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SPARC History - 2002, July week 2

See also:- the Solid State Disks Buyers Guide
the New Solaris Migration? - migrating away from Sun's OS
How Long Can Sun Stand the Heat in the Server Benchmark Wars?
What's the Trigger Event that will Turn Around Sun's Revenue Decline?

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news about summary other SPARC news on this page
Sun Microsystems First Annual SunNetwork Conference

SANTA CLARA, CA - July 12, 2002 - Sun Microsystems, Inc. today announced its first annual SunNetwork conference, SunNetwork 2002, to be held September 18-20, 2002 at Moscone Center in San Francisco. The three-day event will provide attendees with the latest technical information and training, the chance to meet engineering luminaries, the opportunity to network and learn with other Sun customers and partners, and get an exclusive "sneak peek" at cutting edge Sun products and innovations that will transform the future of technology.

"Sun is all about our customers and partners. We build what they need - technology that makes business easier and companies more successful," said Scott McNealy, Chief Executive Officer, Sun Microsystems. "Sun Network 2002 is just one more step Sun is taking to get closer to our customers and partners, to better understand their needs and ultimately improve our business. I personally invite anyone who believes the Net is in their future to join us - besides, it's Sun, so you know it'll be fun." ...Sun Microsystems profile

Editor's comments:-
after the SunWorld event in 1993, Sun withdrew from sponsoring large "Sun" focused user events for nearly a decade. However Sun continued exhibiting at industry shows with more general themes. Sun's re-entry into "Sun" events marketing is a major turnaround for the company. What's next? You never know. They may resurrect the idea of "Sun User Groups."
First Annual SunNetwork Conference

Sun Microsystems Talks About its SPARC Thing

Michael Craige Corp and Tech Data to Launch Web Storefront

Who's Going to Buy Sun Microsystems? (The Company)

10 Years After Sun's "Pizza Box" Servers - IBM Does "Pizza Box" NAS

Can Software Stop Sun's Slide?

News Blackout from Sun?

HP Announces Portfolio of Itanium 2-based Systems

Sun's Q4 Results Could be Cloudy

earlier news - archive
tape storage
Tape drives on
STORAGEsearch.com
Megabyte found that the advantage of taped storage was that he could store a huge amount. But it sometimes took a long time to retrieve what he wanted.

Nibble Re: Sun's Annus Horribilis

T
his last year has not been a happy one for the "dot in dot-com" company.

Partly it's suffered from problems affecting the whole computer industry, but maybe it's time for the company to confess up to shareholders, users and other partners, that some of its biggest problems have been self inflicted. Hubris had become as much a core part of the company as Solaris.

As the strength of Sun has dimmed during the last year, the glare of looking directly at it has become less painful. I don't realistically expect any press releases coming out from Sun Microsystems admitting they have done things wrong in their business strategy (that may have to wait for Scott McNealy's memoirs) but we have already started to see a trickle of news to suggest that they are going back to do some things differently. In the absence of any "mea culpas" coming out from Mountain View here's my own suggested shortlist of sins of omission and sins of commisssion by the SUNW company.

Sins of Omission

  • Sun forgot that its customers are rational human beings, who seek out the best value solutions for their organizations. When Sun produces the best solutions, they buy Sun. But that shouldn't be taken for granted when Sun's products are no longer best of breed.
  • In the mid 1990's Sun's SPARC Technology Business promised OEMs looking at SPARC technology, that Sun's SPARC processors would maintain a consistent performance advantage over Intel architecture by a margin of about two to one. You'd have to pay more for the SPARC technology, but you'd get higher performance computing typically a year to eighteen months sooner by switching to SPARC. However in 2001 and upto the 2nd quarter of 2002, Sun forgot to deliver on this pledge. First Sun's competitors caught up, and now the performance ratio is heading towards two to one the wrong way round. But Sun still expects users to pay a higher price for lower performance. There's something wrong with that thinking.

