CRN: Define "Sun Power Units."
McNealy: It's a unit of measure of compute of a [system]. Now [for] different customers, we might price vector power units different than terabyte power units versus Mps power units or SAP power units. But right now we just came up with a fairly simple unit of measure for access to a Web services infrastructure. The customer likes it because they get a true utility model. They don't have to assemble anything, they don't have to own or operate anything. They get a service level agreement, and they get it at a true utility model. So if they back down on a particular quarter of usage, their numbers go down. They crank it up, it's there and ready to go. To me that's reselling a service as opposed to ACS as a Sun reseller. They're reselling power units as opposed to assets.
CRN: Do you plan to do more of those with other partners?
McNealy: We plan on doing lots of new things in lots of ways. $100 per employee per year for JES is one. JDS at $50 per employee [is another]. You're going to see some Solaris pricing subscription models that are very, very interesting, stay tuned. You're going to see more Sun Power Unit kinds of things where we wholesale to our channel partners services, network services, whether it be to a phone or to an end user or to a whatever. It's a very, very different model. It blows up a lot of how the world operated in the old days.
CRN: So, in that sense, hardware is "free" to a certain extent?
McNealy: We'll still sell it a la carte. I'll still sell you the crank shaft, or the piston ring or the stem valve or the inner tube if you want to go buy those pieces. And we'll still price them more aggressively than the competition. The real total cost of ownership will be blow away when you can do $100 per employee per year or buy a Sun Power Unit per quarter or whatever. That's where the really effective pricing models drive companies.
CRN: IBM Software Group executive Steve Mills today said...
McNealy: Was he bashing us again?
CRN: Well, he said that Sun has been more adversely affected by Linux than anyone. Some people see the Sun-Microsoft deal not only as a play against IBM, but also as a play against Linux. Could you comment on that?
McNealy: This [deal] was all about advantaging our customers who all have Microsoft product and who all want better, more aggressive and more certified interoperability with the Microsoft environment. Steve Mills can fantasize all he wants about what this [deal with Microsoft] means, but what it means is our customers have a uniquely advantaged interoperability position between Sun and Microsoft products both ways.
I've met some competitors that are very upset by this, but I have yet to meet a customer who's upset about this. And I challenge you to find a customer that's upset by this. They might be skeptical, but not upset. That's the worst I can find is someone that's skeptical that Steve Ballmer and I [can work together]. I sent an email to Steve last week, I got a response back in 10 minutes saying, "I'm on vacation out of the country, I'll talk to you Tuesday." I'm talking to him tomorrow at 5:30. We are in regular conversations about how we take this to the next level, and then the next level and then the next level. We are both thrilled to death at the customer response to this. We don't comment on them, but you might wonder whether we're thrilled to death about our competitor response to this.
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