Sun's R&D Chief Gets Out His Magnifying GlassSun's R&D Chief Gets Out His Magnifying Glass

Scott McNealy's decision to cede his Sun Microsystems CEO title to his protégée, Jonathan Schwartz, last week after 22 years at the helm has grabbed most of the computer industry's interest around the storied company. When pressed on how his tenure would differ from McNealy's, Schwartz downplayed any shift in strategy. "The network is the computer," then and now, he said on a conference call with reporters.

But an overlooked artifact of the CEO switch is Schwartz's order for a top-to-bottom engineering review of Sun's technology projects over the next three months, headed by Greg Papadopoulos, who took on the new title of executive VP of research and development at Sun last week. When I talked to Papadopoulos late last week, he said no Sun engineer will escape his scrutiny. Could there be more changes in the offing than appeared at first glance?Sun made its change at the top after losing $217 million during its third quarter ended March 26, though revenues increased 21% to $3.2 billion, largely on sales of storage and x86 servers. According to Schwartz, Sun's big brands--Sparc, Solaris, Java, and Sun Fire servers running Advanced Micro Devices chips--"have yet to really bear fruit and deliver the value they ultimately can." It's Papadopoulos' job to unlock that value.

Sun spends about $2 billion annually on research and development, pouring a greater percentage of revenue into R&D (16.5% in Q3) than many of its competitors. But the budget needs some fixing, shifting funds from engineering projects that emphasize the performance of single computers running alone to technology that can boost the performance of a whole network of systems--increasingly the way IT managers run their business apps. "As we go through and look at the R&D, we say, 'Is this old school or new school?' " says Papadopoulos. "You can't do that informally." Designing systems meant to operate in clusters and elevating the importance of software delivered as a Web service rather than shipped in a box are part of the plan. The ability to do so will define "what it really means to be a computer company" in the next few years, he says.

There are signs Sun is on the right track. The company recently delivered its new UltraSparc T1 "Niagara" processor, which gains performance through packaging hardware on a single chip that can run 32 simultaneous application threads, each in its own Java virtual machine. Those could be search engine requests, Oracle transactions, or other popular workloads. And Niagara chips run on about the same amount of electricity as a household light bulb--cooler than Intel or AMD parts in tests. Sun has been trying to sell T1-based servers to Google, and though no deal has been reached yet, "there's no doubt this stuff is meshed well with the stuff they run," Papadopoulos says. Sun also just "taped out" Niagara 2, or sent its final design in for manufacturing. That chip could ship some time next year.

Earlier this week, Sun said it would deliver a 128-bit file system for Solaris in June, creating a computing runway for the next 10 years.

Sparc and Solaris are still vibrant brands, and Sun's Sparc business actually grew during Q3, according to Papadopoulos. "This stuff has differentiated value in the market," he says. Still, customers aren't buying in the numbers they once were--Sun's share of the $51.7 billion worldwide server market last year slipped again to less than 10%, its fifth straight year of decline, according to market research company Gartner.

To get Sun's R&D more in line with customers' desires, Papadopoulos figures he'll review some 500 projects under way at Sun. "There are 9,000 engineers at the company, and you get asked the question, 'What are they all doing?' " he says. Along the way, he'll identify opportunities for cuts. As for whether projects get axed or management uses a lighter hand to redistribute funding among projects, "that's Jonathan's call," says Papadopoulos.

Schwartz's public stance so far has been to execute on the plans he and McNealy have already put in place. But look a little closer and it appears Sun is actually tinkering with its formula to try to cure what ails it.