Sun's president and CEO admitted that some of the company's customers were having difficulty coming to terms with the finer details of its grid computing business.

Schwartz noted that customers didn't really appreciate the full implications of the utility model and wanted control over the hardware. For example, one customer wanted to build a chain link fence around the computers that would house its own software resources, said Schwartz. ""For most customers, the grid service is completely unacceptable. Just culturally, they couldn't get their way there," he said. It wasn't all bad, however; developers, however, like the service, he said.

"The one thing we learned from our grid service is there's no one hammer for all nails," he added.

Schwartz was speaking at a Churchill Club dinner. The Churchill Club is a business and technology social networking organisation in Silicon Valley.

Asked about Microsoft's and Oracle's Linux deals , Schwartz focused on the importance of an operating system. "It reminds everybody again how central OSes are to the evolution of the Internet," Schwartz said. "Every 10 years, it seems like everybody wants OSes to go away so we all dismiss them."

Microsoft has announced a deal with Novell to offer sales support for Suse Linux and co-develop technologies for running Suse and Linux together. Oracle last week announced it would offer support for Red Hat Linux, potentially eroding Red Hat's core revenues.
Oracle, Schwartz said, invested in Red Hat but then Red Hat bought JBoss, thus building a business that will erode Oracle's. This reminds the world how important OSes are, Schwartz said. He also chastised IBM and HP, saying they did not realize the criticality of an OS and instead focused on another vendor's Linux offering.

"We're seeing lots of competitive advantage now because we got [the Solaris OS]," Schwartz said.

Original reporting by Infoworld