SAN FRANCISCO -- John McFarlane started off his tale of the rising

Sun

(SUNW) - Get Report

by taking off his jacket. It was a little too hot for suit coats in the

Ritz-Carlton

meeting room here, and

Intel

(INTC) - Get Report

had just thrown some water on the red-hot investment rocks by preannouncing lower revenue figures to come in the third quarter.

Banc of America Securities

computer analyst Kurt King gave the executive vice president of Sun's

Network Service Provider

business a thankful introduction. "It sure is nice to not just be covering PC companies on an afternoon like this," he said at his firm's investment conference.

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But McFarlane could've just as easily be sweltering from the tungsten glare of media spotlights after his company's

announcement this week that it would pay $2 billion in stock to acquire

Cobalt

(CBLT)

. McFarlane shrugged that the media had thoroughly picked over the acquisition, leaving little for him to reveal about Sun's entry into the low-end server-appliance market.

And so he delved into his favorite subject: Sun's rising business in the service-provider market. For those of you who thought Sun was purely a supplier to the

Exoduses

(EXDS)

and

Digexes

(DIGX)

of the world, McFarlane reminded the audience that telephone companies are moving their class 4 and class 5 switching software and functionality onto relatively cheaper Sun boxes. McFarlane boasted that Sun has nabbed 70% of that market, displaying the burning passion all tech companies seem to feel for the communications business.

After few revelations, McFarlane gave the jittery audience a joking reminder, "We're still the dot in 'dot-com'," he smiled. "But we're also the old in 'old economy,' if the dot-coms don't make it."