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

To: gdichaz who wrote (8175)	3/9/1998 10:41:00 PM
From: Carl Wysocki	Read Replies (1) \| Respond to of 64865

Chaz, your opinion may be flawed, but then so is mine, but neither our opinions is as flawed as the market's treatment of Sun. I'm actually hoping Sun goes down more, so I can add to my already overweighted position, this time for a longer period of time than in Oct/Nov, when I was so stupid as to try to play the market instead of the longer term fundamentals. I'm speaking from memory here, so my figures may be off, but the message doesn't change. According to IDC, which isn't the best source for determining market changes (aka "paradigm shifts", ugh), The UNIX desktop market size is around 750-800k units per year, and not expected to grow over the next 5 years. The NT market on the other hand, (I believe) is greater than the UNIX market and growing smartly. As long as Sun continues to gain share in the UNIX market, moreso as a battle of attrition, CPQ, DEC, DELL, HWP, IBM, et. al. can slug it out for leadership in the low end of the market, and leave Sun relatively unscathed. If Sun captures part of this NT marketplace, that's upside, for me. The server side is where the action is. I think the server market was something like $50 billion in CY 1996, growing to something like $70B by 2001. Not fantastic growth in the total market, but at the time, Sun was only playing in less than half this market. The E10000 has added the other half of the market, and this is the very high end that NT is still at least 3 years from matching (in today's capabilities-- maybe it'll only be 2 years behind in 2001, for Sun's not resting on its laurels). Yeah, NT is exhibiting explosive growth, but my recollection is that this is less that 20% of the future market potential, so let the iron mongers fight it out in this segment. The other wild card is storage and the introduction of high end open storage products from the Encore acquisition are still to be realized. I doubt that Sun will knock out EMC, but there's plenty of easy pickings lower on the food chain. Plus, one of these days, chip and software license fees will be coming in from Java. In addition, according to some industry analysts, Services revenues should really kick in in FY 1999. Looks like the "throwing out the baby with the bath water scenario" with the current market reaction, so I'll be buying on the way down, if it continues down. I outsmarted myself late last year, when I'd bought at 30 1/2 and sold at 33, figuring it would go back down. The stock never looked back after I sold.( message to Carl, you are for shits on market calls--stick to individual stocks). Anyway, I'm only 20% margined so I have a bit of leeway and opportunity before I flame out. Carl