Sun Sees Server Revenue Jump in Q2

Sun Sees Server Revenue Jump in Q2

Sun Microsystems, which has been undergoing a drastic realignment of its server business over the past couple of years, in the second quarter regained its position as the world's third-largest systems maker, overtaking rival Dell.

The Santa Clara, Calif., company saw its market share increase to about 13 percent in the second quarter, according to numbers released by analyst firms IDC and Gartner.

In the second quarter of 2005, Sun's market share stood at between 11 and 12 percent.

In addition, Sun was the only one of the four top server makers to see growth in its revenues. The company's server revenues grew 13.7 to 15.5 percent year to year, according to the firms. IBM, Hewlett-Packard and Dell saw revenue declines of between 1.3 and 3.8 percent.

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Could this be the turn of a new leaf for Sun? They're down, but certainly not out.
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Sun until two years ago had long shunned the x86 space in favor of its own RISC-based SPARC line. In a turnabout, Sun adopted Advanced Micro Devices' Opteron processor as the basis for a new line of x86 systems and has aggressively grown out its product line. The bulk of the company's server business is still the UltraSPARC line, but Eastwood said he expects that the Opteron systems will continue to grow in significance.

In July, Sun added to its line of Opteron-based Galaxy systems, introducing a blade server and a system than can scale to 16 processors.

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There is a multitude of reasons Sun was hesitant to get into the x86 market. Firstly, there is already fierce competition. Who wants to enter a low-margin market last? Dell, HP, and others have been selling servers based on x86 for ages. Secondly, they're just now building a system scalable to 16 processors. Maybe people don't know this, but SPARC is short-hand for Scalable Processor ARChitecture. Sun already has the capability to build servers with 1,024+ SPARC processors per system image.
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