Growing in the P7 (not just the G7)

De facto standards are the only ones that matter.

That’s a bit of a truism in the technology world – well intentioned standards bodies and departments of justice can do their best, but at
the end of the day, volume deployment is the only setter of standards. Ubiquity trumps policy, just about every time.

To that point, I was on a panel recently, discussing the impact of technology on the world’s more rapidly developing economies (what’s often referred to as "BRICA," or Brazil, Russia, India, China and Africa).

One of the speakers referenced an interesting shift in the traditional media industry: western companies were turning their attention toward the developing world. GDP growth wasn’t drawing their attention – as much as demographics. Teenagers and those in their early twenties represent the biggest media buyers in the world, spending a greater portion of their income on music, movies and entertainment than any other age group. And the majority of people fitting that age profile live, by definition, in population centers – not in the US, UK, or Germany, but BRICA. Whose collective population represents nearly half the entire planet’s. Think of the Ovum analysis from the New York Times, pictured on the right, more as growth in media outlets – and remember, more people in the world see “the internet” on their phone, than on a PC.

The impact of that shift in buying power won’t be limited to traditional media. The software industry is a media industry, as well – technically, the two have fully converged (a digital file is a digital file, whether it’s OpenSolaris, MySQL, a new Jay Chou video, or a champion cricket highlight). The infrastructure to distribute and manipulate that content (eg, servers, networking, storage and infrastructure software) is increasingly geared to serve consumers – the "business to consumer" (or, B2C) segment of the IT marketplace is growing far, far faster than "business to business" (B2B).

And where will the market for such network computing infrastructure be largest? By definition, where the markets are centered – near consumers (more than half of whom now live in urban environments, well covered by mobile network service). If B2B caused the IT industry to concentrate in proximity to economic centers (the G7), B2C focuses our attention on consumers and population centers (the P7?). That’s a profound change.

So with that backdrop, I’ve made a few significant changes to how Sun’s organized, focusing leadership and resourcing around two new areas.

First, as many folks know inside of Sun, I announced the addition of Lin Lee to my staff, to manage relationships with governments and NGO’s across the world. Based in Shanghai, Lin will advocate Sun’s vision of sustainable network infrastructure, encompassing open source and document formats to power efficient datacenters – we’ve already found a very receptive audience in emerging economies. Lin’s focus will be helping students, universities and governments to lower the barriers to indigenous opportunity.

I also announced today a new leader reporting to me for Sun’s Global Sales and Services organization, Peter Ryan. He’s also added to his staff a new business region, Emerging Markets – with a new leader (Denis Heraud). Emerging Markets, representing a basket of rapidly developing economies (BRICA included), will be a peer to North America, Europe and Asia. Last quarter alone, our BRICA business grew in double digits – this change is designed to accelerate that growth by adding new focus, resourcing and strong leadership.

Peter (who disclosed to me only this weekend that he started his career as a mainframe systems engineer!) replaces Don Grantham. (Don’s leaving Sun to help HP secure a Solaris license before their EDS transaction closes…)

Rapidly developing economies have, of late, started throwing their weight around in the world of traditional IT standards – and have been among the most assertive in embracing and deploying free/open source software. Quite naturally, they’ve also been among the most concerned about sustainable technology practices: 100,000,000 new PC users, each drawing 200 watts, certainly paves the way for social and economic progress – at the cost of ~20 gigawatts of new coal fired power plants. Now you know why our SunRay desktops, at 4 watts apiece, have been of such interest in the developing (and developed) world.

Bluntly put, we’re elevating our focus on developing economies because that’s where free software, and Sun’s businesses, are growing fastest. Where is OpenOffice deployed in the greatest numbers? In places where saving $300 per desktop is meaningful.

No wonder those economies are so passionate about open standards – their citizenry will ultimately make them the most important decision makers in the world.


Filed under General

36 responses to “Growing in the P7 (not just the G7)

  1. Congrats

    Congratulations, Peter! Jonathan made yet another smart move for Sun. 🙂

  2. Daniel McDonald

    Congrats on licensing technology to Themis Computer. I was confused about one point in the article posted on by Andy Patrizio. The article states:
    "He noted that Themis is a licensee of IBM’s BladeCenter blade chassis, which, unlike other blade chassis from HP, Dell or Sun, is an open architecture."
    When listening to a Sun Video about which Sun servers to buy to best run MySQL, the person in the video says that the Sun 6000 is the "most open and versatile blade platform".
    It seems there is a misconception in the market, could you help clear this up?
    If Sun’s blade platform is not open source, should it be?

  3. W. Wayne Liauh

    IBM has been tilting big time towards emerging markets eons ago, but it’s better late than never. My sincere wish that Ms. Lee will be traveling and demoing with an OpenSolaris notebook, with the full spectrum of locales installed, instead of the standard Sun-issued Mac. Actions speak louder than words as we all know too well.

  4. [Trackback] Congratulations to Peter Ryan, newly promoted EVP for Sun’s Global Sales and Services organisation (GSS). Peter has recently led the combined AMER Sales organisation (AMER stands for ‘Americas’) over the last year and a half, and prior to that he ve…

  5. freesid

    I wish to see SUN in (small) Laptops (Eee PC likes,) and in embedded market too, not just big iron. I just hope you have plans for them too.

