A New Solaris Dawns for Sun Micro

Buoyed by cheerful sentiment on the launch, Sun shares were recently up 15 cents, or 3.1%, to $5.01, despite a 0.2% decline in the Nasdaq Composite.

The release of the new, free version of Solaris threatens to alter dynamics in the server software market, notably among Linux vendors. Sun has lately been promoting its software as an alternative to Red Hat or Novell's SUSE, offering Linux users 50% pricing discounts on the most recent version of Solaris.

In a recent note, CIBC's Ali Irani said Sun's plans to release details of the software code in a Linux-like move could harm Red Hat, the largest pure-play Linux outfit.

Among the technological features stitched into Solaris is a "container" capability, which allows users to split the software into thousands of independent computing environments. Such containers help isolate errors and allow business customers to prioritize certain applications, according to Sun.

For example, a server could be configured so that a Web server receives 75% of network bandwith during times of peak use, the company said.

Another feature, DTrace, helps track down bottlenecks, helping boost software performance.

The Solaris 10 launch comes as Sun has finally been showing some long-awaited progress on the financial front, having lagged well behind its peers during the technology recovery of the past couple of years. In October, Sun posted the second quarter in a row of year-on-year revenue growth, reversing a long string of declines.

The company posted a $174 million loss on writedowns for layoffs and a litigation settlement; however, excluding those charges Sun would have delivered a narrow $13 million profit for the quarter ending in September.

Analysts currently expect Sun to deliver 6 cents in pro forma earnings per share for the fiscal year ending in June 2005.