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2001, May week 2

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See also:- View from the Hill - Why Did Sun's Revenue Growth Hit a Brick Wall?
Squeak! - The top 10 fastest growing storage companies in the US

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IDC Forecasts Worldwide IS Outsourcing Services Spending Will Surpass $100 Billion by 2005

May 14, 2001 - Worldwide spending on information systems (IS) outsourcing services reached $56 billion in 2000 and is expected to surpass $100 billion by 2005, according to IDC. Although the United States will continue to account for the bulk of this spending, all companies around the world are increasingly turning to outsourcing to remain competitive in the global marketplace.

According to IDC, the United States will continue to spend the most on IS outsourcing services, accounting for 44% of worldwide IS outsourcing spending in 2005.

"Recent solid growth across several industries in the United States is the result of continued strong demand for multiservice IS outsourcing contracts that can include data center operations, desktop management, LAN/WAN management, application development and maintenance, help desk support, disaster recovery services, and Internet and ebusiness services," said Cynthia Doyle, program manager of IDC's IT and Offshore Outsourcing Strategies research.

Western Europe is the second-biggest spender, with spending on IS outsourcing services increasing at a compound annual growth rate (CAGR) of 10.3%, from $16 billion in 2000 to more than $26 billion in 2005. IDC forecasts the rest-of-the-world market segment will experience the highest spending increase during this time, with a CAGR of 21%. On its heels is Asia/Pacific, with a 2000-2005 CAGR of 20%.

Although the traditional drivers of outsourcing - to reduce operation costs, improve IS flexibility, focus on core competencies, and increase operational efficiency - still stand, IDC cites mounting evidence that companies have turned to outsourcing for more strategic reasons, including keeping up with cutting-edge technology, building partnerships, creating value for the organization and its customers, and broadening infrastructure and operational reach.

IDC's report Worldwide IS Outsourcing Market Forecast and Analysis, 2000-2005 (IDC #W24547) analyzes the IS outsourcing market. U.S. and worldwide IS outsourcing spending forecasts are provided by region through 2005. ...IDC profile

See also:- Solaris Training, Repair and Maintenance, Storage Services
IDC Forecasts Worldwide IS Outsourcing Services Spending Will Surpass $100 Billion by 2005

Sun Server Sales Outpaced Key Competitors in United Kingdom

Gartner Dataquest Says Worldwide Workstation Shipments Declined Nine Percent in the First Quarter of 2001

FREE Sun Solaris(TM) Made Simple Workshop

Sun's New NAS Appliance Scales to Over 10 TB

National Instruments Celebrates Quarter Century of Innovation

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Megabyte saw great potential for speeding up his quest using infinitely strong rubber band technology.

View from the Hill

Time for changes at the top in Sun?

I communicate with more Sun users and VARS than probably anyone else on this planet, but you don't need my privileged view of this market to know that all is not well in the Sun market. Here are some of the apparent symptoms:

  • Sun is shipping SPARC processors with a top speed of 750MHz, whereas Intel architecture servers clock at twice the speed. OK - that's happened many times in the past, and you could argue that running a 64 bit OS at 750MHz is every bit as fast in a multi processor environment as running a 32 bit OS on 1.5GHz Pentiums. But the biggest Wintel servers aren't just snapping at Sun's heels any more. They're already in the datacenter.
  • All the easy customers have gone. The get-rich-quick dot-coms which were Sun's fastest growing customer segment are dust. The slowdown in the US is hurting everyone, but Sun is going to have to kick its dot-boomer habit.
  • Enterprise storage represents a huge growth opportunity for some computer companies. Unfortunately, Sun started behind the leaders, and is growing its storage business at a laggardly rate compared to the fastest storage companies. Sun says their storage business is growing, but it can still grow while losing market share. OK, during the last year, Sun has acquired a clutch of storage companies and changed the top management in this division, but the metrics on our sister publication suggest that most storage buyers are underwhelmed by Sun's changes. This is a market where you have to delight your customers, and just doing the same old stuff as everyone else is not good enough. Actually maybe all markets like that now...
  • Sun is still in denial about the desktop. You can't help getting the impression that if they could try out that DeLorean in the movie "Back to the Future" - Sun's senior management would like to go back to the early 1980's and have another go at taking on Microsoft and the PC market. Sun invests and wastes a lot of economic energy wishing it was Microsoft. This creates amusing opportunities for journalists, but doesn't achieve anything constructive. IMHO Sun should spin off Java, Jiro etc maybe as open source projects. Those individuals who wanted to join the anti-Microsoft playpen could be given inducements to join the new start up. Then Sun should recruit a bunch of top managers from Dell or Intel who really know the PC business, and re-engineer better solutions for users who want to use SPARC servers in the real heterogenous world.
  • As has been widely reported - Sun is closing down operations for a week in the Summer. Maybe not so well known, is that Sun seems to be planning major surgery on its reseller channel. That, could be a very big mistake in the long term. Currently less than 2% of the computer VARS in the US sell Sun Microsystems or compatibles. VARS have to invest a lot to understand the SPARC and Solaris environments. If Compaq cans a VAR, they can always go and find another Wintel solution to sell from somewhere else. If Sun cans a VAR, that company may decide that the game isn't worth the candle, and be lost as a Sun technology compatible channel forever. At a time when Sun should be working hard to make more friends in the computer business, alienating friendly VARS is a dumb idea. The channel strategy which works for Dell Computer, won't work for Sun.

