Turn your back on the data centre, says Sun boss

Addressing an audience of senior management from end user business and IT companies in London, McNealy said, "Most companies will stop buying computers." Instead, he added, businesses will turn to service organisations to provide their IT.

McNealy questioned the wisdom of IT directors managing their own Microsoft Exchange e-mail server, enterprise resource planning (ERP) and human resources systems.

"Running Oracle ERP is not a business differentiator," he said. McNealy advised UK IT directors to ensure 95% of their IT budget is spent on what he described as "secret source", the company-specific IT that adds the most value.

For the rest of IT, McNealy recommended businesses outsource. One example McNealy feels has been a success is Sun partner SalesForce.com, a business that runs CRM and ERP applications over the web. Users pay to use the service on a per-transaction basis.

McNealy was also critical of traditional IT directors and chief information officers, whom he described as "chief integration officers".

In no other industry do users buy the components to put together an IT product for their data centre, McNealy said, adding that 90% of a business's IT is exactly the same as everyone else's.

"No two data centres are the same," he said. "Users fly their organisations on totally unique data centres. The IT industry is screwed up." If the same rules were applied in the airline industry he said, "People would create, build and fly their own planes."

He called for a change in the way IT systems are created for the data centre, with a focus on a utility model for computing with integrated hardware and software over the custom data centre installations being deployed now.

But McNealy confessed these changes will involve major disruption among users and IT businesses. "We'll have a 10th of the IT staff we currently have." IT revenue, he warned, will be a 10th of its present value.

Sun's strategy is to provide integration out of the box. The company plans to introduce a set of products in the autumn which integrate hardware, middleware and application software. "We are trying to take complexity out of IT," McNealy said.

This is the kind of approach IBM took in the mainframe's heyday. McNealy said, "While the mainframe was integrated, it was not integrateable. We are not locking our systems shut." He added unlike the mainframe, users would be able to plug in third-party software such a Veritas file system.

Clive Longbottom, an analyst at Quocirca, said, "People in UK IT departments are doing what the telco business was doing a year ago." He said they were facing the prospect of job cuts as their work becomes commoditised and outsourced.

But Longbottom disagreed with McNealy's view that 90% of the IT workforce will be lost. "I don’t' see a 90% cut in IT workforce," he said, "But there will be a slow move from internal IT people to external IT people."