Bubbles Precede Build Outs

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About 15 years ago, the mass availability of Java and a simple web browser launched the euphoria that led to the now infamous dot-com bubble.

Lately, I find myself reminding people that bubbles precede build outs. It happened with each of the technologies I mentioned above, and it's happening with the Internet today.

I've been spending a lot of time with newly-funded startups and the ballooning ranks of venture and private equity investors. Interest level and market opportunity are up, especially for the innovations that fuel the Internet. The global IT market is growing, Silicon Valley is hot again, and that's great news for all of us.

Next Phase of the Internet Will Connect the Planet
By many indications, the build out is underway. Whether you call it the Participation Age, the Writeable Web or Web 2.0, we've only begun to see what the Internet is capable of delivering. The next phase of the Internet will connect the planet and bring your business closer to opportunities everywhere.

Keep in mind that the majority of the world will first experience the Internet through their mobile phones. We sometimes forget that 10 times as many people bought handsets last year as PCs. Roughly one billion mobile phones shipped compared to around 100 million PCs. With that, the odds are much higher you'll watch broadcast content on your phone than on your PC. Now that the major handset manufacturers are the world's largest camera manufacturers, the odds are far higher you'll even create broadband content on your handset. Talk about change.

Times have changed, and the Participation Age will require a new approach. This year has seen a series of headlines about high energy prices and the rising costs of real estate. Both are important global phenomena. And while most consumers are accustomed to thinking about their impact on, say the airline industry, we have only recently started to talk about our impact on the computer industry.

Green Data Centers — Good for Environment and Business
We know that some computers consume a ton of energy. A large search company told me that electricity is their single biggest operating expense. And if you talk to some Web 2.0 startups, you'll hear many say their second-biggest operating expense, after salaries, is electricity. Map that challenge to every data center on earth, and you have a global power crisis as the network is built out. Suddenly, the notion of running an efficient, green data center is not only good environmentally but it's also smart business. Power matters.

Data center rents in cities across the globe are skyrocketing, too. Most companies try to avoid building a data center in the world's most expensive cities, such as London or Tokyo. But consider the financial services institutions, located in the largest cities around the world, that get a competitive advantage by how quickly they can perform transactions. Their proximity to exchanges is critical, and they are essentially limited by the speed of light.

Financial services companies are not alone. I'm hearing, almost daily, from CIOs who say: "My biggest problem is that I'm out of space and power, and I can't exhaust the heat from my existing facilities. I'm finding myself allocating more floor space to aisles than computers!"

The Internet is more central to business than ever before and will only become more transformational over time. At Sun, we know you are investing to drive online relationships, fuel competitive advantage, and drive efficiencies for your business. That's why we're committed to delivering you the innovation and choice to fuel your IT build out. I look forward to leading Sun, and working with all of you through the next wave of network expansion.

Jonathan Schwartz
CEO and President
Sun Microsystems, Inc.
ceo@sun.com