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

To: Mephisto who wrote (36806)	10/18/2000 6:21:03 PM
From: Charles Tutt	Read Replies (2) \| Respond to of 64865

The one (IMHO small) negative item that caused a lot of discussion was that the memory used in Sun machines was at a premium and resulted in increased costs, and thus a decline in margins. Overall, I think the quarter was spectacular -- much better than I expected. Don't forget that the first quarter is traditionally their weakest seasonally, with sequential revenue increases in Q1 quite rare. These guys are doing what they're supposed to -- managing whatever comes their way, including Euro problems, other macroeconomic factors, component supply tightness, recruitment, competition, technological challenges, and all the rest -- and doing it spectacularly. JMHO, of course. Charles Tutt (TM)

To: Mephisto who wrote (36806)	10/18/2000 6:32:19 PM
From: tiquer	Read Replies (4) \| Respond to of 64865

My Sun conference call notes... They are not proofed and may contain several errors.. many items cut short... Over all I liked the call... Scott did hint to outside factors that he can not control for the future.. Greenspan.. economy.. etc etc.. Start 41.2 % of revs.... gross margins bookings up 54 %... 1.8 billion back log... Systems products.. UK..79 % Germany 50% Italy 145%.. Yr over yr growth exchange rates not material.. Hardware soft ware and 63% services 43% highest growth rates in ten yrs.. Gross margins decreases 4 %... due to increase cost of memory... Services gross margins decreased 2 %... increased investments.. GM rate declines not do to competitors... had been expecting GM decrease.. Focus on over all operating results.. Forward..continued pressure on memory prices.. Expect Q2 to be similar to Q! second half of year slight ly better.. Op exp... grew RD 37%... Keep annual R&D ~10% revs Improved performance in almost every measure... Going forward.. used to think of annual rev growth.. Pushing 30% Growth rates revs higher in first half of year annual rev growth in mid 30s Ed Wild quarter grew orders 50%.. Growing faster than any time in past decade.. Why? Executing on vision and focus Solaris 8.. Believes is several years of anything in market Java 2 micro division.. New storage products.. Scalable storage networks.. Grew 50% yr yr.. Grew faster in storage than EMC Iplanet software.. Netra products.. Ultras sparc III sig price performance.. Compatible with past versions.. Numbers speak for them selves.. Growth rates stunning against HP IBM... not to mention wintel global sales reorg.. One integrated sales force..sales speak for themselves.. Media... entertainment... retail... healthcare... Good growth.. Again.. Gross margins.. Do too memory costs..not an issue to spend a lot of time on.. Storage.. Kodak..etc...Hugh wins against EMC.. Believe have most compatible product line. SunTone..getting bigger and stronger.. Will unveil wireless strategy next month.... Solaris 8 going strong.. Star portal lined up for nice intro... Q3 Java cards.. Java phone...java TV.. Java car.. Over 40 commercial licenses in consumer space... java wins important going forward.. Dotcombuilder web site... for developing on sun platforms.. Check it out Scott... Doesn't know where to begin... Big across the board move for big fast web tone arch... Java in automobile..GM Ford.. Developing with Java and jini.. no Ctrl alt del requirement Storage.. Only make sense to buy from complete systems integrator.. Rumbling down the runway full speed.. Just hit lift off stay tuned and watch ... Out talking with employees.. Six topics... - Availability and quality.... Number one priority..moving down experience curve faster than anyone else... - Dotcoming Sun.... Creating portal for all major constituencies in Sun.. Annual report online.. - Scaling Sun.... Spending lot of time on this.. Getting people up to speed..leadership developing.. code of conduct.. Challenging.. Getting cream of crop people around the world.. - Supply demand process..... forecasting.. Lead times to high.. Lost business because couldn't quote availability.. - Service provider..... - Performance across the board..... Network, media, availability.. Major effort to ensure moving forward.. Sun sigma.. Quality... 30 or so programs.. Tools in place.. Sun has an awesome team..working fannies of.. ;-) No one is close to having breadth, depth, and focus that sun has... Q&A Why didn't spend discretionary money like in past...... Where they backlog limited..... ----- Yes back log to high..could have shipped more. Spending.. Didn't plan for so much revenue.. If they knew they were going to have 60% they would have spent more to grow faster.. Why did Scott say no completion.. --- Scott.. I didn't say that.. lol interesting qtr... based on mid 30s growth comments..f 2001 and high 40 growth second half has there been an opportunity to go out and poll sales force.....----- Did poll tried to plan year and look out.. Demand out is there.. Europe etc.. ... need more people in field..more service people will try to beat mid 30s if can.. Scott.. Providing flexibility in systems.. Managing business well as long as interest rates not out of control etc.. Scott worries about those factors most.. Ooops missed some...making a trade..grin.. Gross margins.. Memory coming down.. Other factors? More aggressive pricing? --- principle issues still memory in Q2... still see significant memory pricing issues.. Number of servers 3x more than IBM etc..high performance systems.. Under control..may reverse a bit in Q3/4 Storage.. ---- takes time to get customers switched to Sun platform.. Pleased with the growth.. Wins vs EMC.. Better growth than EMC... understand what customer wants.. Not declaring victory.. But stay tuned..good story... _____Lost my connection..good grief... _____Back on with GPS Bracket component issue.. From pricing..and change? ----- vast majority, again.. An increased cost of components.. Do the math... Have been moving pricing down constantly.. Being competitive.. Setting performance for industry.. P/P is fine.. Not a pricing game any more.. It is a value proposition the customers want to hear about... What Increase in head count would make Scott happy.. Several things mitigating different ways.. As dot com Sun.. We need to grow head count slower.. Service providers are more capably supporting themselves..so that takes less people.. Still places where don't have the coverage..training moving to larger places.. Finding great people __________lost connection again......... __________Damn!!! Had to Reboot... ???----Huge opportunity... Largest build out ..in yr one or two of explosive growth of build out.. ???----Base configurations with memory 3-5x improvement in quality with factory install processes rather than field install... Orders up sequentially 3-4%? ----- Scott..wish we had preciseness that analysts want..but we don't.. Have spending, investment, hiring, ordering, buildout, booking.. With wide variations to ensure we meet expectations..but many???? Anticipated as much a 4% lower gross margins? -----Want to grow top line as fast as we can.. Need to deliver.. Take business now... missed some.. Capacity on demand..---- 20% of e10ks, and extending down product like.. The model is going that direction.. Improve quality and uptime... Sequential growth.. Assuming in line with past.. Would be dramatically higher than what leading on... ----- compares in q1 q2 different... growth rate will not go at that pace for next ten quarters.. See really good demand world wide for all of our services... going get tough.. do also see bricks & mortar using this as opportunity to drive more efficiencies into business.. Enabling technology goes counter to economic trends... breakage in terms of how the industry is splitting into a couple of different camps.. PCs in a world of hurt.. ;-)