| Sun proclaims it is No. 1 By Jim Davis
 January 30, 1998, 12:55 p.m. PT
 
 news analysis Sun Microsystems (SUNW) fired back
 today, responding to a report from a major marketing
 research firm stating that Hewlett-Packard (HWP) was
 the No. 1 one overall workstation vendor for 1997.
 
 Sun wants to make clear that it was the No. 1 Unix
 workstation vendor, though this claim may
 increasingly lose meaning as the makeup of the sector
 changes from a Unix-centric environment to one
 dominated by Microsoft-Intel machines.
 
 Sun held on to the No. 1 position in Unix workstations
 by a wide margin, according to a report to be
 published next week by International Data
 Corporation (IDC). (See related story) In 1997, Sun
 shipped nearly three times as many as Unix
 workstations as HP.
 
 However, IDC is the same marketing research firm
 that stated earlier this week in a preliminary report
 that Hewlett-Packard was now the No. 1 overall
 workstation vendor, taking some of the sting out of
 the Sun response. The earlier report said that when
 both Unix and Windows NT-based workstations are
 counted together, HP surpassed to become the No. 1
 workstation vendor in 1997.
 
 Personal workstations based on Intel processors and
 the Windows NT operating system have challenged
 traditional workstations using a variety of Unix and
 RISC processors. This year, some analysts predict that
 three times as many Microsoft-Intel personal
 workstations will be sold compared to their Unix
 counterparts.
 
 In response to this phenomenon, Sun appears to be
 talking out of both sides of its mouth. On the one
 hand, it is saying that Microsoft-Intel workstations
 aren't really workstations but simply fast PCs. But at
 the same time it is touting its low-cost workstations,
 which are being marketed in response to the
 Microsoft-Intel threat.
 
 "When an industry manufacturer wants to control the
 definition of a category to make its market share
 figures look pumped up, then you know they are
 being encroached upon with significant impact," says
 Richard Zwetchkenbaum, an industry analyst.
 
 "We believe that the advent of our low-price,
 high-powered systems will prompt an identity crisis
 for the trumped-up PCs that our competitors in the
 Wintel camp call personal workstations," said Anil
 Gadre, vice president of marketing for Sun in a
 prepared statement.
 
 Sun says that the Unix systems will continue to offer
 better performance and that with the advent of its new
 low-cost UItra workstations released earlier this
 month, the price advantage PC systems had enjoyed
 will evaporate.
 
 While Sun is busy deriding NT-based personal
 workstations, the market and customers are defining
 what it thinks a workstation is--and increasingly the
 PC architecture--appears to be the system of choice.
 
 Customers have typically associated workstations with
 engineering, financial, and scientific uses where those
 systems didn't have office productivity applications,
 according to Dr. John Latta, president of Fourth
 Wave, a consultancy specializing in multimedia and
 graphics market research. But that definition is
 changing because of the sales volume currently
 enjoyed by the PC platform.
 
 "The vast majority of Unix applications are moving to
 NT. In some [market segments], 90 to 100 percent of
 the applications are moving over. There are so many
 flavors of Unix--developers have to customize their
 programs for each flavor of Unix" if they want to
 target HP, Sun, and SGI, he said. "What happens with
 NT is they are insulated from those problems."
 
 With developers targeting the NT platform with new
 software, customers may find fewer and fewer
 reasons to choose a Unix system in the years to come,
 especially as analysts believe the performance
 advantage of Unix workstations will diminish over
 time.
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