January 31st, 2005
Sun's Schwartz: (free) Google and Yahoo are major signs of things to come
In issue #8 of ZDNet’s IT Matters series of podcasts (download the MP3, or learn how to have them automatically downloaded while you’re sleeping), Sun president and COO Jonathan Schwartz lays out his vision for utility computing, why Sun’s $1-per-CPU-per-hour pricing has no choice but to trend down towards (maybe to 50 cents next year), why services built on utility grids will trend to be free, and why Google, Yahoo and eBay are examples of how we’re actually already there. More importantly, Schwartz describes the business model behind Sun’s thinking and why, in the long run, the usage of shared grids like the five geographically distributed facilities that Sun is putting into place will make Sun more profitable than it ever could have been as a company selling boxes. Here’s a sampling of what he said:
Regarding what’s being announced today, Feb 1, 2005:
The broadscale commercial availability of computing for $1 per CPU hour
On what options are open to companies that don’t want to outsource to a shared grid:
Grid on a Skid. Specify how many CPUs you want and we’ll just back a truck up to your loading dock.
One reason this will help Sun’s return to profitability and success:
It’s much much less expensive for me to service all of my customers from one facility than it is to send a service team out to 4,000 different customer locations.
Why history is repeating itself:
If you look at the history of electricity, people built their own generators. The problem of moving to the grid was a cultural one, it wasn’t a technical one. It was a process of agreeing on what the standard plug formats would be and what the voltage and cycle standards would be and then the process of conveying to an awful lot of people who were in the electricity management business with titles like Chief Electricity Officer that they didn’t want to be in that business. They just wanted to be buying the service called electricity.
What hour glasses and grids have in common:
Anytime a user is sitting in front of their PC and sees a wait cursor, that’s an opportunity for work to be done by someone else’s computers.
Where Yahoo and Google have been, others will follow:
No one pays for search anymore. The same thing will happen to operating systems and other applications. You’ll just have the same services available on all your devices (computers, phones, settop boxes, etc.)
You think you’ve seen convergence? You ain’t see nothing yet:
Such an evident and obvious convergence is occuring between the media industry, the telecommunications industry, and the information technology industry that we should already get really comfortable with a common and collective business model where words like free and infinite right to use are going to become much more commonplace. The industries are converging. We may as well just own up to that.
Schwartz on HP:
At this point, it doesn’t have the sustenance to be able represent to a customer that [its enterprise systems business] is anything but an appendage to an office supplies company.
Schwartz on IBM:
To me, it’s a little half-hearted to say that customers don’t need indemnity, but here are some patents to protect you. That implies that you’re getting value from something that I thought IBM said you didn’t need. I think they’re going to come full circle on that. I think they’re going to be forced to do so.
Think that’s all he said? Get the MP3.
