Linked by Thom Holwerda on Wed 23rd Aug 2006 17:49 UTC
Sun Microsystems, which has been undergoing a drastic realignment of its server business over the past couple of years, in the second quarter regained its position as the world's third-largest systems maker, overtaking rival Dell. The company saw its market share increase to 12.9 percent in the second quarter, according to numbers released by analyst firm IDC.
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interesting view
by gobbler on Thu 24th Aug 2006 19:47
in reply to "RE: Could they finally be turning the corner?"
Member since:2006-01-10
Thats an interesting view you're describing.
I never understood why SUN wrote (and still writes) red numbers. The technology decisions they make are amazing; offering Opteron Systems, providing support for PostgreSQL, going opensource with Sol10 etc.
I hope they manage to establish low-cost (up to 5k US$) servers. After DECs death, it would be hard to see another company with huge computer knowledge die.
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Member since:
2005-07-08
If Sun just turned the corner, they now face yet another long straightaway. The hardware market is cyclic, with staggered release cycles across the industry that create a sort of back-and-forth market landscape.
Sun might look good right now, but Dell is beginning to release capable, low-cost 4-way Opteron servers, and IBM's BladeCenter line is beginning to appeal to a midrange market that wants to consolidate their infrastructure.
The problem for Sun is that they're trying to do what they do best: bring some high-end sugar to the entry-to-midrange levels of the server market.
This strategy in and of itself isn't the problem. There's a huge market for the kinds of products that Sun is producing. However, it's hard to attack the middle of the market without huge volume sales in the low-end (Dell/HP) or huge revenue machines in the high-end (IBM). Sun has to dump a lot of R&D into bringing its midrange enterprise technology to commodity hardware, and they don't have deep pockets.
The tragic flaw for Sun is that they always see where the market is going, but they're never in the right position to get there. The latest and greatest in technology always happens in the midrange, simply because the volume markets won't pay for it and the high-end markets wait until it's proven. However, free market economics says you have to embrace either the mass market and/or the niche markets to have what it takes to play in the midrange.
Sun has never done that, and so Sun will always drive modest revenue from significant investments. As much as Dell and IBM have traditionally been inept at the the midrange server market, they're in better position to succeed than Sun, and they will grow in this area. The more Sun tries to stay ahead, the more money they will continue to lose.