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Sun rolls out new storage products in data push

Posted by iTech - 2006-05-04

Sun Microsystems Inc. on Monday announced new data storage hardware and software offerings, broadening its focus on the fast-growing storage industry and aiming to build on its $4.1 billion acquisition of Storage Technology Corp.
Some of the products bring identity management to data storage -- essentially controlling who in a company has access to what -- while others aim at making data retrieval and management smarter and easier for its customers, which include financial services and telecommunications companies as well as the U.S. government.

Since entering the storage market in the dot-com boom, Sun has struggled to build and maintain market share, analysts said. But in recent quarters, the computer maker has stabilized that business and has improved the number of Sun servers that link up with Sun storage devices, rather than those from competing vendors such as EMC Corp..

"They have definitely stumbled around trying to understand their place in the world of storage," said Steve Duplessie, founder and senior analyst at market research firm Enterprise Strategy Group. "But they have acknowledged it's a business and have shored up their installation base."

The announcements come after Sun last week announced Scott McNealy, chief executive of Sun for 22 years, would pass the baton to his hand-picked successor Jonathan Schwartz, president and chief operating officer. Schwartz is now CEO and president, and McNealy remains a full-time Sun employee and chairman of the board.

Sun's sales of data storage products rose 92 percent in the most recent quarter to $561 million, topping Merrill Lynch analyst Richard Farmer's estimate of $523 million by 7.2 percent. Sun said it had double-digit revenue growth in mid- and high-end storage systems.

The announcements also mark the first time that Sun has tightly linked its Solaris version of the Unix operating system with its data hardware and software, Duplessie said.

Schwartz said that Sun will be able to leverage its stronger position in the data storage industry much in the same way it did in the 1990s, when start-ups, financial services and telco companies snapped up its servers until the dot-com and telco investment bubbles burst in 2000 and 2001.

"All next-generation storage will be running on Solaris, which means (those systems) will all run Java, and that means we can intercept the tremendous momentum around not only Solaris, but also Java to bring a much more coherent, and, frankly, simpler data-center environment to our customers," Schwartz said in a telephone interview.

"Data is very obviously at the center of the next-generation Web," he said.

Among that products that Sun announced and which it plans to highlight in a Washington, D.C., event on Tuesday is the Sun StorageTek 5320 NAS Appliance, based on the Opteron processor from Advanced Micro Devices Inc.. Sun said it can deliver performance that tops rivals by up to 50 percent.

Santa Clara, California-based Sun also said that it was expanding its "Try-and-Buy" program to include storage products. Potential customers can test the device at no charge for 60 days, with an option to purchase it at the end.

Schwartz said last week that Sun would soon expand the program to all Sun hardware products.

Sun also announced its Sun StorageTek Virtual Storage Manager, designed to boost performance and capacity to lower costs for processing tape. StorageTek is a leading maker of magnetic tapes used to archive data that does not need to accessed constantly.

Duplessie said the announcements put Sun "conceptually in a very small league of competitors," including rival International Business Machines Corp.. Sun and IBM still design and manufacture their own microprocessors, have their own operating systems and have storage businesses, unlike rivals Dell Inc. and Hewlett-Packard Co..

"If they were to execute brilliantly they could find they could pass a whole bunch of these guys," Duplessie said, referring to rivals. "But the proof really is in the pudding."

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