Maybe, Savio. Don't forget your IBM bias in this post. IBM has never been much of an unbiased commentator on Sun....

Sun's software revenues grew by 13% in the last year. That's based on giving it all away. The question for me is whether it can find more software to give away, as it were. There's not much margin in hardware (look at IBM's numbers - what would IBM be without its software business?). I think Sun needs a stronger software story.

Come on Matt, I work for IBM, but I've been complimentary to Sun, Microsoft, Oracle, etc. more than I've been negative.

I have no axe to grind. None of Sun's products truly compete with products from the division I work in.

Do a search for "Software" in either of these Sun documents re. 1Q08 and you'll find the term 'software' show up once. Software isn't a focus for them and it shouldn't be.

http://www.sun.com/aboutsun/investor/earnings_releases/pr/fy08q1/index.html
http://www.sun.com/aboutsun/investor/earnings_releases/Q108_SLD.pdf

Re. the 13% 'software growth in the last year'...I am willing to bet that most of this is Solaris, Identity stuff or storage software. It's not general purpose software like app servers, tooling, databases, etc.

Sun's gross margin was 48% (see pg 3 of the PDF linked above). While it's true that commodity hardware isn't a hugely profitable business, the Servers that Sun sells are not of the 'commodity type'. BTW, IBM's hardware business had gross margins of 38% in 1Q07.

Just because IBM is stronger because of its combination of hardware, software and services, doesn't mean it's a model that can be easily replicated. HP tried it nearly 10 years ago. Sun could learn from HP and play from a position of strength in the Server (& Storage) business.

Savio "my thoughts, not IBM's" Rodrigues

Its not easy turning a battleship around, and I think thats what we're seeing. Sun is still trying to align itself to the pure-play-OSS modelon the software side.

Give it time. Seeing positive growth numbers like this is good, but I don't think we're seeing what they can do with all cylinders firing.

Keep in mind as well, they may be damaging the market more than they're reaping, at the moment. ie. Buyer would rather spend a rational(smaller) amount on Sun middleware support than go to IBM and sell their soul to software licensing and a bus-load of consultants. (IBM's "services" wing DOES seem to grow exponentially every year, right? ;-)

Roy, I used to wonder about you point about 'damaging' the market. To a degree, I'm sure that is a possibility.

But you can see from our SEC filings, that selling commercial software that customers value is a lot easier than giving away software that wasn't successful in the market to begin with.

We don't sell consultants by the bus-load. That is a lie and you know it. Our consultants, like beer, come in packages of 6. ;-)

Savio "does not represent IBM views" Rodrigues

It's really disappointing to me that Infoworld has to stoop to giving IBM a microphone to comment on Sun, and then call it journalism. You guys have lost your credibility in my book

Mr./Mrs "shame"

This is a blog, it's not journalism.

Every person that blogs and works for a company is going to have biases. Heck, even reporters have biases. I do my best to keep my biases out of what I write. I don't claim to be perfect on this point.

Read some of my other posts and tell me that you think I am overly positive or negative on one vendor or another.

Feel free to email me at savio13@gmail.com if you'd like to discuss further. I would have emailed you directly if you'd used a working email.

Savio
IBM employee with personal opinions.