Suns McNealy Sees Bright Future

SAN FRANCISCO—Sun Microsystems Inc. plans to grow its research and development spending over the next three to five years, CEO, President and Chairman Scott McNealy told a packed house in his keynote address here at the Sun Network conference on Wednesday morning.

"We put $5.9 billion in the bank during the bubble, and cash is still king. So well protect that R&D budget," he said. "We will be making a lot of technology acquisitions in an opportunistic way. Its far easier to buy companies now than it was a couple of years back."

Sun has sold more than 300,000 licenses of Solaris 9 since it shipped earlier this year. The company has integrated many components of the SunONE application development platform into the operating system.

"There are many more things like portals, mail and other components that we are going to integrate into the operating environment. We recently acquired a company called Afara Websystems Inc., a company that develops next-generation, SPARC-based microprocessor technology, and there will be many more such deals," McNealy said.

The conference, which Sun said has drawn 8,000 attendees from 35 countries and more than 200 partners across 14 industries, is designed to address customer needs and solve their problems. "We dont have all of the solutions here at Sun, but we have many of them," McNealy said.

Market share gains show that Sun still holds the lead in the Unix market, as it had for the past three years, while the latest International Data Corp. figures rank Sun No. 1 in the Unix unified storage area, he said.

"Were going to interoperate and integrate with the Windows world, with the open source community and anything else out there. We are committed to choice, innovation and value for our customers," he said.

Giving examples of how Sun was committed to choice, McNealy said its interfaces and protocols are all open and published to allowed choice, giving customers low switching costs when they move away.

"Its often hard to switch to Sun, but its really easy to switch away from us. We are ensuring the customer will not get locked in. And our stuff is completely integratable. We will not say that if you pull our browser out well have to pull Solaris off the market," he quipped, referring to Microsofts claim that if the browser were stripped out of Windows it would destroy the product.

Turning to its StarOffice desktop productivity suite, McNealy said there have been some 7 million worldwide downloads of StarOffice. Sun has also donationed $6 billion worth of StarOffice software to students in China, the Far East, Europe and Africa, McNealy said.

McNealy touted Suns innovation. "Later this year as we start to drive new architectures around blade architectures, youll be hearing a lot of announcements around storage and virtualization capabilities," he said.