Sun recently pulled the plug on its Grid Compute Utility service, which was launched two years ago and allowed companies to buy computing power from Sun's data centers at a fixed rate per hour, like a public utility.

The service, which predated Amazon.com's EC2 service, is now "in transition" as Sun prepares to launch some new services, according to its . Sun is still supporting customers who signed up for the Grid service but stopped accepting new customers several weeks ago.

"That was kind of an early attempt at cloud computing. We got some features right and some not right," said Dave Douglas, senior vice president in charge of Sun's Cloud Computing division. "We still think that model totally makes sense," he added.

On Tuesday Sun gathered some press and analysts together to discuss how it will tackle the cloud market moving forward. It talked about its plans only in general terms and said specifics will follow after the New Year.

Thanks partly to its early embrace of the Web, Sun has a formidable list of technologies that it can bring to the cloud market. Besides its servers and storage gear it has its Solaris OS, MySQL database, xVM virtualization software and ZFS file system, to name a few. Most of the software is open source.