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Technology Stocks : All About Sun Microsystems - News Only -- Ignore unavailable to you. Want to Upgrade?

To: PHILLIP FLOTOW who wrote (28)	12/2/1999 12:20:00 PM
From: PHILLIP FLOTOW	Read Replies (1) \| Respond to of 36

By David P. Hamilton and Stephanie N. Mehta Staff Reporters of The Wall Street Journal Lucent Technologies Inc. agreed to purchase $500 million of computer servers from Sun Microsystems Inc., part of a broader effort between the two companies to speed the convergence of telecommunications and computer-networking equipment. Under the agreement, Lucent will base its wireless-network architecture, called Flexent, on a new generation of Sun's low-end Netra servers. Lucent helped Sun establish the specifications for the new Netra servers, which haven't yet been released, and has agreed to buy at least $500 million of the new machines over the next seven years. In addition, Lucent and Sun have agreed to jointly develop hardware, software and service "bundles" intended to help businesses quickly start up electronic commerce. Such bundles will be sold by Lucent and consist of software from both Lucent and the Sun-Netscape Alliance, an e-commerce software venture of Sun and America Online Inc. Lucent, based in Murray Hill, N.J., also plans to deploy some of its network software on Sun servers and will work together with Sun to develop technology that would make it possible to connect servers directly to optical communications networks. Today, most servers aren't capable of directly handling the high-speed data that flow across optical networks and instead generally use slower streams of data that have been converted into electrical form. The Lucent deal is another sign of Sun's continued strength in the server market. It also illustrates how computer makers such as Sun have targeted telecommunications networks, hoping to replace dedicated telecommunications switches with high-performance, general-purpose servers. The partnership could also bolster Lucent's presence in the competitive market for enterprise data networking. The company already sells corporate phone systems and some networking gear to corporate clients. For the fiscal year ended Sept. 30, revenue in its business-communications unit rose only 5%; overall revenue for the fiscal year rose 20%. Richard McGinn, Lucent's chairman and chief executive officer, said the collaboration is going after fast-growing parts of the enterprise and carrier space, such as gear to revamp wireless networks. "All the segments are growing north of 20% a year," he said. (END) DOW JONES NEWS 12-01-99 PHIL