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Technology Stocks : All About Sun Microsystems

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To: A.L. Reagan who wrote (29149)	3/18/2000 7:48:00 PM
From: rudedog	Read Replies (3) of 64865

A L - I disagree with your premise for making SUNW a Gorilla - Although its roots are in UNIX, Solaris has evolved into a proprietary standard To the extent that Solaris is proprietary, it is weak. It's strength is in its UNIX roots and in the support of the UNIX community. The re-branding of Solaris as a "super-UNIX" is a new and so far infant strategy. Your statement goes against the whole history of UNIX as an open standard, with SUNW as the leading proponent. MSFT has been trying for years to brand Solaris as proprietary because they know that would weaken SUNW with its key base in the development community. Java and Jini as well If SUNW does not fulfill its promise to keep Java open, it will probably mean the collapse of a robust java community. So far SUNW has done a decent job of keeping Java from being balkanized while still giving "almost open" access. The strength of Java has been its utility - it is an enabler, not a proprietary technology and SUNW makes no money from Java. SUNW is trying to become a prince or king in storage as sort of a systems integrator SUNW has a purely defensive strategy in storage, in order to fend off the focused attacks from EMC, IBM and now CPQ on its profitable server attached storage. They are hardly even a player in that business and have no sales outside of their own hardware base. The margins SUNW has historically enjoyed are those of a gorilla, not a king. SUNW has the lowest margins of any of the top UNIX players. If you take a close look at the equivalent business units of HP, IBM and CPQ, you will see that they have margins which are 10 to 15 points higher than SUNW, and operational earnings that are 50% higher than SUNW on a percentage basis. SUNW's claim to be even a king must be based on market share and growth. SUNW has succeeded despite this impediment - but being lowest in margin is hardly the sign of a gorilla. I agree with Lynn - SUNW fails nearly every test for Gorilla status. They could get there eventually - but that would require continued great execution on what they do today, and also nearly flawless execution on their next generation plans.

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