Suns Still on Fire
Buoyed by a second quarter that saw gains in server and storage revenueincluding more than $100 million in sales of its "Niagara"-based systemsSun Microsystems is returning to Wall Street Sept. 13 to stake its claim as a top solutions company.
In New York, Sun will unveil upgrades to its low-end SPARC systems as well as blade servers for the telecommunications industry powered by the multicore UltraSPARC T1 chip, formerly code-named Niagara.
But more than that, the Santa Clara, Calif., company is looking to pitch to the financial services industryamong the largest of Suns customer segmentsthe idea that it is on its way back, after several disappointing years, with solid road maps of innovative systems and storage products tied together by the Solaris operating system.
"Those are companies that make their living on the basis of technology advantage, so our technology and our road map delivers a competitive advantage to those folks," Sun President and CEO Jonathan Schwartz said in an interview. "The message is going to be a very simple one, which is were still listening. Were there to give folks an update on the innovation and the technology road map."
Suns aggressive realignment of its server businessnot only with Niagara but also with its adoption of Advanced Micro Devices Opteron chiphas helped fuel a resurgence that saw the companys second-quarter market share and revenues grow sharply enough to enable it to leapfrog Dell into third place, behind IBM and Hewlett-Packard, according to market researchers IDC and Gartner.
Schwartz said he expects the trend to continue, with Sun reaching four points of operating margin by the end of the year, with a longer-term goal of 10 points. Much of that will be done on the back of Suns R&D investments, Schwartz said. The company will break away from point products and technology that offer little return and will instead focus on more solutions-oriented offerings.
The latest example was Suns decision to scuttle the planned release of "Serrano," a low-end UltraSPARC IIIi+ processor. Instead, the company in New York will unveil the Sun Fire V215, V125, V245 and V445 entry-level servers with the UltraSPARC IIIi and enhanced networking capabilities, including the use of the faster PCI Express rather than PCI.
In comparison, Suns Niagara-based Netra bladesthe Netra T2000 and CP3060 ATCA (Advanced Telecom Computing Architecture)illustrate the companys direction, said John Fowler, Suns executive vice president of systems. The multicore processors offer up to eight cores that each can run four instruction threads. Sun currently offers the chip in its T1000 and T2000 servers.
"When you look down the road, what youll see is that Niagara 2 and its predecessors will be the bulk of the volume SPARC business," Fowler said.
The plan makes sense to David Schairer, chief technology officer of hosted application provider Concentric, a longtime Sun user. Concentric has several generations of Sun technology in its Fremont, Calif., data center, including T2000s. The ability to grow capacity within the same footprint is key for the fast-growing company.
"Right now, Niagara processors are ahead of anything that Intel or AMD has on the market," said Schairer in San Jose, Calif.
Fowler envisions a server lineup with Suns Opteron-based Galaxy servers as its x86 offering, Niagara in the low end for SPARC, and the upcoming Advanced Product Linedeveloped with Fujitsuand later servers based on the upcoming "Rock" SPARC model at the high end.
Niagara 2, set to debut in the second half of 2007, will still offer eight cores, but each will be able to handle up to eight threads. In addition, there will be enhanced security and memory capabilities, Rick Hetherington, chief architect and distinguished engineer at Sun, said in an interview. Sun has taped out Niagara 2, and "it is fully functional," said Hetherington.
Charles King, an analyst with Pund-IT Research, in Hayward, Calif., said Sun has made great strides under Schwartz and with its newest products to "grab the attention of the industry, which is fairly positive." Nonetheless, Sun is still the only top OEM with a single x86 strategyeven Dell has plans to adopt Opteronwhich could hurt Sun if Intel can rebound with its latest round of server chips, King said, though Sun officials have not ruled out using Intel chips in the future.
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