Sun still has much work to do, he noted, such as building a robust payments system. "Amazon has a very good infrastructure for monthly billing and holding onto your credit card data and so on. ... That's something Sun is going to have to learn," he said.

Sun will continue to work with Amazon even while it competes with it, Soto said. OpenSolaris OS will continue to be an option on EC2, and Sun will support Amazon's object-store API, so that developers can take an application developed on S3 and move it to the Sun Storage Cloud, Soto said.

Sun is expected to launch other cloud services in the future, including potentially hosted versions of its MySQL database and other infrastructure products.

"Sun expects to play many roles in cloud computing, as a direct provider of cloud services, as a partner to service providers putting cloud computing into place, and as a supplier to enterprises launching internal 'private' clouds inside the firewall," said IDC analyst Jean Bozman.

Its cloud infrastructure will include x86 and Sparc hardware hosted at Switch Communications' SuperNAP data center in Las Vegas, Soto said. Sun is using the software it acquired in January from Q-Layer for provisioning the servers, storage and other resources.