Oracle to scale back Sun server line, make other changes

Oracle will pare back Sun Microsystems' server lines and move to a build-to-order model to cut costs and get the hardware company back to profitability, Oracle executives said on Wednesday.

At the same time, Oracle pledged to continue investing in key Sun technologies, including its T series servers, based on Sun's multithreaded UltraSparc T processors, as well as Sun's Solaris OS and the M series servers developed jointly with Fujitsu.

Sun currently lists around 60 server models on its Web site, from single-processor blades up to high-end, 64-socket machines for running large databases. Oracle plans to "significantly" reduce that list, said Cindy Reese, senior vice president for Sun's supply chain operations and now an Oracle employee.

She didn't give specifics, and Oracle has said it will follow up with customer webcasts to provide more detailed road maps. But Reese said Oracle has already reduced the number of products on Sun's price list by "50 percent."

She spoke during an event Wednesday at Oracle's Redwood Shores, California, headquarters, where Oracle is discussing its strategy for integrating Sun.

John Fowler, the head of Sun's systems business who now works for Oracle, said the plan is to offer a more limited set of servers that will address the needs of large enterprise customers. Oracle will also make Sun's 7000 ZFS storage appliance the preferred system for use with Oracle's applications, in all tiers of the data center, he said.

"We’ll focus the product set on the best intersection with those enterprise needs, as opposed to offering every size, model and version of servers," Fowler said.

"We're not too interested in the commodity Windows x86 market, we'll let Dell do that," he added, though Oracle will continue to sell some of Sun's x86 servers.

One of the goals is to bring some standardization to the hardware and software combinations used by Oracle customers, which Oracle says will allow it to provide better support. Oracle will offer to monitor Sun's hardware systems remotely, as it does for its own software, which Fowler said would allow it to diagnose faults more quickly and give better customer support.

Executives here sketched out a vague road map for upgrading Sun's server processors. Oracle will release the third generation of Sun's UltraSparc T processor later this year, with twice as many cores, better floating point performance and a larger cache, said Mike Splain, who was senior vice president of Sun's microelectronics group.

Future chips will have new cores and higher clock frequencies, he said, though he didn't give release dates for those products. Oracle will also update Sun's M series servers with faster chips in "the next 15 to 18 months," Splain said.

The executives didn't say how much money Oracle hoped to save moving to a build-to-order model. It means orders for servers will be sent straight to factories, and systems will be shipped from there directly to customers, instead of being held in distribution centers awaiting purchase, Reese said.

That will allow Oracle to cut costs by closing two distribution centers, in the U.S. and Europe, she said. It should also reduce freight costs, because servers that are held in distribution centers and don't get sold won't have to be shipped back to factories to be updated with newer parts.

One of Oracle's goals Wednesday is to stem the migrations to non-Sun platforms, by customers worried about the future of Sun under Oracle.

"For all those on Sparc today who have been reading lurid press clippings, we're investing in Sparc and we will maintain forward binary compatibility," Fowler said.

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