And we don't have 100% solaris api/abi compatibility.
Or a Sun compiler.
Or Sun drivers, necessarily.
Or a real guarantee of future source releases from Oracle.
Who/what is this for?
I compare OpenSolaris/Illumos to the Linux kernel. You typically don't just install them just like you typically don't install Linux. Instead you install a Illumos distribution or you install a Linux distribution. Obviously this isn't a perfect comparison since Illumos contains a lot more of the user land than Linux does.
Current distributions of Illumos appear to include: OpenIndiana, SmartOS, Nexenta, and now OmniOS.
Where do you get that we don't have 100% solaris api/abi compatibility?
One of the pressing projects appears to be to make the Sun Compiler optional. Illumos' preferred compiler to be built with is GCC 3.4.3. They do still rely on dmake and the lint from SunStudio though. Hopefully that can be resolved.
I don't know why we need Sun drivers specifically, unless we are using Sun hardware.
I think we can safely assume now that there will be NO future source releases from Oracle.
As to who this is for, I believe other comments do a good job expressing that.
OpenIndiana, SmartOS and OmniOS are all distributions of the illumos kernel and associated libraries and programs.
OpenIndiana is geared more towards desktop users (though it can be used for servers well enough). OI is funded primarily through everycity.co.uk.
SmartOS is a PXE/USB booting server operating system, where all services are meant to be encapsulated in zones and KVM. SmartOS zones use pkgsrc for packaging (via pkgin). SmartOS is useful for building clouds, for instance. It is the core of Joyent's SmartDatacenter product.
OmniOS is a more traditional server operating system in that you install bits on metal, use IPS for packages, and have an upgrade path other. OmniOS has been used in production inside OmniTI for a while (as I understand it), but is the newest player on the block.
As with Linux distributions, each distribution above has different operating and development philosophies, but they all push code back up through the illumos gate.
Sun is dead. Oracle ate Sun, took their ball, and went home. illumos is the successor of the OpenSolaris idea (sans asinine governance model), and the core of open source Solarish distributions.
This talk by ex-Sun kernel engineer (and creator of DTrace) Bryan Cantrill is both instructive and hilarious: http://smartos.org/2011/12/15/fork-yeah-the-rise-and-develop...
People who want to run ZFS for storage usage. ZFS is still better than Linux alternatives like LVM, BTRFS etc. To be picky, there is not an exact counterpart to ZFS under Linux.
And with clones etc. you can set up 1 master KVM image and then clone it 10 or 100 times, saving a lot of disk space in the process (ZFS clones only use the amount of space that is different from the original).
People who have a lot of Solaris experience or have to maintain a lot of Solaris systems already. Also people who are using Solaris zones.
People who are building backend systems that require or can use any/all of the above. Right now, no one cares what your Web SaaS service runs on, as long as it stays up and doesn't lose their data.
Solaris still has a better VM subsystem, IMHO, than Linux does, and performs very well under heavy loads that include disk activity.
Second, Oracle is encumbering Solaris with a not-nice license. I haven't followed the latest developments because I no longer care, since I will never use a non-free OS.
Whether you meant to ask, "Why Illumos over Solaris" or "Why SmartOS or OmniOS over Illumos?" I think I have answered your question :-)
http://dtrace.org/blogs/bmc/2011/08/15/kvm-on-illumos/
Hopefully the next release of OpenIndiana will add support for it as well, seeing how they also use the Illumos kernel.