Server sales drive Sun's MySQL strategy
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Underpants Gnomes take charge SugarCon 2008 Sometimes it takes a faker to say it like it is. Taking time out from satirizing alpha-male Larry Ellison and dissing the sainted Ray Ozzie's timelessly clunky Lotus Notes, Fake Steve Jobs - AKA Forbes senior editor Daniel Lyons - got serious for a moment Wednesday as he opened SugarCRM's developer conference.â¦
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(InfoWorld) - A Sun Microsystems executive said the $13 billion technology company should be able to handle a possible slowdown in information technology (IT) spending better than some of its larger rivals. John Fowler, senior vice president of Sun's Systems Group, which sells servers and related products, responded Tuesday to a research report forecasting slower growth for global IT spending in 2007. Forrester ResearchÂ forecasts worldwide spending on IT goods and services to grow by only 5 percent next year, after two consecutive years of 8 percent growth. Forrester said 5 percent would be the weakest growth rate since 2003. Fowler, in an interview with technology reporters, said larger rivals such as Hewlett-Packard, which finished its fiscal year with $91.7 billion in revenue, IBM, forecast to make $90.72 billion, and Dell, $58 billion, are more vulnerable to macroeconomic conditions than the smaller Sun. "We can, in a weaker market, gain ground in market share by virtue of product and execution, which is what has been happening," Fowler said. He noted that when the worldwide server market grew by just 0.6 percent in the second quarter of this year, Sun's revenue grew by 15.5 percent, according to a report from the research firm IDC. In the third quarter, when the server market grew only 3.5 percent, Sun's revenue grew 15.8 percent. "You have to pay attention to macroeconomics but...if you were a $60 to $70 billion company, the macroeconomics affect you [more] dramatically," Fowler said. However, Sun's server shares have been in the low double digits and the company has been reporting net losses in recent quarterly reports. Forrester said sales in the U.S., in particular, will be weak as chief information officers at companies reduce spending in the coming year. "This is a caution flag for IT vendors, 2007 will be a challenging environment," said Andrew Bartels, vice president of Forrester Research, in a prepared statement.
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(InfoWorld) - Sun Microsystems, buoyed by its first profitable quarter in more than a year and a half, said Tuesday it has a goal of generating an operating margin of 10 percent by its 2009 fiscal year. Sun executives set the goal, though they cautioned that a lot of things have to happen in order to reach it, during a conference with analysts Tuesday in San Francisco. Sun CEO Jonathan Schwartz said increased adoption of Sun's freely-distributed Solaris operating system,Â its recently announced partnership with Intel, and other strategic moves, will help it grow revenue. At the same time, said Sun CFO Michael Lehman, the company will continue to reduce its cost structure using a number of levers, though not employee layoffs. "Our cost structure is still too high," Lehman said, "but we do not intend to have a big layoff and just lower the numbers." The company is going to reduce general and administrative expenses and research and development spending as a percentage of revenue so that those expenses provide a better return, he said. For example, Sun is converting its own business software infrastructure to standardize on Oracle's 11i bundle of enterprise resource planning software, including general ledger, payroll, andÂ CRM software. The conversion is expected to cost more than $200 million, Lehman said, but it will save Sun the expense of having to manage 1,000 different types of software throughout its company. "We have put a stake in the ground, and we are on a journey," Lehman said. Sun posted net income of $126 million, or $0.03 per share, on $3.566 billion in revenue, in its fiscal 2007 second quarter ended Dec. 31, 2006. It was Sun's first profitable quarter after five successive quarterly losses. Sun recorded an operating margin of 2.9 percent in the second quarter and forecasts a 4 percent operating margin in its fourth quarter. On the revenue side, Schwartz said the company's decision to give away its Solaris operating system and open source its Java software create opportunities for Sun to sell hardware and services to those users. Sun's recently announced deal with Intel to install Intel processors in its servers, while Intel markets Solaris, will also create new sales opportunities. "We are now fully outfitted to pursue 100 percent of the market. There is no opportunity that we are precluded from bidding on. There is no customer that we cannot serve," Schwartz said. Sun's turnaround strategy is finally showing up in its financials, said Nathan Brookwood, an industry analyst with Insight 64, a research firm. "You had to take it on faith a year ago." Sun previously only sold servers and workstations running its Sparc processors. Now, because it also uses Intel and AMD processors, it can appeal to broader markets, said Brookwood. "Three years ago if you wanted to buy hardware from Sun, you had to sign up for the Sparc religion. Some people believe in other religions, and they didn't want to have to do a religious conversion to buy from Sun," he said. Sun's operating margin goals seem "conservative" to Sun financial analyst Andrew Neff of Bear Stearns & Co. In a research note to investors, Neff, who also attended the conference, said "Sun has more work to do on costs, [but] we believe its outlook can further improve."
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Taking an innovative approach to the marketing of high-performance  computing, Sun Microsystems (Nasdaq: SUNW) is offering its N1 Grid program in a pay-for-use pricing model that mimics the way such commodities as electricity and wireless phone plans are sold.
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Sun's services business did well, but sales of servers and storage wares went down.
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Blog: MySQL is relentlessly pushing its way toward an IPO, as BusinessWeek reports, which makes the entire open source ecosystem that much more valuable.
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Sun Microsystems is readying an upgrade to its enterprise-level application server and is touting new downloading figures as evidence of the companyâs growing presence in the application server market.
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Sun Microsystems' purchase earlier this month of open-source database maker MySQL may have been pennywise and pound-foolish, with many observers suggesting that Valley stalwart Sybase was in fact the smarter buy. The logic is compelling -- but won't someone stand up for the cussedly independent?
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InfoWorld - In deciding to buy MySQL last month, Sun was attracted to the open-source database company's very rapid growth rate and its revenue model, Sun President/CEO Jonathan Schwartz said in a keynote presentation Wednesday at SugarCRM's SugarCon 2008 conference in San Jose, Calif.
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Fuelled by strong sales of Windows and Linux systems, the worldwide server market grew to $11.5 billion during the second quarter of 2004, according to numbers released Friday by industry research company IDC. Server shipment revenue was up 6.9 percent from last year's second quarter, and the total number of servers shipped jumped 21 percent during that same period, IDC said.
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Integrity servers have been traditionally sold as high-end products used for mission-critical business applications. But the new sub-$5,000 wares are aimed at entry-level servers from Sun in particular.
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Sun Microsystems CEO Jonathan Schwartz thinks the company's move to open-source software products like Java and Solaris will help drive sales of its new line of modular blade servers.
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By paying $1 billion to purchase MySQL, Sun seems to be giving a pretty clear signal about the centrality of the popular open-source database to the company's planned open-source software stack. But users and vendors of the many other databases Sun supports and sells insist that they're just fine, thank you, with the new sibling. Really.
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Sun Microsystems Inc., whose servers run corporate networks and websites, will give away its newest operating system to generate more sales from service contracts.
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Global sales of servers, powerful computers used by large companies, rose 7.7 percent in the second quarter to $11.55 billion (6.4 billion pounds) as demand for information technology remained strong after a three-year downturn
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InfoWorld - Sun Microsystems will pay $1 billion for Swedish software company MySQL, whose open-source database is used for some of the most widely visited Web sites in the world.
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Pays $1bn for Web's favourite free database Sun Microsystems is to pay $1bn for open source database developer MySQL.â¦