marketplace. We’ve been at or ahead of schedule on every new server chip we’ve developed and we now have industry leading performance on 28th of the top 29 industry benchmarks for servers in terms of performance or energy efficiency of those kinds of metrics. We were the first to market with quad Core. We started shipping quad Core in the third quarter and ramp that volume up in the fourth quarter.

Now you see our quad Core products setting performance metric records out in the industry. We’re stopping Jonathan talked about a deep collaboration. That collaboration goes beyond today’s products and we’re excited about working with Sun or what we can do tomorrow, not just 2007 but beyond. We have a lot of new and exciting products coming out on the next generation Silicon Technology, which is 45 nanometers. This technology is extremely healthy at our conference call last week. We talked about Intel now, microprocessors built on this technology, booting four operating systems and for those members of the press that are interested we’re going to have a deep breathing on 45 nanometers up in Oregon next Monday.

You can talk to our PR people. If you’re interested in attending that that would be one we can actually see what a construct of this technology is like, look the fab look at the products that have been built on it. I think it will be very exciting for you. We have three fabs coming up on this technology in 2008, but I think I talked enough about the technology maybe I think it would be best now to turn a back over to Jonathan and he can tell you about why he was interested in Intel.

Jonathan Schwartz – Sun

I offered earlier in the day to allow Paul to walk you through this slide. I am, so, thinking about this. This is actually as a very natural collaboration and I want to try to convey to you how we think about our business and how you should look about the some of the strategic moves you’re going to continue to see from Sun as we go drive forward. Every business we built at Sun is independent of the others. They are related to one another, but they cannot be exclusively dependent upon one another. If all we do is built software for our own microprocessors or our own systems. We’ll by definition not be able to go after – majority of the marketplace. The same applies for our storage business.

We cannot simply attach to Sun servers or to the Sun software that obviously misses the majority of the marketplace. By definition, we’re a minority of the marketplace and we’re looking forward to go participate in as broad a market as possible. So, you can dismiss the fact that one looking at our software business, there is a very natural relationship with the volume microprocessor leader in the marketplace. Again if you look at the numbers that are out there, if you look at where people built applications. They’re building them on Intel microprocessors they’re building them on laptops and notebooks, PCs as well as servers.

So, for us, this is an enormous expansion of the market potential, because we can leverage Intel’s brand, Intel’s reach, Intel’s momentum in the marketplace that gives to our consumers to developers as well as the enterprises, more choice and more options that creates more value for Sun. In the fact that we can reach a much, much broader marketplace.

So, frankly along with the technical expertise the fact that when we hurdle together, we end up having engineering interchanges, which create value for both companies. One of the most exciting things here and I think one of the things that is, is really the story underlying all of this. Is the fact that Intel and Sun getting together around the promotion and the endorsement of Solaris changes the game in the marketplace; what was, potentially in question two or three years ago, which is what happens to Solaris. Does it suffer the same fate as some of the other UNIX is in the marketplace that issue is now off the table.

We clearly have volume, we clearly can work together with Intel to amplify that volume and not just – go look at the market as it currently is and sharing a vision of where the market is headed next to what Paul just said? The fact that we can excitedly sit down with Intel and say tell us the features you’d like us to expose through the operating system. We’re already talking about I/O virtualization as well as the next generation of network optimization of application performance. These are the kinds of things we can do working together and again that creates market opportunity for Sun, creates adoption, and momentum behind Solaris, and if there is a better leading indicator for the future of Sun’s fortune, I can’t think of it than the adoption and the proliferation of Solaris.

So, tell us this is a very natural relationship, we’re very appreciative of the work that the Sun and Intel teams have been doing over the past 6 months as we tried to figure out or how is it we worked together. I think we have had a bit of an ebb and flow in our relationship and I think we’ve only been detecting flow in the past 6 months and I think we want to continue seeing that go forwards, so again this is to us, this is a historic moment. This definitively changes the game in the operating system landscape, changes the market opportunity for Sun gives developers that want to use technologies from Sun as well as from Intel new choices, new opportunities, new performance, new economics. The fact that we can give more choice to customers that ISV’s have a higher volume platform now to plan. There is just a tremendous opportunity both for the Intel side as well as for the Sun side.