Sins of Commisssion

  • Sun had many "adventures" into other market segments where the Sun magic had not been worked before. Sun's biggest and most expensive misadventure was in the fast growing storage market. Industry commentators said at the time that Sun was a most unlikely candidate to succeed in this commodity priced market. Storage doesn't just connect to Sun servers, it connects to PC's and Wintel servers, and a lot more besides. My guess is that Sun squandered billions of dollars in this experiment. It failed because users don't want over priced second rate storage at a higher price than best of breed alternatives. However Sun is already going back to its earlier successful strategy of badge engineering good solutions made by other companies.
  • Sun had developed a latent market of pro Sun wannabe customers in the Intel architecture market with its Solaris X86 operating system. At some future time this had the potential to be leveraged with Intel badged servers from Sun. However, when Sun unilaterally and without discussion pulled the plug on these users, it sowed the seeds for future distrust. Any future Intel architecture products from Sun, be they Solaris or Linux will be viewed with deep suspicion. Sun's business development in this market has been set back many years

I said this would be a short list. That's why I haven't mentioned that Sun lost trust in its VAR channel by competing with its own customers when times got tough. And that Sun thought that most of its other partnerships with IHVs and ISVs were one way streets designed solely to benefit Sun. But that's no different to what other computer companies have always done. Sun was unusual in ever behaving differently. Sun was unlucky with its cache reliability problem, and was even more unlucky that its fastest growing customer base got whacked by the pricking of the dot-com bubble. Nothing they could really about that.

Looking ahead...

the need for high performance reliable servers hasn't gone away. Sun just isn't meetimg that need as well as it used to. Many of the hurdles which Sun faces are internally created problems. Admitting that's the case, and doing something about it could result in a new dawning for the twenty year old company.

Tech-Source
Privately owned,Tech Source, Inc. is a leading manufacturer of high-resolution graphics accelerators for OEMs of PCI and SBus computer systems.

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SPARC Chips Sun Microsystems Talks About its SPARC Thing

Editor - July 12, 2002 - for the first time in over 5 years the word "SPARC" has appeared in big letters on Sun's home page this week. There's even a picture.

Sun, which has been shy on this subject for a long time, usually presenting the word "SPARC" in letters no bigger than 4 pixels high on the web, or using 6pt type in print, is now running an article which explains to users that Sun does actually use SPARC, and why these SPARC processors are different. I did suggest they do something like this about a year ago in my article (October 2001) How Sun Got Burned... What should Sun do now? and I'm glad to see that they're taking some notice.

Because of the Sun article's timing (just after Intel's Itanium hoo-ha) you might think this article might mention the words "Intel", or "Itanium". But the only competitive knock-offs appear to be links to comparisons with IBM's chips.

The article does make one very good point though.

SPARC users have had continuous applications software compatibility from the earliest 32 products back in 1987, through the switch to 64 bits in 1994 and all the way through clock speeds, multi-processing etc. The point is that the new Intel chip (which doesn't get mentioned - even though it's the most significant thing which has happened to affect Sun's market this year) ...the new Intel chip will be running mainly new and unproven 64 bit software with little or no backwards compatibility and a very small applications set. ...Sun Microsystems profile
Michael Craige Michael Craige Corp and Tech Data to Launch Web Storefront

ATLANTA - July 11, 2002 - Michael Craige Corporation in conjunction with Tech Data Corporation today launched a new and enhanced e- commerce Web Storefront solution for customers. The Web Store powered by CNET Channel's ChannelOnline gives Michael Craige customers access to more than 100,000 U.S. technology products. ...Michael Craige profile
Sun Microsystems
. In the past there have been some very interesting books written about the changing fortunes of once mighty computer companies.

"Big Blues" by Paul Carroll plotted the history of IBM upto 1993 which led to the hiring of Lou Gerstner. As we now know, Gerstner reshaped IBM into a formidable company once again.

