Perpetually Restructuring Sun May Have It Right This Time
If you work as a reporter covering technology long enough, you begin to see that certain companies seem to remain in a perpetual state of recovery, reorganization, and rebirth. Sun Microsystems has been one of those businesses. I've lost count how many "new Sun" stories have been written by me and others over the past five or six years. However, revenue numbers published by IDC on Wednesday indicate that Sun
If you work as a reporter covering technology long enough, you begin to see that certain companies seem to remain in a perpetual state of recovery, reorganization, and rebirth. Sun Microsystems has been one of those businesses. I've lost count how many "new Sun" stories have been written by me and others over the past five or six years. However, revenue numbers published by IDC on Wednesday indicate that Sun may have indeed finally gotten it right, and that the company has a chance to again become a premier technology provider.According to IDC, Sun in the second quarter surpassed struggling Dell to move into third place among the largest providers of servers in the world, behind IBM and Hewlett-Packard. That Sun surpassed Dell, which finds itself in perhaps the worst position in its corporate history, isn't all that surprising.
The real surprise was Sun being the only one of the "big four" server suppliers to actually post a revenue increase in the second quarter as compared to second quarter of 2005. Sun's revenue grew 15.5%, while IBM's revenue declined 2.2%, HP's was down 1.7%, and Dell experienced a decrease of 1.3%.
Sun has made significant changes in its server line over the past few years. The company began offering x86-based servers based on Advanced Micro Devices' Opteron processors in 2003 and updated that product line a year ago with its Galaxy line of servers. In addition, Sun jumped into the multicore server market with the introduction of systems based on its eight-core UltraSparc T1 processors late last year. It also updated its UltraSparc 4+ server line.
"We can attribute our share gains to three simple things," John Fowler, executive VP of Sun's systems group, said in a statement. "Mass adoption of the open source Solaris operating platform drives our ecosystem and visibility. Our Sparc and x64 products are absolutely decimating the competition. And finally, our ability to provide roadmaps based on Sun's legendary research and development lets customers rely on sun for the entirety of their systems needs. The data is irrefutable: we are back."
But even as Sun appears to now be on a steady course, investors remain reluctant to jump on the bandwagon. On Wednesday, Sun's stock price was up slightly to $4.76 a share, down from a 52-week high of $5.40 a share. By comparison, on Wednesday IBM stock was $78 a share, HP stock was $35 a share, and Dell was $21 a share.
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