So, we can do what we do best and in concert with Intel’s obvious strength and volume, and brand out in the marketplace. We can combine forces to really go after a next ways of opportunity. So, again, I don’t think we could be happy with the relationship, more expectant of the benefits. This is going to bring to us and to bring to customers ultimately at the end of the day. It’s all about them any ways. So, with that why not I turn it over to Russ and maybe we’ll field some questions.

Russ

So, we’ve got some folks moving around the room here with some microphones. So, in just a moment, we’ll start, but I’ll do have to ask you or we’re going to be online on the web, so I need to identify yourself and the company you’re with, so that people listening in and can also get that information and with that it also if you like to direct your questions to either of these two, just let us — let me know. So, with that I think we’ll start.

Tom

Hi, Tom Sanders (Inaudible) where will the Intel processor sit next to the AMD line?

Jonathan Schwartz – Sun

Right next to it; different boards.

Paul Otellini – Intel

Yeah, probably different boards; haven’t got on that level of collaboration yet.

Tom

I mean is it going to be — can I choose between a Intel skew and an AMD skew for the identical system or what is it going to look like?

Jonathan Schwartz – Sun

So, I guess two things, one, I’d refer you to John Fallow (ph) and he can talk about specifics of the segments we’re going after. The end of the day, customer will define that. The customer will determine what they want to buy from Sun and what the underlying infrastructure needs to look like? That applies by the way to software as well as hardware because we do an awful lot of business out in the marketplace now, satisfying Window’s demand as much as Linux’s demand.

So, that’s not so much a grand strategic plan about how we carve up the market that’s really a – let’s look at the marketplace let’s go figure out where Intel innovation really creates new opportunity, let’s go after that.

Ian Kinfer – Bloomberg News

Ian Kinfer; Bloomberg News. Jonathan. you mentioned number of facts is one into your decision, but all other the things you said about Intel is pretty much always been true of the Intel in terms of scale, size, power in the marketplace, so why now would be the question place.

Jonathan Schwartz – Sun

Well I think a few things, number one the fact that Solaris was growing as rapidly as that has not always been true. I mean go look at the chart is just been a rocket ride up into the right that changes again. Secondly our server business has been growing double digits and that’s over the past four consecutive quarters on the spot side, triple digits on the x64 side. Frankly I think we’re different company in were obviously coming at this relationship in a very different way.

Thirdly, I think there has been a change in our view of the marketplace and how we want to go after it, maybe leaving some of the rhetoric of the past behind us. Again, one of the first calls I made having gotten my shiny new job was to call Paul and say, “what can we do together?” because clear — of course, we’re going to compete we’re both very large companies. We compete with almost everybody in the marketplace, but where can we go collaborate to create value for both companies, so again this is an either/or relationship for Sun. This is very much in an relationship. I think it is also a reflection on time and place, but maybe I’d also ask Paul to respond to that.

Paul Otellini – Intel

Sure. From our perspective, this is not just a chip deal, that’s certainly is what we’re all about and is important to us from both the credibility standpoint and the commercial aspects of the relationship, but it is not insignificant for us to commit to endorsing Solaris. This means we’ll put deep engineering on it, we’ll put field resources on it and that is from our perspective not just because I like Jonathan, but I think it’s a really good commercial opportunity for us. The install basis Solaris in a lot of places where Intel is not in some cases. Financial services and telecommunication are two markets where Solaris is very strong there being able to offer an optimize environment on Solaris, on Xeon into those marketplaces, make sense for us and it goes beyond the traditional chip sales aspect of the collaboration.

Speaker

The questions (ph) seem to be very quick.

Merv Adrian – Forrester Research

Merv Adrian from Forrester. Can you give us a little color as to when you think you’ll start to ship systems. You said this year, but can you be anymore specific; you think it’s year end, you think it is going to come any quicker on that?