"Infinite Loop" by Michael S. Malone tracked Apple Computer from startup days and being the #1 PC maker with the Apple II, through the wasted Sculley stewardship and back to the return of Steve Jobs.

More recently "World War 3.0" by Ken Auletta is a comprehensive account of the Microsoft anti-trust trial which includes many startling revelations even to those who followed this on the newswires. Microsoft seems to have escaped any consequences from their misdeeds so far, however.

If any current or former Sun employee or journalist is writing a book about Sun's changed fortunes they should contact the editor when it's done to let our readers know about it.
Who's Going to Buy Sun Microsystems? (The Company)

Editor - July 11, 2002 - many times in the 10 years I've been editing the SPARC Product Directory I've heard rumors about Sun being involved in merger and acquisitions talks with other comapanies. Mostly it was Sun acquiring other companies who had great technology. When people asked me about other companies acquiring Sun, I always laughed. With a share price that was heading ever upwards and great growth prospects, how could anyone afford to buy Sun? No one had that kind of money.

Later this month Sun could become a possible takeover tarket... by anyone. SUNW is currently at $5. This is a stock market in which any company which becomes visible on the radar gets hammered, no matter what the news. Intel, last week lost 5% of its share price on the day it launched its Itanium 2, and for Intel, let's remember that was a positive news day. So whatever Sun's results, we could see the share price drop to maybe $3 or even lower.

If you take away Sun's revenues from storage and services they're probably now less than a $9B company, with a revenue trend which will take them further South for another quarter or so due to lower average selling prices and fierce competition. Selling more servers isn't a short term fix when those systems are going out the door priced 40% lower than the year before. Sun's critical mass is too low for it to survive as an independent architecture company. But it's got some great core technology (SPARC and Solaris) and people assets which in the hands of better management do have the potential to reach a much larger market.

Anyone looking at asset stripping Sun will be delighted to see that they don't have huge manufacturing assets. All their semiconductors and much of their systems manufacturing is subcontracted. But Sun does have a lot of baggage acquired in their aspiration to be a BIGger company, which is non-core. If a Lou Gerstner stepped in today he could cut away a lot of fat and get them to be a very profitable SPARC server and technology licensing company in about two quarters.

So back to my original question. Who's going to buy Sun?

IBM and Fujitsu are possible candidates. The nice thing is that Sun doesn't have an overlapping PC product line to absorb. Or maybe Sun's middle management could organise a buyout with a coalition of other companies (like members of SPARC International) who have a long term interest in seeing SPARC technology survive and thrive. Whatever happens in the next few months, after the shake out, there will still be a strong server business selling Solaris servers with good profits and great growth prospects. But it may no longer be called Sun Microsystems.
IBM 10 Years After Sun's "Pizza Box" Servers - IBM Does a "Pizza Box" NAS

SOMERS, NY - Jul 10, 2002 - the new IBM TotalStorage NAS 100 announced today is a thin appliance often referred to as a "pizza box" because of its shape. It is designed and packaged for customers with little or no on-site IT support, such as medium-sized businesses or branch locations in large enterprises, for example banks or retail outlets. It allows customers to easily implement cost-saving solutions, such as email archiving or server consolidation.

Starting at just $4,420 and capable of being deployed in 30 minutes or less, the NAS 100 is priced for medium-sized customers and offers "enterprise-class" reliability and manageability that is the hallmark of IBM. For example, the NAS 100 is equipped with hot-swappable hard disk drives to support non-disruptive replacement of the drives, resulting in less down time for customers. Other self-healing, self-managing features include automatic temperature monitoring of processors and fans, as well as automatic fail over capabilities for the operating system and local area network connections. ...IBM profile

See also:- Network Attached Storage (NAS) manufacturers
Sun Microsystems Can Software Stop Sun's Slide?

