Sun Banks on Solaris for Next Rise

Yet Sun faces a challenge in resurrecting its diminished reputation, given the inroads made by industry standard hardware over the past few years. One IT manager at a Wall Street hedge fund said he wasn't even aware of the latest broad-based Sun push. "If there's a buzz, it's gone past me. It's the first I've heard about Sun in quite some time," said the IT buyer, adding that he is "perfectly well-served" with his Intel-based Dell servers.

And Wall Street analysts seeking more details on the company's ongoing reinvention were likely to leave today's tech confab disappointed. They have long complained that Sun does a poor job of explaining how its sundry reinvention plans will get it back into the black.

In a follow-up question-and-answer session to the call, a defensive-sounding Schwartz divulged few details about how Sun's business model would benefit from its strategic shift.

Sun will have its work cut out as it aims to spike Solaris sales enough to offset the margin hit from low-priced hardware. Currently upwards of 80% of Sun's Intel-based servers are shipped running Linux, by one analyst estimate.

Pressed by an analyst to comment on whether Sun should drop hardware altogether and remake itself as a software-only outfit, Schwartz said it has forged an identity as a systems company and will continue to be a hardware supplier.

In an offensive push that risks confusing some customers, Schwartz said the company will talk up unfavorable comparisons between the level of security and service offered by Red Hat Linux and its own Solaris operating system. Sun offers servers based on both Red Hat and SuSE Linux.

Sun also boasted of the performance advantage offered by the latest version of its operating system, Solaris 10, which will ship later this year. Besides improved security, it offers a mainframe-like partitioning feature that Sun said yields a dramatic increase in utilization.

In recent trading, the stock was up 11 cents, or 2.7%, to $4.05.

Today's comments from Schwartz, which were punctuated with the usual off-handed swipes at competitors such as Hewlett-Packard(HPQ) and IBM(IBM), provoked an equally predictable round of recriminations.

H-P issued a release Tuesday claiming to have won over 40 financial services deals from Sun in the past 18 months. IBM(IBM) pointed to a study from Walker Information, which found that customers are becoming less loyal to Sun.

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