The time comes in all organizations when they lose direction, and maybe could be better managed by people who are not necessarily their founders. The top management gets older, and starts becoming resistant to change. Or in the case of Sun, maybe boredom is creating an urge to make too many of the wrong kind of changes. There's also a problem caused by believing your own hype. During the dot-com boom, Sun was a real beneficiary of that hype. Today, it doesn't help. The hubris factor resulted in Apple giving away the dekstop PC business in the early 1980's. Before Gerstner, IBM was a lumbering elephant, with everyone taking pot shots at its business. It took a long time to re-energize IBM, because the decline had been going on so long.

Sun's market started to change dramatically about 9 months ago. For a while it seemed like it would be business as usual, and Sun's revenue growth continued on momentum. But today Sun seems to be shooting in too many different directions. They should concentrate on making the world's best servers and multiprocessing operating system. When they re-establish their lead in that area, there may be more time for the play pen.


Sun Microsystems Sun Server Sales Outpaced Key Competitors in United Kingdom

PALO ALTO, CA - May 10, 2001 - In calendar year 2000, Sun Microsystems, Inc. surpassed IBM in total server revenue in the United Kingdom and grew faster than any other major server company in Western Europe, according to Gartner Dataquest.

In the United Kingdom, Sun posted 52 percent growth year-over-year in total server market revenue (which includes systems based on UNIX®, Microsoft Windows NT, MVS mainframe and all other operating systems). Sun also grew faster than its competitors in Germany, Sweden, France, Italy, and Switzerland. In 2000, Sun grew 35, 46, 37, 58, 60 percent respectively year-over-year. When looking at all of Western Europe, Sun grew 44 percent over that same period.

"In Europe we're taking IBM out one country at a time, and the UK is a significant market", said Shahin Khan, vice president of computer systems at Sun. "The numbers indicate that data center managers prefer Sun Enterprise[tm] and Netra[tm] servers. The recent introduction of the new Sun Fire[tm] server line will further our ability to provide superior customer solutions." ...Sun Microsystems profile

Editor's comments:- if you're confused by the positive sounding numbers in this release, compared to the less positive results reported by Gartner below, the reasons are:-
  • Sun's server sales grew faster than workstation sales.
  • This press release from Sun is about last year, whereas the numbers below relate to the first quarter of this year. According to reports we have had, Sun may have mitigated the first part of the slowdown in Q4 last year by stuffing its VAR channels with inventory, thereby making Q4 2000 look good. Of course, that resulted in Q1 this year looking worse.
  • The effects of the IT industry slowdown in the US didn't affect Europe at all in 2000. And even as recently as a few weeks ago most VARS in Europe didn't know what I was talking about when I asked if the slowdown in the US had started to affect them.
Gartner Dataquest Gartner Dataquest Says Worldwide Workstation Shipments Declined Nine Percent in the First Quarter of 2001

SAN JOSE, Calif., May 10, 2001 — Worldwide workstation shipments totaled 361,298 units in the first quarter of 2001, which is a 9.2 percent decline over the same period last year, according to preliminary results from Dataquest Inc., a unit of Gartner, Inc. Workstation shipments in the first quarter of 2000 were 398,028. While the poor overall performance is a continuation of the soft U.S. market, Gartner Dataquest analysts believe that the slowdown in the U.S. economy is only part of the reason the workstation market is doing poorly.

