When we double the speed of our computers, our customers don’t buy half as many, they tend to buy twice as many. Hold that thought.
I was with a variety of external audiences yesterday – our business results stirred up some questions, partially based on comments we made about virtualization’s impact on the quarter. Which I thought I’d clarify in a quick note, before a broader summary next week.
I’d like to go on record saying virtualization is good for the technology industry – which seems to be counterintuitive. The general fear is that technologies like Solaris 10 or VMware that help people squeeze more work from the systems they already own is somehow bad for Sun. In my view, quite the opposite is true.
As I said, when we double the speed of our computers, people don’t buy half as many – they tend to buy twice as many. To companies that see information technology as a weapon (that’s not everyone, btw), increasing the power of the arsenal without increasing its price incents more purchases, not less. The same applies to efficiency – a computer in use only half the day is less valuable than one used throughout the day. The objective of virtualization is to increase the level of utilization in pursuit of more value, efficiency and affordability.
And that’s exactly the theory behind the newly bundled virtualization features in Solaris 10 – from Xen to ZFS, Crossbow to Java (fancy names for the same idea – reducing complexity to increase productivity). Solaris 10’s virtualization enables customers to consolidate the sprawling Linux, Solaris and Windows boxes laying around their datacenters, without having to pay exorbitant software licenses for add-on products. We built virtualization in to Solaris 10 not to encourage fewer computer or storage purchases, but instead, more – systems that are twice as utilized are twice as affordable. (When you double the mileage of a car, more people can afford it.)
What impact did those features have on Sun during Q4? When you use Solaris to consolidate lots of small, poorly utilized computers, into a smaller number of bigger computers, you may depress unit volumes. But you bulk up the configurations of the systems you sell (more memory, more cores and threads, more storage, etc.). That’s exactly what we saw in Q4 – fewer, but more richly configured systems, and not just at Sun. But at HP, Dell and IBM, too.
Why? Because Solaris 10 is now running like a champ on their hardware, as well. It’s being used to consolidate Solaris, Linux – and with this release of OpenSolaris, Microsoft’s Windows, as well. (You can get more info here.
As an integrated feature in the operating system.
Because this is all about efficiency – and the most efficient virtualization solution is the one you didn’t have to pay extra to use.