Sun does streaming video (IPTV)

Sun is following through on its strategy of building systems for service providers in the new world of web2.0, SaaS and communications over IP- a trend CTO Greg has called Red Shift (see video Redshift: The Explosion of Massive-Scale Systems by Greg where he walks you through this shift.)

Jonathan Schwarz has argued in several of his blog posts (including The Glamor in Mass Transit) that service providers need systems that are brutally efficient and scale to deliver these new services.

...datacenters are increasingly pining for high performance buses - infrastructure optimized for utilization, efficiency, and overall performance, not just simple component speed.

It today launched Sun Streaming Video system that provides 10x the capacity of existing platforms at 1/2 the cost, claims Sun.

Designed by Sun co-founder Andy Bechtolsheim, Sun's cutting-edge systemdesign enables the Sun Streaming System to support up to 160,000 simultaneous, unique video streams at the rate of 2Mbps and a price of less than $50 per stream for complete video headend -- which is approximately 10 times the streaming capacity of competitive platforms. Thirty-two integrated 10 Gigabit Ethernet optical networking ports combine multiplexing, switching and routing all in one high-density video streaming package.

Sun did not report a good quarter yesterday, loosing 10% of its stock value in one day. However, if it is able to execute on its RedShift project- the future may look sunnier.

Sun winner as IDC validates Jonathan Schwarz's Bus Metaphor

As I wrote in a recent post The comeback story of Sun, Sun seems to have made some good solid bets in hardware and they seem to be paying off. Jonathan Schwarz recently wrote a post on the move towards bigger servers entitled The Glamor in Mass Transit. The latest IDC report on servers confirms his core arguments. Here are some excerpts from the IDC release:

According to IDC's updated forecast, multicore and virtualization will cost the x86 market more than 4.5 million shipments and $2.4 billion in customer spending between 2006-2010. Overall, x86 shipments that were once projected to increase 61% by 2010 are now facing just 39% growth during that same period.

Other highlights from this study include;

• Server revenue growth rates will be lower in comparison, but are reduced to a lesser extent than shipment growth rates as customers deploy more richly configured systems in terms of memory, disk, and I/O to balance the increase in processing and server utilization.

• Despite the decline in the number of physical shipments, over the forecast period, growth in the number of effective processors continues to climb at a 25% annual rate due to multi-core technology advances.

• The number of virtual servers rises dramatically at a CAGR of 40.6% during 2005-2010 so that by the end of the forecast period, more than 1.7 million physical servers will be shipped for virtualization activities resulting in 7.9 million logical servers. This represents 14.6% of all physical servers in 2010 compared to just 4.5% of server shipments in 2005.

The big winners of this trend would be companies like Sun and VMWare. Software vendors for database and storage servers could also benefit as the number of effective processors continues to grow at 25%. This is one reason per core pricing may be here to stay.

The comeback story of Sun

Many in the tech world including myself had written Sun off as a real player. They were a dieing company selling ever decreasing number of expensive boxes to people that still had to because they were locked in. Java, a distribution success, never contributed financially to Sun's bottom line in any meaningful way.

Over the last 2 years, things seem to have changed slowly and now we may be getting close to the Tipping Point- as Jonathan Schwartz points out on his blog. The increasing stock price, still low from 5 years ago has shown some strength lately. But it is the re-appearance of Sun into the dialog on future of computing especially for the customers with large infrastructure that has me most optimistic. In addition, the company has embraced open source, perhaps out of necessity, but has finally open sourced key components such as Solaris and Java. The hardware business is still the meat and potatoes of Sun, and it is not yet clear if their software strategy will work.

On the plus side, Jonathan Schwarz's blog is probably the best CEO blog in town toay. He is not just marketing the latest widget (Blackbox!) but actually talks about substantiative issues facing the company and its customers.

I think we may be seeing another Apple like comeback story here. The focus on identifying big trends (hosted computing, power issues) and focusing the vast resources of a tech giant will result in some very interesting products over the next many quarters and years. And the fact that Sun already has revenue exceeding $13 billion would make it a very compelling turnaround when it tips over. The fact that KKR has invested $700 million is perhaps an indication that the good times are close. The large cash balance and the additional cash raised certainly makes one think that Jonathan may be looking to make some big acquistion moves. This is surely an interesting time to follow Sun- a company I had given up as dead many years ago.

Welcome back, Sun.

What do you think about Sun's comeback? Is it real? Do you think they will buy other companies?