What Opteron means to Sun

Sun Microsystems controls half the Unix server market. That doesn’t leave much scope for growth. Now the company is eyeing the x86 market with servers based on AMD’s Opteron processor, and it’s got a good start, says Akhtar Pasha

Sun Microsystems launched its AMD Opteron-based Sun Fire systems in 2004. By H2, the company began to gain traction, and by year end, it made a significant dent in the x86 server market. Its Opteron-based systems were seen in HPTC (high-performance transaction computing), grid computing, life sciences and oil & gas. Sun sold 2,400 Opteron boxes in 2004—about seven percent of the overall 64-bit x86 market. The company is eyeing a double-digit share of the x86 market by 2005-end.

Sun remains the strongest backer of Opteron; it discontinued its Intel-based servers in early 2004. The company made headway amid tough competition from HP and IBM. Sun’s strategy for x86-64 is to lead with AMD Opteron boxes that run Solaris x86 or Linux. These Opteron servers are also certified to run Windows in case a customer so demands. A closer look drilling down into Sun’s numbers reveals some interesting facts as to why the company is seriously looking at the x86 server market.

A fresh source of revenue

As Sun controls more than half (50.2 percent) of the Unix server market (2004), there is little room for it to increase its share in that segment. To broaden its revenue base

and tap into the volume opportunity, the company is targeting the x86 market with AMD Opteron-based systems. Consider this: Sun sold 2,400 units of AMD Opteron-based Sun Fire machines in 2004; market estimates peg its revenues from these sales at a couple of million dollars—a clear case of fresh business for the company. That’s not all. Sun plans to double these numbers by 2005-end and also gain double-digit growth.

Says K P Unnikrishnan, Marketing Director, Sun Microsystems India, “We are a clear market leader in the Unix space with customers in BFSI, telecom and manufacturing. With the AMD Opteron, we offer extreme performance at a compelling price point for the x86 market, which is reflected in the growing customer acceptance inside the enterprise of the Sun-Opteron combination.” As the x86 market is virgin territory for Sun, its success with Opteron indicates a strong ‘new business opportunity’ to grow its revenues. The value offering in Opteron with Sun Fire servers is creating ripples in the market because of its clear price-to-performance ratio and the fact that Sun supports three operating systems—Linux, x86 Solaris 10 and Windows.

Sun expects this product line to provide market opportunities in the areas of high-performance technical computing, including EDA, MCAE, oil & gas, life-sciences and grid database management. High-performance Opteron-based servers are well-suited for compute-intensive applications, where CPU performance and large memory are key.

With the AMD Opteron, we offer extreme performance at a compelling price point for the x86 market K P Unnikrishnan Marketing Director Sun Microsystems India	There are several things that Sun is doing jointly with AMD, including joint marketing Anil Valluri Director, Systems Engineering Sun Microsystems India

It is unlikely that any of the other x86 server vendors will shift focus from Intel’s Xeon processor line. The likes of HP, IBM and Dell may not want to duplicate their server lines. Further, none of these vendors are marketing Opteron as aggressively as Sun, which wants to virtually own the Opteron-based server market and play AMD as its trump card in its bid for volumes in the x86 market; Sun is counting on its early-mover advantage.

Currently, Intel doesn’t really face a significant threat, particularly after it launched the 64-bit Xeon. Industry pundits therefore feel that Intel will not declare a price war on AMD until the time comes when Sun manages to capture over 20 percent of the x86 market. If this happens, then it may become inevitable for Intel to get into a price war. In the meantime, Sun intends to continue to target the x86 market with eight-way Opteron-based Sun Fire systems (as part of its Galaxy project). The new Galaxy servers will include eight-way Opteron servers based on AMD dual core chips, doubling processor performance.

