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Sun Microsystems will focus its $2bn R&D spending on "non-traditional" areas to "intercept demand" in complex business and consumer IT environments.

Addressing a VC and start-up crowd in San Francisco, California, freshly-promoted chief executive Jonathan Schwartz listed development of energy- and space-efficient servers that help reduce customers' data center costs along with improved security and provisioning because "the internet today is too complex."

Schwartz ruled out investment in consumer devices and services, unlike infrastructure rival Microsoft, as this would take Sun into competition with telcoms and service provider customers.

"We have to make sure the infrastructure is agnostic to the device," Schwartz told the Supernova 2006 conference in San Francisco, California.

With an eye to Wall St, Schwartz made it clear he is thinking about Sun's share price. There has been growing discontent, peppered with disbelief, among investors at Sun's inability to turn a profit or derive revenue and market growth from strategies Schwartz has engineered - including flat, subscription pricing for Sun's software.

"My job is to make sure we deliver long-term value to share holders," Sun's CEO said. "Four to five years ago Sun was told to cancel Solaris because operating systems are commodities. Now we see some of the competition roll out next-generation servers and they are forced to run Solaris. I've got to make sure the bets pay off and not make arbitrary decisions."

As such, Schwartz indicated spending precious R&D on commoditized or expensive hardware is on the way out for Sun - in at least some areas (NAS and storage apparently excepted.) The company has, of course, come in for heaps of criticism for channeling dollars into its proprietary Unix hardware, and software, architecture with UltraSPARC and Solaris while the world has moved to "commodity" Intel and AMD hardware running Linux and Windows.

While Schwartz defended Sun's decision to continue spending on Solaris he, again, chose, to highlight new products like Thumper - the four-way, Opteron system combining storage, identity management and the Solaris 10 ZFS file system - as he did at Gartner's Symposium IT/expo last month. Only this time, the key selling point for Schwartz is the fact Thumper features software- rather than hardware-based RAID.

"The era of custom hardware is on the way out. That sounds funny for a custom hardware company to say, but you can do away with RAID controllers because you can do RAID in software," Schwartz said.

The end to custom hardware, obviously, means the end of custom hardware engineering and the need for engineers to build such products. Schwartz, though, did not reference reports earlier this week of further layoffs in this area for Sun.®

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