Sun's storage plans still fuzzy

Industry analysts remain skeptical of Sun's ability to integrate StorageTek, and are unclear on the company's roadmap and direction.

Sun Microsystems Inc. has yet to articulate a clear message to the market on its strategy and roadmap for storage, according to leading industry analysts.

In our latest Strategic Vendor Series, Arun Taneja, founder and analyst with the Taneja Group, and Tony Asaro, senior analyst with the Enterprise Strategy Group, claim that Sun's plans are esoteric and long in the tooth.

Sun announced its plans to acquire StorageTek (Storage Technology Corp.) for $4.1 billion in June. Probably one of the most confusing messages the company has tried to convey since then centers around identity management. At this week's StorageTek user forum, Sun is expected to unveil storage encryption technology, which may shed some light on its security plans.

For the lowdown on Sun's position in storage, read the following interviews with Asaro and Taneja.

Where is Sun strongest?

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Arun Taneja: Sun has finally filled out its storage product line with products based on Dot Hill [Systems Corp.] technology at the low end, their in-house designed 6920 for the midrange and HDS [Hitachi Data Systems]-supplied products for the high end. For the first time, Sun at least has a complete storage product line to offer to its customers, even if it is not all from their own R&D [research and development]. Their primary strength is that they are a supplier of complete systems, including server, OS, systems software and most peripherals. When you have this much presence with the customers, you don't necessarily need the best storage product line. You need a decent product line, not necessarily the best of breed in everything. The customer is predisposed to buy from you already. That is why it is tragic that Sun was losing so much storage to EMC [Corp.] and HDS when their storage was being attached to Sun servers. In any case, the fact that Sun has a huge presence within the largest accounts in the world is indeed their strongest suit.

Tony Asaro: From a storage perspective Sun has really come a long way. They have an excellent set of storage system products. Sun also has best in class storage management software with AppIQ [Inc.], now HP [Hewlett-Packard Co.], at its core. From a business perspective they have a large number of customers that they can sell additional products to. Sun has a wide range of products providing software and hardware value.

Where is Sun weakest?

Taneja: Sun's e-mail story is poor, archive story is poor, and they have no equivalent of EMC's ECC. It's hard to make three different product lines to feel like one from a management point of view. They had a poor sales force prior to StorageTek acquisition and until recently, still thought the battlefront was servers (I am still not sure if culturally they have made the transition).

Asaro: The fact that Sun is an OS and server company means it is often perceived as just that. And there is some merit to this perception since Sun's heritage is in Solaris. It is both an external and internal challenge for them. Storage-wise, Sun is not taking the world by storm with its NAS products. Sun needs to have something that is clearly competitive and not mediocre. Also, Sun lacks in the CAS [content-addressed system] arena. They now have StorageTek's IntelliStore that was just recently launched. However, it doesn't appear as if Sun has figured out yet how it fits into the overall strategy, especially with Honeycomb in the works. More importantly, Sun Storage seems to have no strong strategy for go-to-market. Sun has this newly acquired storage sales force from StorageTek but with no proven track record for selling disk-based storage systems.

What do you make of the company's recent acquisition of StorageTek?

Taneja: I like the acquisition since it gives them a solid storage sales force, but I am concerned about the tape background of StorageTek. Tape's role is changing rapidly, and StorageTek has been learning the disk game fairly well, but these types of transitions are hard, even without the stress of mergers. If Sun were smart, they would learn from StorageTek and not act as conquerors. If they do, they will lose all the good StorageTek people. Sun has never done a merger well. If they do not do this one well, in my view, there wouldn't be a need to do another one.

Asaro: At this stage, it is still a big question. When the acquisition was announced, it wasn't as if the market was excited at the possibilities. There is a real potential for failure since acquisitions of this size often result in culture clashes and politics. That said, StorageTek has an excellent reputation with high-end tape libraries and a billion dollar services business. Additionally, the merger positions Sun as an end-to-end solutions provider from servers, to storage and now tape. They can have conversations with customers on both the server side and now on the storage side that EMC cannot. Finally, Sun now has a $4 billion dollar storage business.

What is Sun's strategic direction?

Taneja: At the moment, it looks like stemming the tide and recovering some market share back would be heavenly. I haven't seen anything truly strategic on the storage side yet. But frankly, all they have to do is increase their attach rate to their own servers by 50% and they will be home free, from a storage perspective, at least for a while.

Asaro: I asked them that question, but I didn't really understand the answer. I know they want to do more with integrating applications and storage, which I agree is where things have to go. However, a strategy should have a clear roadmap from a product and business perspective with short and long-term goals. I will say this: More than ever, Sun has a great suite of storage products and a good team focusing on storage. I would like to see Sun put a real stake in the ground and clearly articulate achievable goals for the near term, and a vision for the future that is not esoteric.

Where does Sun have an edge over its competition, if at all?

Taneja: They have a good presence in the accounts already. They do not have to cultivate new accounts, they just have to get more of the customer's "IT spend." This is their strength versus EMC and HDS, not HP or IBM.

Asaro: Sun has a wide range of storage products that are very competitive. At the high end, it has leading HDS enterprise-class storage systems. Sun also has a great midrange storage system that supports storage virtualization. The StorEdge 6920 eclipses many other leading midrange solutions in terms of processing power, cache memory support and its ability to manage external storage systems. Sun also uses HP/AppIQ for its storage resource management, which ESG considers best-in-class. The StorageTek tape libraries are a leading solution and the customers I speak to are very happy with them.

In which markets is Sun most challenged in terms of growing its market share?

Taneja: Sun needs to change in fundamental ways. I have never seen that happen when the top guy who created the culture is still guiding the company. [Scott] McNealy is a great guy and an excellent leader. He has done wonders for the company. But if he stays at the helm through this period, little real change is likely to occur. He always used DEC [Digital Equipment Corp.] as an example of how a company should not be. Well, Sun has become the DEC of the industry. The only way that will change is for someone new to come in and make the necessary changes, unencumbered from the past.

Asaro: It is difficult to see how Sun will address the SMB [small and midsized business) market. Small businesses are very Windows-centric, they have little brand awareness and Sun's channel is not focused on this area. Also, Linux will become a major issue in the foreseeable future and the implications of that could be quite profound on all of Sun's businesses.

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