Corporate accounts lead to x86 nirvana Sun has a two-step approach. For starters, it is piggy-backing on its Unix customers who are investing heavily in x86 hardware. There are lot of Sun Unix customers—for example, Texas Instruments and Cisco Systems—which have invested in Opteron in a big way (Sun has closed large deals with these two companies). The Centre for DNA Fingerprinting and Diag

nostics, Indian Institute of Technology-Kanpur (IIT-K), MphasiS and RITES are other Unix customers of Sun India which have purchased its AMD Opteron boxes. According to Unnikrishnan, “Unix customers understand the value we offer, and with Opteron they are seeing an extension of that offering in the x86 space.” The other strategy is that by marketing x86 servers, Sun is getting a foothold in new pockets of growth such as retail, pharmaceutical and healthcare. In addition, there are completely new customers whom Sun has signed up for its AMD Opteron-based offerings: SIM, Cadence, inSilica, Infosys, Accenture and Siemens.

Better price-performance

Pawan Sharma, Senior Manager, Systems, Lumax Industries, says, “We recently purchased two Sun Fire V40 (Opteron-based) systems for our UG and SPEOS applications (simulation software for photometry). We have found that the Sun Fire with Opteron-64 offers better price-performance than Compaq’s Workstation based on the Xeon-64. Because simulation requires lot of processing capabilities, we found that Sun Fire V40 performed three times better vis-à-vis the Xeon-64. We also found that system utilisation increased by 70 percent with the deployment of Sun Fire with Opteron.” Lumax plans to deploy an additional Opteron-based Sun Fire system at its R&D centre for running CATIA or MCAD applications.

Another customer, IIT-K, had a similar experience. Says Dr Dheeraj Sanghi, Professor, CSE Department, and head of its computer centre, “In the 64-bit computing space, the AMD Opteron outperforms the Xeon-64. We tested the Xeon-64 3.4 GHz vs the Opteron-64 2.4 GHz on a 32-node cluster and found that although Opteron came at a price point that was 30 percent higher than the Xeon, it was 40 percent faster.” Sanghi further points out that IIT-K had a bad experience regarding support with a Xeon vendor. This influenced its decision to invest in Opteron. He adds, “In HPTC, Opteron has performed better.”

RITES, another customer, sees the Opteron making a big splash in the HPTC space. Comments Sanjeev Kishore, Additional General Manager, RITES, “We are using AMD Opteron-based Sun Fire servers in a four-CPU high-performance compute cluster configuration along with LS-Dyna explicit FEM (Finite Element Modelling) solver for performing crash simulations of railway passenger coaches.” Adds Sun’s Anil Valluri, its Director of Systems Engineering, “There are several things Sun is doing jointly with AMD, including joint marketing. You will see an 8-CPU dual core Opteron shortly.”

Mukund Ramaratnam, Director of Marketing & Business Development at AMD Far East and India agrees. “Sun’s technology roadmap is aligned with ours. We are collaborating on a portfolio of future AMD Opteron processor-based systems and scalability beyond 4-way systems.” Sun and AMD will also collaborate on coherent HyperTransport technology implementations.

Innovating x86 bundles

Sun has identified 50 partners who will offer innovative bundles and aggressively market Sun Fire V20z and V40-Opteron-based systems. It has formed a marketing alliance with PortWise to bundle VPN/SSL solution with Sun Fire V40 machines for a suggested price of Rs 3 lakh. A similar offering from another Sun partner, Corazio, will bundle Business Process Management Solutions with Sun Fire V40 systems.

More such offerings are in the pipeline. SAP All-in-One will be bundled with Sun Fire systems by CVS IT, a SAP partner. MCAD bundles with PTC, Office in a Box with Nitix, a messaging solution with Quantum Link and NetCore, an anti-virus bundle with Trend Micro and a Firewall Appliance bundle with Checkpoint.

Additionally, Sun has formed a special focus team—three in sales and two more in pre-sales to drive its x86 server business.

Joint promotions with AMD

According to Ramaratnam, “We are doing joint customer-centric marketing programmes both worldwide and locally. Our go-to-market strategy here will be to execute joint road shows targeted at enterprise IT users, joint events, customer road shows and joint advertising (Sun Fire V20 ads, developer ads).” There will also be more vertical-focussed marketing strategies.

Sun has placed a bold bet with its Opteron gambit. In the past, the company’s attempts to conquer the x86 market had failed strongly. But this time the company appears to be on a winning wicket. If its plans work out—and they have a good chance of doing so—Sun will be the vendor to watch out in 2005 in the x86 server market.

akhtar@expresscomputeronline.com