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Politics : Formerly About Advanced Micro Devices -- Ignore unavailable to you. Want to Upgrade?

To: Dinesh who wrote (142545)	2/12/2002 2:31:48 AM
From: d[-_-]b	Read Replies (2) \| Respond to of 1578925

Dinesh, re: So, that would a litmus test, wouldn't it? May be Sun knows a few more things than we do. Maybe not, seems IBM, HP and Compaq have all dropped their processor development and placed their future in the hands of Intel's Itanium and follow ons. Just a few days ago, Larry Ellison, no big fan of Intel said Intel's IA-64 is the future. Seems to have made a big impression on Scott McNealy. re: Sun btw is also losing a lot of 1/2 cpu webservers to Linux PCs and while those are cheaper in unit price, the volume is probably substantial. Yes, they are. Hence the announcement that they would adopt Linux and sell more x86 Linux machines. They already have the Cobalt line of AMD and Intel based 1u rack servers - but the industry wants blades. Both HP and IBM are selling Intel P3 based blade system with high density all running Linux. re: The 64-256 processor Linux IMHO is not a current threat. Future, ah! we shall see. IBM just announced a system with that capacity and Larry Ellison of Oracle is saying Linux on IA is the future and you don't see the threat? Sun has been Oracle's biggest bread winner for years and the CEO up and said Sun is dead end if they don't get with the program. re: I don't see customers driving in big numbers to load up on those S/390 class machines running Linux Of course they won't sell that many, but the Sun E10K line is getting long in the tooth for those that bought a few years ago. Customers will need to decide if they want the E15K or switch to a most likely cheaper IBM Linux based machine running the same DBM (Oracle in many cases). re: Maybe you have better data, you can share here. Do you have any or would you actually see sales of mainframe class Linux systems or was that just a figure of speach?

To: Dinesh who wrote (142545)	2/12/2002 1:32:42 PM
From: tejek	Respond to of 1578925

Then again, Sun may not know what its doing! ____________________________________________________________ Sun Not in Turnaround ... Yet By Jim Seymour Special to TheStreet.com 02/12/2002 07:40 AM EST The last time I wrote here about Sun Microsystems....Sun Worshippers Are About to Get Burned -- I got a ton of angry reader mail from aforesaid Sun-worshippers. I guess I'm about to get a second load now. Sun closed at $12.46 when that column ran on Nov. 21, 2001, and Monday it closed at $9.76. Being right is no defense, etc. Once again I'm hearing "Sun has bottomed," "Sun cleaned it all up in the one messy quarter" and "Now's the time to pile into Sun." Huh? The Stock Sun Microsystems Recent Stock Price: $9.76 52-Week Range: $7.52-$28.375 P/E Ratio: n/a Market Capitalization: $31.6 billion Float: 3.18 billion shares Short Interest Ratio: 0.63 Institutional Ownership: 51% Source: Yahoo! Finance Sun reported a stinko second quarter, losing $431 million on sales up 9% quarter over quarter. In the year-ago quarter, Sun earned $423 million, so this was quite a flip. Execs pointed out that certain special charges -- for example, $511 million for restructuring -- suggested that Sun had swallowed hard and had intentionally taken a big, bad quarter in the interest of cleaning up the books and making money again going forward. CEO Scott McNealy even said last week at Sun's analyst day that he thought the company would return to profitability by summer. Well, good luck, Scott. But I think this focus on the financials misses the real problems: Sun is selling the wrong products, at the wrong prices, in an incredibly expensive way. In other words, the problem isn't the financials; it's the underlying business that has turned sour. Take a look at a chart of Sun's share price. Sun's business was stalling out years ago, when the Internet came along; demand from the beginning of the Internet boom buoyed Sun, fueling dramatic growth and an even more dramatic run-up in the stock price. In effect, the Internet boom "saved" Sun. Now, with thousands of Sun servers formerly in use at dot-coms floating around on the used-equipment market, with Sun storage systems stalling and with a determined assault from below by the likes of Dell, Compaq, IBM and Hewlett-Packard on both servers and storage, Sun is like a deer frozen in your headlights. At that analyst meeting last week, Sun showed off a new "blade" server, which is a good thing, if late; it talked about new storage systems based on Hitachi hardware, which may be a good thing; it sort of adopted Linux, while competitor IBM was embracing Linux. The Stats Year Revenue (in billions) EPS 2000 $15.721 $0.55 2001 18.250 0.42 2002* 12.865 -0.08 2003* 15.931 0.21 *Thomson Financial/First Call estimates. Source: Company reports What it didn't talk about is how much market share, and market "mindspace," it had lost. The products are wrong, and more, the prices are wrong: Sun is still the high-priced spread. Even worse, Sun maintains a high-cost selling environment, reminiscent of minicomputer sales in the '70s. A company with about 43,000 employees today, Sun needs to cut that number to maybe 25,000 workers to bring costs in line with potential sales. But it won't, maybe can't, cut that deep. I don't think this Sun is going to rise much anytime soon. It's not just that it's not headed back to the $50s and $60s. It's not headed back to the $30s ... and maybe, not even to the $20s. Anytime soon, that is. Dead money. -------------------------------------------------------------------------------- Jim Seymour is president of Seymour Group, an information-strategies consulting firm working with corporate clients in the U.S., Europe and Asia, and a longtime columnist for PC Magazine.