Why Sun faces a risky future

Electronic News, Dec 22, 1997 by Jim DeTar

Sun Microsystems has recorded a strong history of growth and innovation. Its Sparc RISC architecture has allowed it to prosper mightily in the workstation segment, and its Java networking language has won a strong position in the exploding Internet/World Wide Web networking phenomenon.

But Sun faces a difficult future. It has to take on Intel and Microsoft to maintain its position in its two strongest technical markets.

Sun persuaded a variety of Sun partners to adopt the Sparc RISC architecture so that it became a major factor in the workstation business. Now, however, the RISC camp including Sun seems to be folding its tent in the face of an advancing Intel-compatible army. The latest development came last week when Sun signed microprocessor, system and software cross-licensing agreements with Intel and said it will port its proprietary Solaris operating system to the Merced processor, Intel's planned next-generation MPU platform (see story on page 6).

This follows similar actions by other RISC vendors. MIPS recently said its Silicon Graphics Inc. (SGI) subsidiary will use Pentium chips in its low-end workstations. MIPS said it will continue to use its own MIPS architecture for its leading edge systems, but the point is that MIPS has given Intel an inch. Intel will not be content to provide a few processors for the small segment of SGI's systems that address the entry level. It will push for that company to use its latest microprocessors, especially when the upcoming Merced MPU--a combination of Intel x86 and Hewlett-Packard HP-RISC architectures--hits the streets.

SGI, for its part, is the company that gave us the spectacular graphics in "Jurassic Park," "Terminator II" and other Hollywood spectaculars. SGI will want the most powerful processor it can get its hands on for its systems. Intel looks like a good bet to offer that power going forward. Look for Intel to increase its share of chip sales to SGI.

As an added weapon in Intel's arsenal, it recently bought the rights to Digital Equipment Corp.'s Alpha microprocessor, until now the fastest chip available. Digital has for years led the market in terms of raw speed, hitting internal operating frequencies of more than 500MHz while Intel is hovering at the 300MHz level.

Digital needed the cash it got from the settlement of its legal differences with Intel to finance growth in its core businesses. And it could be argued that Digital saw the writing on the wall in terms of the continuing growth of x86 and decided to join the winning camp. For Intel, however, the deal was a major coup. Intel, without really doing anything but responding to a frenzied attempt by Digital to regain some prominence by taking on the largest kid on the block, has gained a measure of control over its most technically powerful competitor's chip architecture and manufacturing facilities.

And then there is Sun with its Sparc and UltraSparc RISC architectures. Sun until last week seemed to stand alone against the might of the entrenched Intel machine. That was apparently an untenable position for the workstation company and it now says it will optimize its Solaris OS for Intel's Merced chip, due out by 1999.

Microsoft Nibbles At Java

Sun's wonderful Java networking software has taken the net by storm. Software is not a new segment for Sun, which has been offering its operating system software for its workstations for many years. Now the company has come to market with Java and it seems as though you can't go to a web site without starting a Java applet.

Sun is not yet selling its Java chips, but it has high hopes it will soon be doing so starting next quarter. Java is running all around the web right now, however, on network servers that aren't using Sun processors and those seem to be doing just fine without the Sun chips. So it's not really clear, now that Sun has made Java virtually an industry standard, what it will do to make its chips as well received when there are good alternatives out there from a host of companies including Intel, AMD, Advanced RISC Machines (ARM), Hitachi with its SH, and of course MIPS and the Digital-originated Alpha processors.

Designers seem to really enjoy working with Java software. In fact it holds such promise for the future that it has drawn the interest of other software vendors including That company in Redmond, Wash.--Microsoft.

It's not clear yet whether Microsoft is serious about supporting the Java platform, or whether it simply wants to penetrate that market far enough that it can derail Java and drive on through with its own web software. One thing is sure--Microsoft has entered the Java market and that could be bad news for Sun. While having to fight off Intel on one flank, the much smaller Sun is besieged by Intel ally Microsoft on another flank.

So the question is where will Sun be five years from now? If the company tries to sit on its laurels it will be squashed by the industry leviathans. Sun's strength has traditionally been as a hardware vendor, specifically workstations and servers and the chips and related software that go into them. It faces a daunting task now just holding market share with its Sparc platform.