You might expect a leading Silicon Valley technology vendor like Sun Microsystems to spend, if not lavishly, at least more than the average company on its own internal IT.
However, Sun CIO Bill Vass says that’s not the case.
“For an IT company, my budget is really lean,” Vass says. “It doesn’t compare to Oracle or Dell or IBM or HP.”
Vass expects to spend about US$300 million (NZ$480 million) this year on Sun’s IT needs, a figure that represents about 2% of the company’s expected revenues. The average company spends 3-4% of its revenues on IT, most figures show — and most of Sun’s direct competitors spend far more.
Sun is in the midst of two ambitious multi-year IT consolidation projects that are creating major short-term costs. On top of that, it is integrating five companies bought last year, including StorageTek.
“We’re building middleware connectors between StorageTek’s systems and Sun and running it in parallel,” Vass says. “There won’t be a lot of savings for at least a few quarters, until we shut the StorageTek systems down.” Vass expects to do that in late 2007.
IT budgets weren’t always so tight at Sun. In the aftermath of the dot-com boom, Sun found itself with 3,000 IT employees supporting 1,200 different software applications, Vass says.
Moreover, a decentralised internal structure had left every business unit managing its own IT needs. In effect, there were 27 separate IT budgets — each managed by the equivalent of a CIO, he says.
Vass joined Sun in 2000 just as that era was ending. He came from the US Department of Defence, where he served as chief technology officer for the army and later as one of three CIOs in the Office of the Secretary of Defence. At the DoD, he helped oversee more than US$30 billion in annual IT spending.
In the army a decade ago, Vass oversaw a rollout of Linux servers when the open source operating system was still “considered a science project”. A self-confessed “open source bigot”, Vass continued to bang the open source drum at Sun while serving as chief security officer and later as president of corporate software services. However, he declines to take much credit for the company’s embrace of open source in the past two years.
Promoted to CIO last year, Vass oversees a much slimmed-down, centrally run organisation. There are 800 employees, roughly half working in operations and half in application development, design and maintenance. Vass has also helped cut down the number of applications Sun runs to 500, although that doubled again after the StorageTek acquisition.
With last year’s buying binge, Sun found itself running three different ERP systems: its own Oracle system, StorageTek’s SAP system and a third Onyx system that arrived via another acquisition.
Vass says he looked carefully at SAP before settling on Oracle. “SAP has a great technical solution that is very clean. And it is database-vendor independent, which we liked. But it was just not quite as ready to go on the grid as Oracle was.”
The grid is a massive Sun undertaking. Using the company’s own open-source N1 GridEngine software, it will combine Sun’s existing high-performance computing grid with the Oracle ERP system and 42,000 desktop PCs into a single super grid. Resources, applications and computing power will be delivered in service form via a policy engine Sun is building in-house to distribute all of these workloads, Vass says.