In a push to regain some of its lost luster,
willtake the wraps off Solaris 10, an updated version ofits operating system, at an event in San Jose, Calif., onMonday.
The launch of Solaris 10 is significant not justfor Sun but industrywide: Solaris is the mostcommonly deployed commercial version of Unix forservers, more popular than proprietary software from
The debut is also a linchpin in the Santa Clara,Calif.-based server and storage marker's efforts torestyle itself from a hardware company to computersystems outfit.
In line with that shift, Sun will provide Solaris10 for free and make it available on hardware fromcompeting vendors, powered by processors from
, in addition to chipsfrom Sun.
As part of its effort to boost Solaris, executivessaid in September that the company will begin
rewarding its salesforce for software-only sales --even when Solaris is packaged with hardware from acompeting vendor.
For example, if one of Sun'ssalespeople sells Solaris to a customer with Dellsystems, he will now be rewarded as if he had sold theunderlying Dell hardware, President and Chief Operating Officer Jonathan Schwartz said at the time.
Sun management believes, correctly,that what has enamored people with Sun in the past isthe power of its OS, not the gear. People reallywanted to stay with Solaris but were tired of theexpensive gear," said Frank Gillett, principal analystat Forrester Research. "The bottom line is, Sun'srecovery and return to respect hinges on the successof its OS and particular on Solaris 10."
Gillett said there are sound strategic reasons tooffer the software at no cost. By encouragingcustomers to stick with Solaris, Sun can maintain tiesand hopefully sell them on server or storage hardwarelater on. Moreover, many business customers are morethan willing to pay for support for software fromLinux vendors, he pointed out. Sun hopes to make moneyfrom fees for such support, too.
Research from Forrester suggests that Solaris hasremained popular among large business customers, evenas tech watchers have sounded more skeptical in recentyears about the prospects of Sun's hardware business.In a survey of 129 large North American companies, theresults of which were released in June, Forresterfound that 43 used Solaris, and of that group 83%planned to buy at least 10 more copies over the nextthree years.
"So all this handwringing about 'Sun is dead' is abunch of hooey," said Gillett, "though I don't want todiminish that they've had a huge perception problemand customer defections."
Buoyed by cheerful sentiment on the launch, Sunshares were recently up 15 cents, or 3.1%, to $5.01,despite a 0.2% decline in the
The release of the new, free version of Solaristhreatens to alter dynamics in the server softwaremarket, notably among Linux vendors. Sun has latelybeen promoting its software as an alternative to
SUSE, offering Linuxusers 50% pricing discounts on the most recent versionof Solaris.
In a recent note, CIBC's Ali Irani said Sun'splans to release details of the software code in aLinux-like move could harm Red Hat, the largestpure-play Linux outfit.
Among the technological features stitched intoSolaris is a "container" capability, which allows usersto split the software into thousands of independentcomputing environments. Such containers help isolateerrors and allow business customers to prioritizecertain applications, according to Sun.
For example, a server could be configured so thata Web server receives 75% of network bandwith duringtimes of peak use, the company said.
Another feature, DTrace, helps track downbottlenecks, helping boost software performance.
The Solaris 10 launch comes as Sun has finallybeen showing some long-awaited progress on thefinancial front, having lagged well behind its peersduring the technology recovery of the past couple ofyears. In October, Sun posted the
second quarter in a row ofyear-on-year revenue growth, reversing a longstring of declines.
The company posted a $174 million loss onwritedowns for layoffs and a litigation settlement;however, excluding those charges Sun would havedelivered a narrow $13 million profit for the quarterending in September.
Analysts currently expect Sun to deliver 6 centsin pro forma earnings per share for the fiscal year ending inJune 2005.