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

To: The Ox who wrote (8641)	3/28/1998 1:40:00 PM
From: David B. Higgs	Respond to of 64865

The current issue of Business Week has the following commentary on Sun and Java. Sorry if this has already been posted. businessweek.com COMMENTARY: JAVA CAN BE A CONTENDER--IF SUN LETS IT Ever since Sun Microsystems Inc. invented Java, a computer language for creating programs that run on computer networks, Chief Executive Scott G. McNealy has boasted that it would roast Microsoft Corp. Now, it's Java that's getting roasted--and not just by the software giant. On Mar. 20, Java partner Hewlett-Packard Co. broke ranks. Accusing Sun of keeping too tight a rein on developing new versions of Java, HP has created its own Java variant for noncomputer devices such as printers. Meanwhile, other Java backers are muttering about Sun's heavy-handed stewardship of Java's evolution. Even avid Java programmers carp about its shortcomings. Can McNealy keep Java perking? Yes, but only if he--along with Java partners and customers--quit their petty infighting. Java may never knock off Microsoft's Windows. But faults and all, Java is still an important breakthrough: A system for creating software that runs, unaltered, on all sorts of computers and devices. That could make doing business across the Internet simpler and could transform the software business in the network era from a one-horse race led by Microsoft to a true contest. This all depends, however, on whether Java becomes a true standard. So far, McNealy's approach has been to insist on strict terms for other companies' use of ''100% Pure Java'' to enforce uniformity. When Microsoft developed a Windows-only version of Java, Sun sued for breach of contract and, on Mar. 24, the U.S. District Court in San Jose granted a preliminary injunction preventing Microsoft from using the Java logo. Problem is, such victories may not help McNealy with his bigger goal--to make Java a widely used standard. Nor do his disparaging remarks about Microsoft and its products do more than amuse geeky aficionados of Sun's Unix operating system. For Java to succeed, McNealy needs to befriend Windows programmers, not insult them. Says Stan Wang, CEO of Java startup Infospace: ''We don't want to be in the middle of a holy war.'' McNealy's energy and skill would be better spent in fixing the broken promises he has made to Java enthusiasts. Its shortcomings--bugs, primitive programming tools, and relatively slow performance--have allowed Microsoft to belittle the original and offer improvements tied to Windows. As HP's defection shows, Java could splinter into incompatible camps--trashing its promise of programs that can ''run everywhere.'' The situation is coming to resemble what happened a decade ago with Unix, another would-be universal standard: Each computer maker tweaked it, and soon programs had to be written anew for each brand--while Windows delivered guaranteed uniformity and became the overwhelming standard. How to avoid a rerun? One bold step McNealy should consider: Cut loose Sun's JavaSoft unit that controls Java now. With adequate investment by partners such as IBM and Oracle Corp., JavaSoft could address the gaps vexing them and other partners--and quell fears that Sun is shaping Java to benefit its $8.5 billion computer business. ''It would be a benefit to the whole industry,'' says Gary L. Steele, CEO of Java startup Netiva Software Inc. STRONG START. A little cooperation would help, too. Java already is off to a strong start, running on 70 million PCs and other computers. But if more computer makers create more variants, that momentum will slow. That's why HP's split is shameful. HP CEO Lewis E. Platt--whose company still backs Sun's Java for computers--should tell his managers to stick to what programmers want: the ability to write their programs once and run them anywhere. HP's move--backed by Microsoft--endangers that. So far, ''Java hasn't lost any momentum,'' says Goldman, Sachs & Co. analyst Laura Conigliaro. But in a business this fast-moving, customer perceptions are as important as reality. And the perception today is that Java is getting diluted. Unless Sun and its partners can wise up and start looking past their own noses, that perception could become reality. Then, it's game over: Bill Gates wins again. By Robert D. Hof

To: The Ox who wrote (8641)	3/28/1998 3:18:00 PM
From: E_K_S	Read Replies (1) \| Respond to of 64865

Hi Michael - I estimated some conservative numbers and was very surprised at the possible per share contribution from the storage area. I think it is possible for Sunw to capture 10% to 20% of the NT multi-user storage market. As you stated,it will take some time for them to ramp up but the article I posted stated that SUNW's product was 6 month's ahead of EMC's solution. Assume a $4.8 Billion industry (FY 1998) market and Sunw can capture 20%. This is $960 million sales for 1998. The net profit margin should be between 20%-30%. Assume a 25% net profit margin. This translates to $377 million in new product line earnings for 1998 which is equivalent to $0.64 per share for the year ( or about $0.16/share per quarter ...just from the NT storage business). If this is correct, this new business line represent 29% of Sunw's earnings and the analysts and the company really has not discussed this too much. Where did I go wrong? EKS