Sun Microsystems lowers prices
By Scott Morrison and Simon London in San Francisco
Sun Microsystems will announce on Monday that it is cutting prices for mid-range and high-end servers by as much as 35 per cent, a move the troubled computer maker hopes will enable it to remain competitive with rivals such as IBM and Hewlett-Packard.
Sun will also make a series of product announcements, including the release of its first blade servers - thin computers increasingly popular with corporate customers because they generate less heat and use less space.
The price cuts and new products are critical for Sun, which is struggling to return to long-term profitability amid an economic downturn that has seen IT spending slashed, forcing computer makers to discount prices to retain market share.
Paul McGuckin, analyst at research firm Gartner, said IBM's high-end servers, used to perform complex corporate computing functions, cost about 20 per cent less than comparable systems from Sun before today's price cuts. He also said HP has been increasingly willing to discount prices aggressively in order to compete for corporate accounts.
Sun has long argued that its systems are cheaper in the long term if systems management, support and other factors are taken into account. But corporate customers are increasingly opting for hardware with the lowest up-front costs.
Cheap servers based on Intel microprocessors and the Linux operating system, developed by the open source software community, are gaining in popularity at the expense of servers based on the Unix operating system on which Sun has built its reputation.
Sun last month reported a $2.3bn net loss for its most recent quarter, including a $2.1bn writedown on the value of acquired companies.
The blade servers unveiled today will be the first products from Sun to feature new technology aimed at making it easier for companies to manage large computer networks. Systems management and administration costs are estimated to absorb on average 80 per cent of corporate IT budgets.
Sun plans later this year to introduce similar technology across its product range. IBM and HP are working on their own "managed computing" initiatives. All three companies believe managed computing technology will become essential in the future as they compete for a greater share of corporate IT spending. |