Paul Otellini – Sun

We’re shipping right now; Solaris running on Xeon – go to Sun.com/solaris, get it downloaded, run it. It runs well; it will only run better. And for the specifics of when we start shipping Intel systems, I guess I’d defer to John, late in the first half of 07. Can’t you do better than that John?

Stephen Shankland – CNetNews.com

Stephen Shankland from CNetNews.com. In the past, you guys have been concerned about keeping a cap on your R&D budget; clearly this increases the amount of R&D. You’ll have to do engineering; you’ll to do hardware and software qualifications and certification. I wonder if you can comment on how much of a difference this is going to mean to Sun’s business also in terms of – would just take some supply chain — are you – presumably you think it is going to be justified, but how important is that factor and are you going to be getting any help in those activities from Intel?

Jonathan Schwartz – Sun

Yeah and in fact just to the beginning part; this, is in our view, actually lowers the expense because now we’ve a collaborator who is willing to work with us to court and cultivate and invest in the success of the ecosystem. So, this is a way of making R&D much, much more efficient. We can do what we do best and really now work with Intel to make sure that they can bring all that Intel has to bear against ensuring the success of Solaris. I think the way we look at R&D, we’re not interested in – nor is Paul for that matter in capping R&D. We are interested in the return on R&D.

And so long as we can get a return, we are interested in amplifying that to the extent certainly possible. And I think this is a way of ensuring, we get a better return for the R&D we are doing. Again, Solaris just running on Sun — on SPARC Systems or just running on AMD systems misses the majority of the marketplace. We want to go after the majority of the marketplace. Sun simply delivering SPARC Systems or simply shipping AMD systems misses the Intel opportunity. We want to make sure we can participate in both equally. I think one of the unspoken assets that Intel has is, they got a big software team.

They know an awful lot about software; and the fact that we can get together to optimize Java, we can optimize Net means that we can optimize Solaris; makes their systems look better, makes our operating system look better, makes the overall customer set happier — that’s all goodness as far as I am concerned. And again, I don’t know if you want to add to that.

Michael Singer – InformationWeek

Michael Singer with InformationWeek. Talk about your — you might have alluded to it before, but what were the previous barriers, because both of you had guiders before you took your posts that had a different relationship than you two have today. What was it that broke down those barriers and for you Jonathan and then for Paul? Was it just that you had a new opportunity with Sun that allowed you to take that choice to make this decision today or can you kind of, give us some call on that?

Paul Otellini – Intel

I think it was a bottle of Barolo at Delfina; I think that really – really good bottle.

Jonathan Schwartz – Sun

You know leave history aside, we think — and I think what motivates both of us is, we think there is opportunity – let’s get busy – let’s get after the opportunity. And what do you got, what have we got, how do we put it together in ways that goes off and creates value. So I think, we’re both looking forward and looking at customers — and by the way, just talk to any customer out there; no one could possibly think that this is anything other than a brilliant partnership; all these does is create options and choice for them.

Paul Otellini – Intel

One of the things I think is interesting to observe is that we are coming together at a time when both companies had very positive momentum both in the market and in our products; a momentum behind Solaris, we had a momentum behind the double-digit growth in servers, momentum behind Intel’s new product lines and so forth. And I have always thought that momentum breeds momentum; and the idea that we could get — the two of us working together, could only multiply as what we could have done independently and that was the principal reason for me to really want to do this.

Audience Member

So Jonathan, you’re going to start releasing Dual Processors, Xeon Systems in the first half, which is pretty soon. How long have you actually been developing these systems and also can you comment on when you expect the 4P and uniprocessor systems to come; but basically when did you start working it? How long has this been under cover?

Jonathan Schwartz – Sun

We – and again just so you think about — we don’t take the team that’s working on these systems and have them completely segregated and isolated from every other team at Sun. We have really deep systems engineering expertise; and frankly, the fact that they were only working on SPARC – you know, microprocessors, under-leveraged the talent they had that could enable us to get into new markets. So we have a unified systems team at Sun that builds all the systems we build.

