McNealy Comes Out Swinging

SAN FRANCISCO—Sun Microsystems Inc. CEO Scott McNealy was on the attack this morning at a pre-LinuxWorld press conference announcing Suns new Intel-based Linux servers.

The Santa Clara, Calif., company will be feeling the squeeze this week, as IBM and Hewlett-Packard Co. announce plans to port Solaris users to Linux. But Sun is responding with an end-to-end enterprise strategy of its own, a key part of which is the new Intel-based LX 50 server capable of running Solaris 9 or Suns own Linux distribution.

“We have an end-to-end architecture, from smart card to supercomputer,” said McNealy at a press conference here at the Palace Hotel. “We are going to partner like crazy and be totally focused. No games or digital cameras from us.”

While McNealy was on stage to announce the new server, he spent most of his remarks defending Suns market position and taking aim at competitors. “Were a value engineering company, not a financial engineering company,” he said of the recent round of corporate accounting failures. “We are financially sound, with a strong balance sheet and $5.9 billion in cash.

“We are as strong as any non-convicted monopolist in the industry,” McNealy quipped.

McNealy pointed out that contrary to popular belief Sun is doing well versus IBM and HP/Compaq in the server space, showing unit numbers that in the second quarter of 2002 Sun held a 34.5 percent share, over HPs 19 and IBMs 14.6. And in revenue, Sun brought in $945 million to HPs $418 million and IBMs $410 million.

“We crushed them in the March quarter,” he said. “We crushed the competition at the high end and blew their pants off at the low end.”

While Sun will be taking advantage of the Intel platform for the LX 50 servers, he emphasized that the box will be for edge computing, 32-bit needs, and will offer an upgrade path to 64-bit platforms—something Intel cannot offer, he said.

“Itanic–I mean Itanium–is just rearranging the deck chairs around,” McNealy said. “Intel was announcing 64-bit when we were all in high school.”

McNealy also reserved criticism for Microsoft Corp. and Dell Computer Corp. Taking a shot at Microsofts antitrust trial testimony, McNealy said Suns products will never be so tightly integrated that they cannot be swapped for another. “We are integratable, not integrated,” he said. “You will never see a Sun employee under oath say that its so wedged together that you couldnt take out a piece.”

Regarding Dell, Sun has the edge there too, McNealy said. “We are price/performance competitive,” he said. “We can offer two OSs for free, and they have to buy Red Hat and Windows.

“Why would you buy a two-way Linux box from anyone else but Sun?”

In the coming months, enterprise users will begin to answer that question.

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