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BOSTON -- With rumors of a takeover by IBM swirling around him, Sun Microsytems' chairman Scott McNealy tried to pitch a room of customers this week on the idea that Sun is a wily innovator whose software and hardware are far less costly than proprietary solutions from Oracle and, yes, IBM. But McNealy had little to offer loyal customers with Sun's legacy Sparc hardware.

For more on Sun Microsystems:
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McNealy touted Sun's vision of cloud computing and the folly of "best of breed" to about 200 customers and partners. "Frankenstein was best of breed, and every time he keels over, IBM comes in with $100,000 shock paddles," McNealy said. Sun's goal "is to get you out of the kitchen. We build data centers; you do whatever you do," adding that "building a data center out of 40 different parts is last year's strategy."

Open source gets a plug
Like the man who succeeded him at the job of CEO, Jonathan Schwartz, McNealy also loudly beat the open source drum, but in his own inimitable style. Open source code is less buggy and more stable than proprietary code and insulates companies from the "shelf-life-of-a-banana problem" in which technology becomes obsolete 18 months after it was released.

Sun's goal, said McNealy, is to "get you out of the kitchen."
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And because the code is available for all to see, open source software such as Sun's MySQL offers a "low barrier to exit." Compare that with Oracle's database and applications. "We all know the first hit of heroin is free -- in fact, Oracle will probably pay you to roll up your sleeve," McNealy said. But sooner rather than later, your data is trapped in proprietary Oracle databases, and "contract negotiations become contract explanations."

But while McNealy cast open source as a good thing for customers, he was less convincing about how open source might benefit Sun.

"The problem with Sun is that we don't have any switching costs," he said, and as a result, "we have different margins" from those of IBM and Oracle. For proof, McNealy relayed a conversation with the CIO of a former Wall Street Bank who was skeptical of Sun's "no-switching cost" claim. "I asked him, 'How much did you used to spend with us?' And he said, '$150 million.' Then I asked him how much he spent last year, and he said -- all proud -- 'Nothing.' So I went to the corner and threw up and came back and said, 'See, no switching costs.'"

Nor did McNealy have much to offer the dedicated Sparc customers in the audience. One customer, a self-described Sun supporter, told McNealy than he was trying his hardest to "keep Linux out of my data center" but that "when I see the exorbitant prices for memory on my Sparc systems, I cringe." McNealy's advice? Run OpenSolaris on x86. "That should help focus your sales rep on aggressive Sparc memory pricing."

Similarly, another customer complained that he was having a hard time convincing his peers about the validity of Sun virtualization technologies like logical domains, or LDOMs, and Containers. "The way I figure, this will save me thousands -- maybe hundreds of thousands -- but when I tell people about it, they've never heard of it."

McNealy acknowledged that Sun's reduced status in the marketplace meant that it didn't have the funds to launch big awareness campaigns with the Gartners of the world anymore, and that most press only reported stories about Sun's poor financial standing. To get the word out about its technology, "we have to rely on word of mouth."

"It's a struggle," he said, "but we'll get through it. On the bright side, we're getting a lot more press lately."

Let us know what you think about the story; email: Alex Barrett, News Director.

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