Sun Microsystems Moving In The Right Direction - InformationWeek

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9/8/2006
06:35 PM
Darrell Dunn
Darrell Dunn
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Sun Microsystems Moving In The Right Direction

Proprietary and expensive? CEO Jonathan Schwartz insists that label is "dead dead dead," and some new product and market share developments back him up.

When Jonathan Schwartz took the helm of Sun Microsystems in April, it wasn't clear what kind of company he inherited--an old-school vendor of expensive, proprietary systems, or an industry stalwart revitalized around open source software and standards-based hardware.

After two quarters of solid sales growth, fueled by x86 and Sparc servers and an open source version of its Solaris operating system, Schwartz thinks the answer is now clear. "The proprietary and expensive moniker is now dead," Schwartz wrote on his blog last month. "Dead dead dead." And there's this significant factoid to back him up: Sun recently bumped Dell out of the No. 3 spot in server sales, behind IBM and Hewlett-Packard.

Schwartz this week will unveil a number of products on the turf of its most important customer base: Wall Street, whose big, demanding tech organizations will determine how long Sun's rebound lasts. Among the advances Sun will tout: faster processors and increased memory in its midrange UltraSparc IIIi server line; servers equipped with Advanced Micro Devices' most recent Opteron processors; and encrypted tape storage on the acquired StorageTek platform. Sun also is incorporating the multicore UltraSparc T1-based processor platform into its Netra systems for telecom carriers.


Sun Microsystems CEO Jonathan Schwartz

Sun Microsystems CEO Jonathan Schwartz

Photo by Justin Sullivan/Getty Images
The offerings demonstrate the growing breadth of Sun's product line, which once showed gaps despite the company's big R&D investments and touted innovations. "We went through a period when we didn't have a new product portfolio," acknowledges John Fowler, executive VP of Sun's systems group. "There was a lot of skepticism."

Still High on High End
Sun is on pace to sell $500 million in AMD-based servers this year, though customers are still buying lots of UltraSparc servers for top performance. The new products and the pilgrimage to Wall Street show that while Schwartz fights the "expensive" label, Sun isn't retreating from the computing high end.

At the High Performance Computing Virtual Laboratory, a computing grid used by a consortium of Canadian universities, Sun systems have helped boost performance by 500%. The lab chose six Sun servers with the latest UltraSparc IV+ processors, three with new UltraSparc IIIi processors, and one with a multicore UltraSparc T1 for a new data center. Sun beat out IBM and Silicon Graphics because it provided the lowest cost for performance once power and maintenance were factored in, lab executive director Ken Edgecombe says.

Sun also is building on last year's $4.1 billion acquisition of StorageTek. By adding data encryption to the StorageTek T10000 tape drive system, Sun keeps pace with IBM, which last week said it will add encryption to its enterprise-class storage drives. Sun plans to add encryption to its T9840 tape-drive system by the middle of next year.

Sun pulled off a surprise last month when it passed Dell--a company built around selling inexpensive, industry-standard computers--to become the third-largest server provider in the world, according to IDC. Sun's server revenue grew 15% in the second quarter compared with the year-earlier period. Nathan Brookwood, an analyst with Insight 64, attributes Sun's success to a broader, more-open product line that appeals to more buyers. "People used to ask why Sun spent so much money on R&D and why didn't they become more like Dell," Brookwood says. "Now people are asking why Dell doesn't do more innovative things."

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