  6. me

    good stuff jonathan and thanks for sharing. also pleasantly surprised that you mentioned jay chou in your blog. just didn’t expect to see it here. i like his music.
    oh, and good luck to don grantham too. change is good …

  7. Remarkable post, and remarkable timing. I’ve been thinking along similar lines this last week–that viewing BRIC as cheap labor and commodities sources is missing the point.

  8. Sun Man

    Can you comment on what Q4 and Q12009 will look like?

  9. Indeed there has been a gigantip leap of the tech market in India.
    And for many young Indians, it feels great to stay updated with news about the latest tech gadgets.

  10. Jonathan,
    When you speak of "BRICA,"did you notice these all nations are former slave nations. Seems finally, tides are turning. How this came about? Is it the massive population factory that these "developing" nations are seen as doing the magic? Does demographic transition explain this growth. Amazing , as I read your post it occured to me, is this the only criterion to become a wealthy nation.It is basically the cheap human resources which is making the economy run to the "third world" had the expences been more there would be no balancing of wealth. While preparing an answer for the environmental degree I came across some interesting facts. I vaguely remember that a European University was making the foreign students sign bonds so that they would work for this graying population before moving on. It is sheer luxury that prevents the western world to procreate and do the tedious chores of bringing up children, while it is tradition and lack of resources for the poor "third world" that sometimes forces them to produce more kids to help the survival. This necessity and the coditioning for harsh labour is becoming an easy exploitable resource base.This former disadvantage of developing nations decides the flow of wealth now. Still, conditions are very bad and it is not fair to compare the living conditions of these parallel universes. What is unimaginable in West is a reality in developing nations. Now these economies have become critical not only as the providers of labour but also due to influx of wealth -as new rapidly growing consumer bases. Well, this is my understanding of Economy after reading your post.
    Since I am pestered every day for a new cell phone I more than agree with you that the younger genration will constitute major part of the consumer base. I agree as no matter how much I try to argue with my son about the net being available on the computer, he still wants a cell phone that is compatible with all possible services.
    The Sun Ray desktop is a wonderful development, these initiatives will make growth sustainable. This is a positive stand, to not just use the resources, but to stand by the community in sincerely aiding and creating a humaitarian outlook in all communities. As usual, very informative article. Thanks for sharing.

  11. in the sun

    Jonathan, about those Sun Ray 2FS units: I’m surprised they are not more widely deployed within Sun. With flat screens. As a "green" company, we should have cleared out all the wasteful tube monitors, etc. a long time ago and encourage the use of these green technologies. Why do I (and the rest of my work group) still have two 21" tube monitors on my desk? The good news is that our group did get 2FS units.

  12. Great and congratulations is in order I hope.
    Does this then mean that South Africa is included into BRICA or are we still going to lag behind needless to say that South Africa has its own economy but seems that the rest of the world think that Africa is South Africa so should something happen in Africa no matter where the misperception result in South Africa suffering the brunt.
    Looking at South Africa the majority of Cellphone Internet users far out number the PC Internet users, I call the PC users educated and the Cellphone users potential.
    For opening the media in that way could only be good in providing the information.
    In the end it information determines knowledge and knowledge result into being informed.
    This is in my books the ultimate difference between rich and poor.
    The well informed will be rich and those who remain uninformed will become poor.

  13. Tabitha

    It’s BRIC not BRICA. I have NEVER seen "BRICA" before and no one in their right mind considers Africa (a continent, not a nation, which breaks with the whole country nomenclature of the acronym!) "rapidly developing." On behalf of the citizens of earth, please remove all references to "BRICA" in your post and replace them with "BRIC."

  14. Hiya, Jonathan! Sounds like things are progressing well. If I was in charge, I think I would go after the government markets in BRICA. Like cities and such. Start laying the infrastructure and building out the network. It’s always easier to be at the start of something than to come into something already entrenched. Build out the infrastructure, get these developing nations on board, and win them over to Sun for life. If you build it they will come…:) And, we all know…The Network Is The ComputerTM

  15. Bob M

    "Now you know why our SunRay desktops, at 4 watts apiece, have been of such interest in the developing (and developed) world."
    As an investor, I have not heard of this and certainly have not seen it in the figures coming out of Sun. Is this proprietary information, and you are just asking a rhetorical question?
    Or is this mention of SunRays going to be like the Blackbox publicity, initial hoopla but no followup of sales figures?

  16. ilovebric

    It’s good to hear that HP likes Solaris so much. I hope Don Grantham will also convince HP to use Sun’s open-source solutions in emerging markets.

  17. A Close Observer

    Bob M:
    The reason you don’t hear much about SunRay is because (a) it’s a rounding error in Sun’s business, (b) Sun doesn’t invest in it for market success and, (c) Sun sells about as many SunRay’s on an annual basis as Dell sells computers on any given day before lunch.
    This is one of Sun’s problems; it has many technologies, but can’t make priority decisions about which are truly important to its future success, and which are "cool" and should continue to be subsidized by shareholders. If history is a guide, as Sun goes through its current round of cuts and reductions (trying to further shrink its way to greatness), it will merely spread the R&D investment peanut butter thinner on the bread, further hobbling success.
    Sun needs to spin off highly subsidized experiments like StarOffice and SunRay into the open market, where they will either succeed or fail on their own merits. BTW, if they were spun out, their chances of success would probably improve with a management team singularly focused on their success.