July 9, 2002 - an article on BusinessWeek online comments on the fact that Sun's stock has plummeted to less than $5, a 92% drop from its $64 peak in 2000. The article goes on to guess a figure for Sun's Q4 revenue and suggests that Sun may have to become dependent on software sales to thrive in the future.

Editor's comments:- recently Sun has been giving software away by bundling packages to shift server sales. So it's unclear how Sun can benefit any more than it already does from a software route that's based on the SPARC platform. And even if Sun did turn its attention to the Intel server market, its ill executed dumping of Solaris 86 was a red flag to wannabe Sun-on-Intel users. Converting those people back could take some time no matter how superior any future Sun software product related to Intel hardware really is.
Sun Microsystems News Blackout from Sun?

Editor - July 9, 2002 - no press releases from Sun Microsystems for nearly two weeks... must be something of a record. Not even the reflex reaction of a rebuttal to Intel's press releases yesterday which were aimed squarely at Sun's system performance. Now that wouldn't have taken more than a few minutes to write and distribute.

Or is there another reason that Sun's PR people are in purda?

As mentioned yesterday, there are some grounds for believing that Sun may soon have to report some really bad financial results, and finding a positive spin could take time. One VAR I spoke to today suggested that Sun sales people may have been dividing the price by the number you first thought of to get orders booked at the end of June instead of July.

No doubt as soon as this gets onto our site, it will be followed a few minutes later by a flood of releases from Sun. For once I don't mind being wrong, and hope that the flow of Sunspeak continues soon.
HP HP Announces Portfolio of Itanium 2-based Systems, Solutions and Services

PALO ALTO, Calif. - July 8, 2002 - HP today announced the worldwide roll out of an extensive portfolio of Intel® Itanium® 2-based systems, integrated solutions and comprehensive services. With this launch, HP delivers the industry's broadest offering of Intel Itanium 2-based servers and workstations featuring breakthrough price and performance for HP-UX, Microsoft® Windows® and Linux environments. ...Among the many products announced today...

HP Server rx5670, a four-way entry-level server, supporting up to 4 processors, 900 MHz and 1 GHz, offering the world's only in-box upgrades to the Intel Itanium architecture from an existing RISC server, starting at an estimated U.S. street price of $23,400. ...HP profile
Sun Microsystems Sun's Q4 Results Could be Cloudy

Editor - July 8, 2002 - we speculate that Sun Microsystems financial results for fiscal year 2002, which ended June 30, 2001 could be cloudy with revenue dropping off towards the end of the quarter. Typically Sun reports on its Q4 about 19th of July. I wouldn't be surprised to see a warning before that time.

One sensitive indicator of buyer interest in the market is the number of readers accessing the SPARC Product Directory web site. Reader interest has been a good indicator of forward looking trends in the Sun compatible systems market for 10 years. Although April and May figures were above those for the same period in 2001, analysis of our log files shows a larger than (seasonally) expected drop off in June, down to the levels of September 2001.

Many factors may account for this short term decline, including loss of confidence in the financial markets in recent weeks, which have experienced 4 year lows in share value. Another factor may be that users have been waiting to see how today's long expected announcement by Intel Corporation of its 64 bit Itanium® 2 processor in production volume will affect systems pricing. Intel claims that its new processor will deliver 50% higher performance than Sun's 1.05GHz SPARC processor. Whether that turns out to be correct, given the brief time that OS vendors have had to tune their products for the new platforms remains to be seen.

However, it would be reasonable to expect price cuts from Sun (HP and IBM) following this announcement, and that, taken with the air of pessimism in the wider economic markets could account for a short term pause in big iron buying behaviour which may show up as a factor in Sun's forthcoming results.

The readership of our companion site STORAGEsearch.com hasn't seen the same dip. But that could be because people need to buy new storage products when they run out of capacity, and a new processor from Intel doesn't really figure as a significant market factor when you're buying another RAID system or tape library for your existing servers.

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