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Sun: We've turned over a new leaf

Stephen Shankland and Marguerite Reardon CNET News.com

Published: 22 Sep 2004 08:20 BST

Sun Microsystems' executives have rarely been known for meekness, but the company's new chief operating officer took a tone of humility while arguing that the company has mended its ways.

After the dot-com bubble burst, chief operating officer Jonathan Schwartz said, Sun wasn't able to supply what customers wanted -- servers using Intel processors and products that work with Microsoft software and IBM mainframes.

"You came a-knockin', and we didn't have much to deliver," Schwartz told attendees at its quarterly product launch event here Tuesday. "We didn't listen. What's a great way to get our attention? Direct your purchase orders to someone else."

Now that's changed, Schwartz said. The company was punished by three straight years of revenue decline, but in its most recent quarter, it returned to growth.

At the event, Sun announced a host of products and plans to try to seize the initiative from competitors, including IBM, Dell and Red Hat, that have gained customers at the expense of the Santa Clara, California-based server and software company. Among the new items: a plan to sell computing power for $1 per processor per hour; round-the-clock technical support for the Linux open-source operating; the new StorEdge 6920 midrange storage system; and a promotion that gives customers credits of between $560 and $1,250 for trading in servers with Intel Xeon processors for Sun servers with Advanced Micro Devices' Opteron chips.

Schwartz wasn't the only one with a mea culpa. In an online chat on Tuesday, chief executive Scott McNealy accepted responsibility for not promoting Solaris on x86 servers, saying it took efforts from Schwartz and Chief Technology Officer Greg Papadopoulos to undo the damage. "I take the blame for not driving it sooner, and I give Jonathan and Greg credit for making Solaris on x86 a committed part of our strategy," McNealy said.

Customers at the event were listening to the sales pitch, but Sun will have to prove the value of its products. "What we really want to see from Sun is innovation. But price has increasingly become more important to us, too," said one vice president-level computing executive at a large Wall Street financial firm, who wished to remain unnamed. "We can't afford to implement bleeding-edge technology anymore. We've got to go back to basics and buy things based on performance and cost."

Spirited comeback
Sun is displaying some of its old competitive spirit, said Clay Ryder, an analyst at The Sageza Group. "Sun has done best when facing adversity," he said. With too much success, as in the late 1990s, "They get fat, dumb and complacent."