Sun CEO Schwartz Reaches Out to Customers

Sun Microsystems Chief Executive Officer (CEO) and President Jonathan Schwartz made it clear Wednesday what kind of customers his company hopes to lure now that long-troubled Sun finally appears to be in the middle of an upswing.

“There are two customers we see [in the market],” Schwartz said, speaking at a Sun product launch event in New York. “Customers that look at information technology as a competitive weapon, and those that look at information technology as a cost center. We’re obsessed with and focused on the former.”

Calling New York the “epicenter for those kind of customers” because of the technology-savvy financial services firms and media companies that have headquarters there, Schwartz outlined some of the positives for his company since he assumed the CEO position a little more than 100 days ago.

While his first 100-day “honeymoon is over,” according to Schwartz, Sun is just beginning to see the fruits of a comeback strategy it’s been crafting since it took the dot.com bust on the chin in 2001.

Jonathan Schwartz

The company seems to be finally climbing—albeit slowly—out of its unprofitable rut, and has shown promising revenue growth over the past couple of quarters as it cut costs by shedding employees. Schwartz said the company even expects to achieve sustainable profitability by its fiscal fourth quarter, which ends June 30, 2007.

Schwartz had little new to report about the company’s overall strategy, although Sun Wednesday launched some storage and server products—and one, called “Thumper,” that is a hybrid of the two. In a message he’s been trumpeting for years, the new CEO continued to stress Sun’s commitment to offering a mix of hardware systems, software, storage and services, and helping customers combine those products in heterogeneous IT environments so Sun’s products run seamlessly alongside competitive offerings.

Schwartz pointed to the success of Sun’s open-source version of its Solaris OS as proof that Sun is happy to play well with others if it means winning customers. He said since the company open sourced Solaris last year, nearly 70 percent of its implementations have been on competing hardware from IBM, Dell and Hewlett-Packard, not Sun’s own servers.

Sun to date has distributed nearly 6 million licenses for OpenSolaris, Schwartz added.

One analyst who attended Wednesday’s event said it was not meant to be a new product-driven launch. Instead, said Jonathan Eunice, an analyst with Illuminata, the event was to show that Sun’s investment in open source and new products over the past several years, including its early adoption of Advanced Micro Devices’ Opteron chips for its Galaxy server line, is finally beginning to pay off.

Sun Wednesday sent a message that it’s on the right path now and has something compelling to offer customers who shied away from it since it hit hard times, he said.

“This is a drumbeat event,” Eunice said. “This was not about the product pipeline, but about customer connections. [This is Sun saying], ‘We continue to do the work, continue to get back with quality customers.’ “

Sun’s announcement Wednesday that it has renewed its relationship with systems integrator Accenture, which is setting up an identity management practice on Sun’s technology, is particularly important to reaching new customers or some it has lost since its downturn, Eunice said.

“It’s a very critical way for Sun to get new business and revenue,” he said of the Accenture deal.

-Elizabeth Montalbano, IDG News Service (New York Bureau)

Related Links:

• Sun, IBM Launch Tape-Encryption Tech

• Sun Releases New Servers and Workstations

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