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To: Roger Arquilla who wrote (17090)	7/8/1998 6:08:00 PM
From: Alan Bershtein	Respond to of 29386

From Today's IBD Sun Micro Puts A Lot Of Eggs Safe In Storage Date: 7/8/98 Author: Michael Tarsala As much as half the cost of large computer systems is for mainframe and server storage, says Janpieter Scheerder, president of Sun Microsystems Inc.'s Storage Division. That's Sun's incentive to seek a larger piece of the storage pie. Sure, Scheerder wants to sell more storage to Sun's own customers. But there's a bigger opportunity if Sun can take business away from such rivals as IBM Corp.'s mainframe storage line, Scheerder says. To do that, in November Sun bought the storage business of Fort Lauderdale, Fla.-based Encore Computer Corp. for $185 million. And in April, Sun reorganized, creating the storage division that Scheerder heads. He had run the company's SunSoft software unit. Encore gives Sun expertise in a fast-growing niche called network-attached storage. Network-attached storage devices are servers with processing power. They do only one thing: store data on a network. Other, general- purpose servers also store data, but those machines aren't as fast as a storage servers. Sales of network-attached storage devices will rise about 84% a year through '01, to $6.6 billion from $580 million last year, says San Jose, Calif.-based market researcher Dataquest Inc. Sun says it plans to double its storage revenue by '01. Though the company wouldn't give figures, analysts estimate Sun will sell more than $2 billion in storage hardware and software this year. Scheerder recently spoke with IBD about Sun's chances of reaching that goal. IBD: Sun is known as a computer company. Why the sudden focus on storage? Scheerder: Storage is at the heart of everything we do. I don't know when (this business) started to be called the information systems industry. People said a long time ago that (information technology) really is memory storage. We took a lot of turns around it and learned how to build computers . . . but storage on the Net has been with us for the past 12 years. At the extreme, storage is our most important competency. At the minimum, we can say it's one of our key competencies. It's a flip statement, but you can reboot your computer - you can't reboot your data. IBD: So what's new about Sun's storage, other than the new division and your new job title? Scheerder: Where we haven't been involved is with mainframe storage. We understand the mainframe world, but not the IBM world. With the acquisition of Encore last year, all of a sudden we have that capacity. This acquisition will allow mainframe access to data that comes from Hewlett Packard's (operating system), IBM's (mainframes) or any other source -which is exactly what people want. It's logical now that storage is shared. IBD: How can you use Sun's strengths in the workstation world to sell mainframe storage? Scheerder: (Internet service providers) think Sun. They use our disks and our storage. All Web pages come from somewhere - and that somewhere is storage. We do a lot of storage already. We believe users don't want to (distinguish between) computers anymore. They want information. Take a look at what business people use: They're beginning to get computer services from their banks. You've got voice mail from AT&T, and you don't call it an application -it's a service. The business here is mission-critical computing. And the more the Internet and intranets are part of how you run a company, the more Sun becomes a part. IBD: There are more-established players in network-attached storage. How do you compete against them? Scheerder: There's EMC. They're huge. They have proven that people want to buy IBM storage from people (other than IBM). The advantage we have over EMC is in the Internet area. What's growing faster than the Internet? I think that (Internet knowledge) will drive storage immensely. That, and IBM has its sights set on EMC. IBM wants its money back. We can sneak in. IBD: What's your edge over IBM? Scheerder: People go to IBM for different reasons. You know why they go to Sun: They want to do something that involves networking. No one gets fired putting up a Web site with Sun. Just as no one gets fired using Microsoft's productivity suite - unless you work for (archrival) Sun. We know how to work in the open-standard systems world, and I think people trust us with that. Now we're pushing for open storage. Storage should be the meeting point of technologies. IBD: What's your marketing challenge? Scheerder: We have to get the concept across: ''Don't store on your computer, store on the network.'' The hard part is people have it in their heads that the computer and storage are connected. If everyone wants to have storage locally, then you multiply the number of computers people have. (But if) you share resources, you save money. (C) Copyright 1998 Investors Business Daily, Inc. Metadata: SUNW IBM ENCC HWP T EMC I/3572 I/3573 I/4891 I/3578 E/IBD E/SN1 E/TECH