Sun Comeback

By Reuters -  |  Posted 2008-01-28 Print this article Print

Sun Microsystems Inc, the world's No.4 maker of computer servers, expects revenue across most of Asia to grow more than 15 percent in 2008's fiscal second half as business demand stays resilient despite fears of a potential economic slowdown.


California-based Sun, which vies with IBM, Dell and Hewlett-Packard Co to sell servers to businesses but had sustained steady losses before last fiscal year, has been trying to make a comeback.

It slashed more than 4,000 jobs last year, began selling server computers with processors from Advanced Micro Devices Inc and Intel Corp in addition to its own chips, and growing a software business.

Sun Micro's revenue from India grew 25 percent in the fiscal second quarter while greater China and Korea grew 15 percent apiece, Lim said.

Lim, who is also president of greater China, expected turnover from the area, which encompasses mainland China, Hong Kong and Taiwan, to continue to outpace 11-12 percent market growth in 2008.

Sun ranked No.1 in unit shipments in Unix server market in Asia Pacific excluding Japan in the first three quarters of 2007, according to research firm IDC.

Lim shrugged off competition with HP in the region, but regarded IBM a strong rival.

Sun will continue to grow faster than the market for greater China. Thus, we are gaining market share," he said. 

"We don't see HP as much anymore," he said. "IBM is a strong competitor, however, we differentiate it with open-source. IBM is strong in services and do a lot of outsourcing ... we just compete in that battleground."

Open source software is intended to be copied and modified freely by users, leaving developers to make money from selling features and technical support, unlike paid-for proprietary software such as Microsoft's Windows operating system.

Sun said this month it would buy Swedish database-software maker MySQL AB for about $1 billion.

Sun Micro has tried hard to market its small but fast-growing software business, which includes the Solaris operating system and Java programming language. If Sun succeeds with MySQL, whose database software is used by the likes of YouTube and Facebook, it could mean increased bundled sales of support for MySQL but also more hardware sales.

"It is really a big deal for Asia because the amount of MySQL user-downloads in this region is very high," Lim said, adding that MySQL has 50,000 downloads a day, worldwide.

(By Judy Hua; Editing by Edwin Chan)

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