The Eclipse of Sun (Microsystems)

Re. Economically-Appropriate InfoSystems Infrastructure Development,
excerpts below from a 911-word report entitled
"Intel, Linux darken power of Sun", in The Seattle Times, by Matthew Fordahl
Associated Press, Monday, June 16, 2003 - Page updated at 12:00 A.M.,
http://seattletimes.nwsource.com/html/businesstechnology/135003734_btsunmicro16.html
::

<excerpts>

SAN JOSE, Calif. — It was the leading supplier of the computer servers that
fueled the dot-com boom, the Silicon Valley star whose name was nearly
synonymous with New Economy chic.

But after two years on the bleeding edge of the bust, Sun Microsystems has
fallen victim to the commoditization of the computers that do corporate
America's heavy lifting.

Sun is deep in identity crisis as its executives try to reinvent the
company. There's been loose talk of Sun as a possible takeover target, and
some analysts are wondering whether it will ever return to the days of
strong revenue growth and record profits.
[...]
Sun's servers are being squeezed by the increasing power of so-called
commodity chips from Intel and low-cost operating systems like Linux that
only a few years ago could not approach the performance of the company's
Sparc microprocessors and Unix-based Solaris operating system.
[...]
At Sun's headquarters, at the site of an abandoned insane asylum [?!? ;)]
in Santa Clara, Calif., morale is showing signs of a rebound from the low
point of about six months ago — when layoffs by the thousands and the
departures of key executives left remaining employees wondering whether Sun
was moving in the wrong direction.
[...]
Sun still has to convince outsiders that it can both survive and thrive. It
will take time for Sun's strategies — and an above-average research and
development budget at 15 percent of revenue — to pay off.

Java also could pay off if Sun's $1 billion private antitrust lawsuit
against Microsoft is won or settled favorably, though some consider the
case a distraction.

Sun needs "a little less rhetoric about the guys in Redmond and a little
more thinking about who the real competitors are," said Charles Rutstein, a
Forrester analyst.
<end>

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