Analyzing the HP-Sun Agreement

By Nicholas Kolakowski  |  Posted 2009-02-25 Print this article Print

Mark Potter, senior vice president and general manager of BladeSystem and Insight Software for HP, portrayed the partnership as the best of all possible worlds during a conference call.

"Why is Solaris 10 best run on a ProLiant, versus some of the other partners who have [been] announced?" Potter said. "You have HP standing behind Level 1, Level 2 support, and it's a one-stop shop-[HP] is going to deal with the entire infrastructure, and be able to do that worldwide."

News of the partnership comes at a moment when Sun and HP, along with IBM and Dell, are watching their yearly and quarterly server revenue sink thanks to the U.S. recession.

According to an IDC report, quarterly server revenue for HP fell 10 percent to $3.9 billion, while Sun's revenue fell 14 percent during the same period to $1.3 billion.

Thus, with both companies in a position of needing to sell more servers, the partnership announcement could be seen as a marriage of convenience.

"I believe this is the fifth similar partnership that Solaris has done on the x86 server market, and HP was the last of the major vendors to sign onto this," Charles King, an analyst with Pund-IT Research, said in an interview. "With server numbers down all over the place, vendors are looking for sales opportunities wherever they can."

King continued, "Sun has a significant base in the commercial server market, but a lot of it is old UltraSPARC equipment. That could be moved over to the Solaris on x86 pretty easily-which presents opportunities for companies like HP."

"Sun appears to gain the least from this agreement, as HP will gain support revenue that might formerly have gone to Sun," Josh Farina, an analyst with TBR, said in a statement. "However, Sun is betting on sales of its closed-source Solaris to drive incremental revenue growth, as well as the sale of development and other software tools and services."

By 'closed-source,' Farina was referring to the Commercial Distribution model for Solaris 10, which Sun makes available under the CDDL open-source license.

Editor's note: This article was updated with clarification from an analyst.

Nicholas Kolakowski is a staff editor at eWEEK, covering Microsoft and other companies in the enterprise space, as well as evolving technology such as tablet PCs. His work has appeared in The Washington Post, Playboy, WebMD, AARP the Magazine, AutoWeek, Washington City Paper, Trader Monthly, and Private Air. He lives in Brooklyn, New York.

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