So, in that regard, along with Solaris, which is obviously more than two decades in evolution, we’ve been working an awfully long time in the same space. The question was, when were we really going to commit to build common products. And I think that relationship has been going on for a while, because we’ve seen one another in the marketplace so often.

So I don’t know if I could put a specific date on when did we actually sit down and say okay, what are the aspects and performance and in-outs and how do we go make this — just didn’t work that way. And in terms of the specific ship dates, I am not going to give that to you. You’d give it to the other guy. Yeah, it was a good try still. But again, I’d like to remind you, Solaris runs beautifully on Xeon, is available at Sun.com/Solaris.

Rush

I guess Michael.

Michael Singer – InformationWeek

On the software side, obviously Intel is adopting more the Solaris, but Jonathan talk about Intel software business, and what are the sort of gold nuggets within say TBB or BePro (ph) or what are the things that you’re looking forward to sort of enhancing that you may not already have in Solaris or NetBeans or Java for that matter?

Jonathan Schwartz – Sun

Are you asking him or me?

Michael Singer – InformationWeek

You.

Jonathan Schwartz – Sun

Let me give you a very simple example. Virtualization in a chip is less interesting if it’s not exposed by the operating system. If the operating system doesn’t know how to deal with it or leverage it or take advantage of it that makes the overall systems package less interesting. If we can synchronize and coordinate our releases around virtualization, whether it’s application virtualization, OS virtualization, or network virtualization, that’s only upside. I was with a customer just last week, who is in a very, very high scale and very high value environment, and one of the points they made, which was I think similar to the point that Paul made, is we’re the only company in the marketplace today that delivers both the operating systems and the underlying system infrastructure, the only one.

Now, a few years ago that was viewed as a deficit that was a bad thing, because that wasn’t the future. Well, now the fact that we can coordinate our releases and work with partners to make sure that we sit down with Paul’s team and say, what’s coming up and how can we help you amplify it in the marketplace, that adds value to them and also adds value to us. That applies across Solaris as well as Java. I mean again, to really understand the Sun model, we want Solaris to absolutely scream on Xeon, to blow everyone else in the marketplace away.

Paul Otellini – Intel

If I could just jump in there. The two other areas I think would be interesting, at least from our perspective. Solaris being able to take advantage of Intel’s I/O acceleration technology for the whole I/O part of the system to run faster. Demand based switching, so we can move task back and forth very quickly, exposing that from the hardware to the operating system would be very interesting to us.

Jonathan Schwartz – Sun

Ultimately, if we do a better job of optimizing Solaris on Xeon, because we can, then that means it’s going to win in the marketplace, but we want to present customer with choice, we want to do what we can to amplify the best of everything we build.

Rush

Steven.

Jonathan Schwartz – Sun

Don, you’re silent back there, what’s going on?

Don

Happy to yield the mike down.

Jonathan Schwartz – Sun

I read your blog, I can start asking you questions now. So Don, what do you think of the deal?

Don

So, where do you see now SPARC and Itanium competing in the future, how do you divide the x86 line from the SPARC line, and in your case, Paul, the Itanium line?

Jonathan Schwartz – Sun

We don’t divide it, we try to go after as much market as we can, but these are loosely coupled than highly aligned business, and so we want to see Solaris succeed on all platforms on which it ships. The fact that we’ve got four consecutive quarters of growth behind us suggests there is more than enough opportunity across all the disparate product lines. We want to go after all the opportunity and not just isolate ourselves to one.

Paul Otellini – Intel

I guess for my perspective, the very positive part of this relationship is the ability to work together to get the Xeon based systems greater than four, up and running, and delivering really good results into the marketplace. Sun is a good company to collaborate with from that perspective. I think it will be the wrong thing to do to reopen the religious war or Itanium. Itanium is a separate product line right now, Solaris does not support Itanium. If they decide to support it, we’d love it, if they don’t, that’s just business decision on their side.

Russ

Steven.

