Sun Micro Posts $1.7 Billion Loss (Update)

Schwartz said the company experienced strength in certain of its product lines, despite the challenging economic situation. He pointed to sales of Sun servers that feature the company's Niagara chip, which increased 83% year over year.

Sales of so-called Blade servers, which use proprietary Sun chips as well as industry standard microprocessors from Intel(INTC) and Advanced Micro Devices(AMD), were up 23%.

And he said Sun's continued embrace of open source software, such as the Solaris operating system and the recently-acquired MySQL technology, are opening doors to new sets of customers.

According to Schwartz, about 11 million companies use MySQL technology, very few of which currently use Sun hardware.

Of course, Sun has been trying to grow its revenue through a similar strategy for a couple of years, with little to show for it. And as economic conditions continue to deteriorate, the company will need to reassess its spending.

"We understand that we need to balance our costs in light of the new economic reality," Schwartz repeated several times during Thursday's call, promising to provide investors with an update when the company has something to announce.

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