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Technology Stocks : All About Sun Microsystems

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To: bigpictureinvestor who wrote (63918)	7/13/2006 4:07:32 AM
From: Rink	Read Replies (1) of 64865

re: I disagree with: "Niagara is a complete niche processor that is not gaining that much traction." (1) True, the first release of Niagara is not suited for floating point intensive applications because it shares a single floating point unit among eight CPU cores, and it (2) is not suited for desktops because it needs to run a larger workload than typical desktops do in order to show its value. Add to that: (3) It's not suited for low threaded apps, and (4) software often needs to be rewritten and/or recompiled to make it live up to it's potential. Taken together that's one heck of a entry burden. Why do you think the initial Itaniums were picked up so slow despite Intel paying the large software developers to rewrite their business apps? Why do you think even now it doesn't exactly grow beyond the space previously occupied by EOL-ed PA-RISC, Alpha, High end MIPS? The advantage that SUN has is that it develops software itself so this will take away a part of the software entry burden (this doesn't apply to close to all 3rd party apps though). Among the disadvantages that SUN has is that the potential replacement base is vastly smaller, and that Rock is still a long way off. I'm not saying that Rock will be a niche processor as well. I am saying that Niagara/T1 is and will remain niche. Let's say for discussion purposes that Niagara bases systems will remain below 15% of SUN's hardware rev during the whole life cycle. BTW I like the new Opteron systems. Good innovation there. The blades are a bit awkward though as I read you can only fill 10U of the 19U rack with blades, still it's a rather good step up compared to nothing. The x4500 storage systems looks like a real winner. The x4600 is without question the best top end x86 server available. It provides SUN with some prestige and class in hardware design again. These new systems in addition to the fairly recent key events will help get SUN back to a stable rev stream: - lower end Bechtolsheim servers introduced H2 last year - cost cutting initiatives (some $500M) - aliance with Fujitsu for SPARC64 VI now and VI+ in 2008 - completion of StorageTek acquisition Q3 last year SUNW did well last 2 days. It is unlikely to return to previous year highs though unless SUN answers the question of declining SPARC revs. There's that risk that SPARC declines outweigh increasing x86 / storage revs. I will probably wait till Rock is taped out. To be a bit more certain I'll look again at SPARC64 VI performance against Power 5+ / Montecito / x86 (it's been quite a while since I last checked SPARC64 performance). If you think I'm wrong I'll be happy to learn why. Regards, Rink

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