Steven

So, related question, which is big-iron on x86, it’s something a lot of people have tried for a very long time, Sequent, all these companies that have vanished into the midst, and it’s something I guess really, IBM is the only enthusiast for, do you think that Sun is going to be the company that finally gets big-iron x86 to break out, Paul?

Paul Otellini – Intel

Gosh, I hope so, but…

Jonathan Schwartz – Sun

He meant to say yes.

Paul Otellini – Intel

The reason I said that is, is that there are other customers working on 8 and above Xeon as well, not necessarily in this country, so you probably don’t have as much visibility to them, but we see that happening elsewhere. I think that in — if you look at, from our perspective, a snapshot or a side view of the Solaris marketplace in terms of some of those very critical mission, mission critical markets and data intensive markets like financial service or Telco, well, the thing is it has to be reliable has heck, that allows us to get Xeon into the space where it isn’t really today.

Jonathan Schwartz – Sun

Maybe then to give you more confidence in that, the single biggest determinant of the success of a high scale x86 system will be the popularity of the operating system that runs on a single socket x86 system. You cannot start by saying I’d like to build a 16 way x86 system, and oh, I would probably need an operating system. No one starts their business on a 16 way system, they all start their businesses and they all start their projects on one way.

So, the fact that we can show up in the marketplace with a one socket system that — I mean again, this is the recipe we know well. What’s led to the success of Sun Systems business is the fact that we’ve had complete binary compatibility up and down the product set. So, the fact that we’re going to be in this space with our own systems, and by the way with an operating system that eats threads for lunch and scales beautifully, should give us a little bit of a boost that maybe some of the other players haven’t had.

Russ

So, I think I’m going to have one more question here. So, if anybody would like to be the last questionnaire, that would be great, if not, we will end early. Michael, give it another go?

Speaker

No question Duncan.

Audience Member

So, the last question is on Service Oriented Architecture, SOA. We’ve heard about writing to the chip, writing to the OS, we write to the SOA stack, so what is it that you now bring to the table, Paul, that wasn’t previously already there with the current processor systems that you have in place Jonathan?

Paul Otellini – Intel

I’m sorry, what is it, that we bring to the…

Audience Member

Yeah, what is that you’re now bringing to SOA that Jonathan couldn’t do already?

Paul Otellini – Intel

Well, on his SPARC side, he’s been doing it for sometime. On the x86 side, I think we’re very comfortable with our first implementation, a visualization. We’ve a second instantiation of that coming down the pipeline that I think is substantially better than the competition. We have other things I talked about earlier in terms of I/O Acceleration, demand-based switching. The terms of the ability for us to use the advance silicon technology we’re about to deploy, to deliver not just performers, but energy efficient performers, leadership, makes the end systems better. SOA isn’t just what it does, its how it does it and how much does it cost, and we think that we help that whole equation in terms of power performance.

Jonathan Schwartz – Sun

Just to amplify what Paul said that, the single biggest issue with SOA in the marketplace — and look SOA is a horrible buzzword, and we can all agree that it represents something, but no can quite identify what it is. The single biggest issue in the data center, just economics, brutal efficiency, environmental capacity, that I think is — that’s become the dominant issue in large scale enterprises, that’s very different than developer productivity, where obviously we’ve been making a lot of progress with NetBeans and the Java platform.

So, I think just ending here, I want to thank Paul specifically and also especially the Intel team. This has been a long time coming and I know there’s been a lot of hard work that’s been put into it. We are thrilled to death with the market opportunities. We’re both going to go evolve and couldn’t be happier with the progress we’ve made to date, and couldn’t be more excited about the progress we’re going to make in the marketplace. So, thank you all very much.

Paul Otellini – Intel

Thank you.

Jonathan Schwartz – Sun

It is much appreciated.

Paul Otellini – Intel

We iterate that from our side, thank you.

Jonathan Schwartz – Sun

Good.

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  1. February 3rd, 2007 at 15:10
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    About http://www.podtech.net/home/technology/1944/sun-and-intel-ceos-announce-new-agreement

    I think that People will benefit from The Solaris 10 OS on all systems prosessers.

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