Sunday, April 09, 2006

Sun vision

The Economist recently ran a story about Sun's history through the boom and bust. I believe it's a fair critique of Scott McNealy's direction of Sun in the days before Jonathan Schwartz revolutionized the company with per-employee support pricing, FOSS and true utility computing. The article highlights how Sun lost ground when it only offered a "my way or the highway" solution to customers. But things are looking very different today with Sun's AMD Galaxy servers and new throughput computing machines.

Last week, Sun announced its new CT900 telecoms blade server. This was a smart move. IBM and HP currently dominate the general blade market, so Sun is going specifically after its best vertical market - the telcos. By the end of the year, Sun's telco blades will also feature the T1 processor which is perfectly suited to telco applications. I have a good feeling about these new telco blades.

The new Sun Microsystems is all about smaller, faster, eco-friendly servers. For example, their recent aquisition of Aduva makes it far easier to maintain large numbers of small servers.
So it's no surprise that their Scalable Systems Group recently laid off 7% of staff. This is a sign of clear direction and cost control. Mike Lehman is delivering profitability as he takes control of company finances.

When the Economist says "Unfortunately, none of this visionary stuff seems to be helping Sun", it appears to be absolutely wrong in so many ways. I believe that investors can expect good news when Sun reports 06 Q3 results on April 24th.


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