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Chronicles

The story behind the story

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Sun Plans To Close Its Data Centers

For a company that sells and manages servers, Sun Microsystems is in the midst of an unexpected move: getting rid of its own server farms.  —  In a blog post Thursday, Sun's (nasdaq: JAVA - news - people ) data center architect, Brian Cinque …

Forbes Andy Greenberg

Context & Ripple Effects

Sun's announcement lands two years after its very public data center meltdown of late 2005, when the company's own server farms were held up as evidence that even the biggest buyers were drowning in underutilized iron. Since then Sun has rebuilt the argument: it launched the Xen-based xVM virtualization platform at Oracle OpenWorld in November 2007, supporting Windows, Linux and Solaris guests, and signed Dell to distribute Solaris 10 on PowerEdge servers.

Against that backdrop, Thursday's blog post from data center architect Brian Cinque — confirming Sun will close and dispose of its own server farms — reads as the company drinking its own champagne: the vendor that sells servers and manages them is collapsing its own footprint with the same consolidation story it pitches to enterprises. It follows a stretch of reinvention around software identity, including the retirement of the SUNW ticker for JAVA in August 2007.

First-order effects

  • Sun's internal server count drops sharply as its own workloads are consolidated onto a fraction of the machines, using the xVM virtualization stack it unveiled for customers at Oracle OpenWorld in November 2007.
  • Facility and power overhead tied to those server farms disappears from Sun's cost base, while the closure hands Sun's sales teams a live reference case for the consolidation pitch it makes to enterprise buyers.

Second-order effects

  • Because Solaris 10 now ships on Dell PowerEdge servers under the multiyear agreement signed in November 2007, workloads displaced by the closures do not have to land on Sun hardware — Dell becomes a legitimate home for Sun's own consolidated estate.
  • Competing server vendors are forced to answer a customer-provable claim: if the vendor of record for big iron can shrink its own farms this way, enterprise CIOs will press for comparable consolidation before approving new box purchases.

Third-order effects

  • If the pattern holds, hardware vendors stop competing on how many servers customers buy and start competing on how few they need — with the vendor's own data-center behavior serving as the demonstration product.
  • That points toward infrastructure suppliers absorbing their own output into managed, virtualized offerings, blurring the line between selling equipment and operating it — the structural shift underlying the industry's move toward utility-style computing.

The trend: Server vendors are turning their virtualization stacks inward, shrinking their own data centers into proof points for selling consolidation as a service.