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

To: Prognosticator who wrote (42730)	4/4/2001 8:11:27 PM
From: A.L. Reagan	Read Replies (2) \| Respond to of 64865

A Hard Look at Sun's Future Contributed by Brendan Choi osOpinion.com April 4, 2001 One day at work we were chatting about the future of the high-tech economy, and a co-worker asked who we thought would still be around in 30 years. I mentioned big companies like IBM, Hewlett-Packard, Cisco and Oracle -- but not Sun Microsystems. Why not Sun? While Sun leads the high-end UNIX market, Sun is still a small company that specializes in servers and workstations. Its competitors, IBM and HP, are much larger companies with highly diversified product lines, and they are not dependent on UNIX sales for survival. While IBM and HP can have poor server sales for the next 30 years and still survive, Sun cannot. In bad economic times, HP and IBM can reorganize and fire thousands of more people than Sun. Sun is already small; it cannot streamline too much without destroying morale and productivity. Oracle Says Sun is No. 1 in the UNIX world because Oracle makes their database for Solaris, Sun hardware gives the most bang for the buck, and Solaris is popular among engineering students. We buy the server for the database, not the other way around. The database is the most important thing to a customer, and Oracle will probably be the database leader for years to come. If Oracle decides not to support your platform, you will lose server sales. Larry Ellison has always dreamed of a network computer for Oracle. He never said the NC had to be Sun. In other words, Sun needs Oracle more than Oracle needs Sun. Pricing is the Key While Sun's product performance, reliability and service have always been second-rate, Sun is selling more servers because it offers acceptable performance and reliability at a reasonable price. As long as IBM and HP are obsessed with perfection, they will lose server sales to Sun. Sun was born in a university, and still has the strongest following in schools. Java and Solaris's network capabilities are well known to engineers in college. When they graduate and enter the corporate world, they preach the Sun message. Instead of catering to the needs of young engineers, HP and IBM maintain a boring old-fashion image and are thus losing server sales. Perfect Partnerships To maintain its current position, Sun must continue to work closely with Oracle to make Oracle perform better on Solaris than other platforms, make high performance servers at an affordable price, and offer innovative technologies like Java to attract young engineers in school. The Big Thing this decade is SAN and storage availability, and in an effort to diversify and strengthen itself, Sun has entered this industry to compete against EMC in hardware, and against Veritas in software. But in both areas Sun is losing badly. Sun's T3 disk array solution is good for small environments, but is not selling as a large enterprise solution like the EMC Symmetrix. The T3 can theoretically compete against EMC, but this is not very apparent in Sun's marketing. A little T3 array that you can use as a footrest looks very different from a towering Symmetrix. During the mid-90s, Veritas became popular with its powerful Volume Manager software. Sun also offered a software RAID, but it was not designed for large storage environments. Today, Veritas is making more than Volume Manager; it is leading the storage software industry with products like Veritas Cluster Server and NetBackup. Sun Cluster has not been as scalable as VCS, and Sun has never offered a backup solution for its own servers. Battle Plan Being both a hardware and software company, Sun is uniquely positioned to fight EMC and Veritas. Sun's strategy against them should go something like this: Sun has to first make large storage hardware superior to EMC's. It must produce an EMC-killer. Sun has to make a storage tower that is larger, more compatible and more scalable than a Symmetrix. Something that looks large and impressive always attracts customers. Once their massive storage towers become popular, Sun can afford to limit support for EMC. EMC is a hardware company, and it needs Sun more than Sun needs EMC. If Sun offers superior storage and continues to lead server sales, life at EMC will be a living hell. Sun must also produce storage software solutions superior to that of Veritas's upcoming SAN Volume Manager and Cluster Server. If Sun integrates their software with Solaris and customers find Sun's software more compatible and affordable to use, support for Veritas can be eliminated. Like EMC, Veritas needs Sun more than the other way around. Long View If Sun can put more R&D in storage availability solutions, it can dominate this new industry and strengthen itself. If Veritas and EMC were to ever unite and make a SAN operating system/platform for Oracle, like the NC Larry Ellison dreams about, Sun would be totally destroyed. Sun must not let that happen. Sun must act now so it can be around in 30 years. --------------------------------------------------------- That was just some guy's opinion posted on a "techie" message board and picked up by network world fusion, but wondering if there's much validity to the concerns. This thread tends to obsess over MSFT as the major threat, so the guy's thoughts are at least a different spin. Here's the link: osopinion.com