  18. Lee Hepler

    I’ve been wondering why Sun doesn’t offer an internet café package for the third world countries. Maybe a T2 based server with many CAT5 connections on the back and use Sun Rays as the clients. I’ve been to many third world countries and most of the internet usage I see is in internet cafes with PCs running pirated Windows and a big air conditioner to keep the computers and people cool. That means relatively large electric bills in proportion to their labor and building costs. I don’t know what the price point is for this to become a viable solution but maybe Andy and a few techs working in third worlds countries could come up with requirements and engineer a solution targeting these internet cafes. You might not have a large profit margin on these systems during the first two years but the volume could become larger than your current total volume in very short order. You would also be laying the foundation for these countries to use Solaris at above an 80% installed base for all the systems in these countries. That means Solaris could be the predominate OS in households, businesses and government. Maybe developers in China and India would swell the ranks of your current open source communities.

  19. Shouldn’t it be "BRIC" instead of "BRICA"?
    Besides of that – great post 🙂

  20. Mike

    SUN has the best unknown technology on the market! It is a shame that this company don’t understand the customer needs. Don’t understand how to share information. As an investor i can just say, share this technology with your customer, the market loves Sun! Sun is sleeping, special the management.

  21. Bob M

    Close Oberver, thank you for your explanation, which I agree with in general (I am too ignorant to comment on specifics). Whatever Sun’s official turnaround strategy is, I think it needs PR right now so people like me can say it in a few sentences maximum. I find it hard to differentiate Sun from HP or IBM in the markets they serve in common. PR would help us junior investors, given the recent halving of the stock price. If I, as a hopeful investor, am not getting the message, then no wonder there are skeptics in the market. All I got was "10% operating profit in 2009". But now I realize that’s a goal, not a strategy.

  22. 100,000,000 new PC users! Why?

  23. AJH

    Mr. Schwartz
    If i was a 20yr BRICA i would want:
    b)Graphical Availability
    c)Info Data
    c)Hide Ability

  24. Michael Martin

    have not turned to SUN over the past 3 years because it was depressing to see SUN lose momentum and vision. Reading your BLOG today gives hope not only to me but to many real "sunnies" and poor specially in Africa. desperatly waiting to join a free and global world full of possibilties. tx Johnathan and please built up your offices around Africa. 3 Offices in RSA is just not enough. Michael

  25. davefromnz

    Just a comment on the Sun Ray thing; hopefully getting in an eval system using Sun Ray 270s (admin staff IT support in large tertiary education provider) can’t wait to try it out!!!

  26. Nikolai, to tell you why is because more and more people are using computers, and people, like me, are fixing up computers that were thrown away in the trash. Then I give the computer to someone who could use it.
    Also, many people are finding out how good computers are and they are buying them for their companies and such.

  27. Never knew anything about the Open Solaris or whatever it is. Why didn’t you just say the "Open Source World"? Because I love the Open Source world, and I love my Linux.
    Anyways, would this new PC help save the user’s money on their electric bills or what? Just wondering because I do like to use my computer alot. 😛

  28. Kevin Hutchinson

    Any update on Rock? Is it coming early 2009, late 2009 or never?

  29. Hi, Jonathan, firstly, we post your article about JavaFX in Chinese on our website,, called China Independent Software Vendor, focused on customers, ISVs, and manufacturers of software. So we hope to cooperate with SUN to post news, solutions and services to ISVs. And we also have a developer’s workshop,, like Facebook, just for developers.
    Do you have interest in it? Hope to get your reply and advices. Thank you very much!

  30. Realy ? 100,000,000 new PC users! Why?

  31. Jonathan,
    I was just reading an article how Nintindo is using the weak dollar to an advantage, shipping 4x times the US quantity to Europe, and focussing there. See :
    Wouldn’t it be great for Sun to also focus more in other parts of the world, and not only the US ? (HP and IBM make a larger share of there revenue outside of the US as well)

  32. Congratulations, Peter! Jonathan done good work for Sun. 🙂

  33. Peter

    Subtle reference to the stillborn OOXML ISO standard, what a white elephant, no one, not even Microsoft can implement it! Talk about outmaneuvered, sorry Bill.
    Any chance of a general purpose embedded / client processor based on Niagara II? A SOC, one core, 8 threads, various cache sizes and processor speeds to suit handhelds to workstations would be cool. Solaris Kernel’s real time support, combined with DTrace has got to generate some serious embedded platform developer interest.

  34. Anonymous

    Only one word ROCK!!! Wen ?

  35. great! Sun microsystems! were using a product of sun microsystems in our school. The programming language – JAVA!

  36. A Close Observer

    Please, no more ethereal blog entries until you figure out how to improve financial performance, growth, and the stock price. Results. Not academic conjecture.

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