"Following unnaturally high growth rates from 1996 to 1999, Intel architecture (IA) workstations sales may now be reaching saturation, with some end users choosing high-end PCs over low-end workstations," said Pia Rieppo, principal analyst for workstation coverage for Gartner Dataquest.

According to Rieppo, PC versus workstation differentiation is an ongoing struggle for system vendors. It is made difficult by technology and price parity between high-end PCs and low-end workstations and changes in Intel product positioning, especially with respect to dual processor scalability and Web pricing tools that allow end users to independently configure and compare systems.

Three of the top-tier vendors experienced negative growth rates in the first quarter of 2001 (see Table 1).The top two vendors made up nearly 50 percent of the market. Dell remained in the top spot with a 30.4 percent market share. Sun Microsystems followed with a market share of 19.0 percent.
Table 1
. Shahin Naftchi, senior analyst covering servers and workstations for Gartner Dataquest's Computing Platform Worldwide group, notes that this is the first quarter of negative year-over-year growth since Gartner Dataquest began quarterly data collection in 1996. Naftchi also speculates the culprit is a lack of differentiation.

"The introduction of Windows 2000 makes it even harder to differentiate high-end PCs from uni-processor workstations," Naftchi said. These results are preliminary at this time. Final statistics will be available soon to clients of Gartner Dataquest's Workstations Quarterly Statistics Worldwide program. This program offers a comprehensive, global market information service that analyzes and documents the workstation industry. To subscribe to these programs, please call +1 408-468-8000. ...Gartner Dataquest profile

See also:- Market research & STORAGE analysts
Network Data Solutions FREE Sun Solaris(TM) Made Simple Workshop

Network Data Solutions is offering a FREE Job Skills Workshop Series: Sun Solaris Made Simple will be presented on Saturday - May 12th, from 9 AM - 5 PM. This hands on seminar will introduce users to the features and functions of the Solaris(TM) 8 operating system. Find out why this is a primary backbone technology for the Internet. Topics include login, navigation, file permissions, searching, using applications such as telnet, ftp, and user commands.

Location:- Network Data Solutions Corporation, 26210 Industrial Boulevard, Hayward, CA 94545, phone (415) 863-1142

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Sun Microsystems Sun's New NAS Appliance Scales to Over 10 TB

PALO ALTO, Calif. - May 8, 2001 - Sun Microsystems, Inc., today introduced the Sun StorEdge[tm] N8400 and N8600 filers, further expanding its presence in the NAS market. The Sun StorEdge N8000 filer series delivers the industry's most scalable family of NAS appliances, growing from 200 gigabytes to over 10 terabytes (TB) of usable capacity in a standalone configuration. Sun customers can now add robust NAS storage to their end-to-end Sun infrastructure and achieve a low cost of ownership with single-vendor support across the enterprise.

The Sun StorEdge N8000 filers are now shipping and deliver up to 10TB with list prices starting from $53,800. ...Sun Microsystems profile
National Instruments National Instruments Celebrates Quarter Century of Innovation

TX, May 8, 2001 - National Instruments commemorates its silver anniversary in May with a celebration of the company's steady growth, unique culture, and spirit of innovation.

In its early years, NI conducted business from the homes of founders Dr. James Truchard, Jeff Kodosky, and Bill Nowlin. Today, NI has grown into a multimillion-dollar, global company for the computer-based and networked measurement and automation industry, employing more than 2,600 people with offices in more than 35 countries.

In fiscal year 2000, NI recorded its 24th consecutive year of double-digit growth with net revenue totaling $410 million. "I am very proud of our consistent growth, which directly results from our long-term commitment to helping customers across diverse industries be successful," said Truchard, who has served as NI President and CEO since the company's founding in 1976. "With each passing year, we have invested time and resources looking for new, innovative ways to build breakthrough products that help engineers and scientists improve the world around us."

Engineers and scientists use NI software and hardware to gather scientific data such as temperature, voltage, and pressure using industry-standard computer technology. Measurements such as these provide critical information for thousands of applications, from brewing Shiner beer in Texas to testing Volvo automobile safety in Sweden. The company made its first sale in 1977 to Kelly Air Force Base in San Antonio, Texas. Since those early days, NI has built a reputation for developing, marketing, and selling high quality software and hardware. The company maintains its high standards for product quality by recruiting and hiring the best and brightest people from around the world. ...National Instruments profile

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