Sun chief forges ahead as IBM rumors swirl

In a speech on Wednesday, the CEO of Sun Microsystems Inc. ignored the rumors that the company may be sold to IBM and focused instead on the business opportunities presented by cloud computing and open-source software.

All of the world's Fortune 500 companies are using open-source software at least to some degree, CEO Jonathan Schwartz said in a speech at InfoWorld's Open Source Business Conference in San Francisco. “The era in which we wonder if open source will matter is now behind us,” he said.

The opportunity now, he said, is for companies such as Sun to translate the adoption of open-source software into revenue and profit. Schwartz argued that cloud computing provides a way for Sun to do just that.

Making money from open source is a key issue for Sun. The company is reportedly in talks to be acquired by IBM, in part because it has struggled to grow its business through a strategy based on attracting new customers with free software.

Schwartz claimed that the pieces are now falling into place. He outlined a three-part strategy, also described in recent posts on his blog: Attract a wide user base with free software, build innovative products and then link those first two elements. Cloud services will help fulfill the third goal, he said.

“This is a mechanism that lets us scale to the size of our user base, rather than to the size of our sales force,” he said.

“Where's the money?” he asked rhetorically. “Our cloud services will not be free. They'll be available for a fee.”

Sun has said it will offer its first cloud services this summer — computing and storage services akin to Amazon.com Inc.'s EC2 and S3. It will follow those infrastructure services with “platform” offerings based on its MySQL database, Glassfish middleware and NetBeans developer tools, Schwartz sad.

Users of the OpenOffice application suite will have the option to save files to Sun's cloud storage service, according to Schwartz. NetBeans developers will be able to save their outputs to its cloud in a similar way, he said.

It was a bullish talk that seemed at odds with the reports of the IBM acquisition — something both companies have declined to comment on. Schwartz was asked about the talks as he left the conference but declined to comment.