back to article Sun silent on sorry server sales

Sometimes, you call the tune, and sometimes, you have to face the music. Or you can do what the top brass at Sun Microsystems did today and simply not host a conference call to explain financial performance in its third quarter of fiscal 2009 ended in March. Sun just posted a press release and some slides - sans quotes from …


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"....Oracle is getting Sun on the cheap...." So, excluding the cash, Oracle just paid $3.8bn for a business that makes $201m loss in a quarter. Doesn't sound like much of a bargain to me!


There's no SPARC left in that server line

Run for the hills. SPARC is dead

"That means, if you do the math, that Sparc server shipments plummeted by 34 percent to around 32,000 units. Yikes."

"In the quarter, Sun's sales plunged by 20 per cent to $2.61bn, with product sales down 24.2 per cent to $1.52bn"

"Power Systems sales were up 2 percent"

Looks to me like Oracle will end of life SPARC and keep selling Linux on x86 (and Solaris too).

Look for 15,000 RIFs once the great Oracle works the books. Sun was behind a ROCK and a hard place (Fujitsu). Oracle could care less about SPARC they just want a profit ROI and that means HUGE price increases as they test the metal of customers ability to migrate.


sparc servers

Not so sure if the SPARC server drop is really all that meaningfull.

Sun EOLed many low-end SPARC servers like the SunFire V240 and did not really put anything in place. The story was that the way to replace them by Niagara based processors split up through the LDOM technology but in the end the price of those machines of course had the end result that many customers replaced their low-end SPARC's with x86 based systems...

So sure there was a drop in Sun SPARC based systems but was this only in the low-end range of thigns because there it's obvious that the sales would drop , with no low-end sparc servers being provided anymore !!!

In the end the whole SPARC line currently depends on one thing and one thing only : ROCK.

Will it arrive and if so ... when ? How fast will it be ? How much will it cost ? ... Numbers of SPARC sales really mean nothing atm , they could sell 10000 High-End Rock servers and it would still be a great result.

Dead Vulture

So long and thanks for all the fish

I've had a blast writing comments here over the years, being a Sun fanboi, and finally a harbinger. It's such a shame it has to end like this. But I guess it's appropriate that 2 Unix heavyweights - Sun and SGI - should exit stage right at about the same time.

I'm fascinated to see what Oracle does with Sparc. The new Intel 5500 Xeons look like they give Niagara a run for its money, and Fujitsu's chips aren't going to keep the pace against IBM Power 6 and 7.

By the way, the hardware deferred revenue numbers are bull. They've been growing for the past year or more and never materialize. It's deferred as in "manana" (which I can tell you from over here in Mexico usually means never).

I'm still holding a bunch of Sun "put" options which became worthless when Oracle announced its takeover. So I guess in the end Sun enjoyed the last laugh when I got a little too greedy, but maybe Larry will see these FY09Q3 numbers and reconsider his deal? $9.50 a share is generous given a 20% decline and 30,000-plus hungry mouths to feed. Maybe his experience with Unbreakable Linux taught him that forking open source doesn't deliver the green stuff?

Talking of Linux, the really big question on my mind is "what cooker does Jon Schwartz use (it's the same as Greg P's), and did Linus ever accept that dinner invitation?" Food for thought.

Hasta la proxima vida, Sol. Dulces suenos.

PS Expect Rackable to post similarly dire results in a week and watch the "SGI joy" evaporate.


So not that bad really

Considering all the FUD generated by an IBM merger.

Gates Halo


> Oracle could care less about SPARC

Could they really? I'd like to see that.

> as they test the metal of customers


English may be tough stuff but the Kings English is turning to shite.

Torn between flames and Billy the Devil -- either way I know it's bad form to comment on another poster's spelling and grammar mistakes. I probably have one or two of my own in this reply.

Anonymous Coward

Notes for Oracle's management


1) Sun laid off 2,000 in September of 2008 (Were you white? 45 or older? paid $100,000 or more per year?...then you were probably on the unemployment line).

2) Sun is laying off 6,000 more in 2009 (Not management? Welcome to the unemployment line).

So what is Oracle to do?

Here are my suggestions based on my many years of working at SUN.

1) Have every manager prepare their resume and reapply for their position. Base their retention on the last 3 projects they worked on, and how overdue each of these projects were.

2) The managers (from top to bottom) of ROCK and the UltraSPARC-T3 have demonstrated their general incompetence and need to go. Both these projects are late. What does this tell anyone with an iota of common sense? The managers are incompetent, and many were promoted into their positions merely by being the friend of some other manager. What is needed is leadership at this point, something sorely lacking.

3) The India cabal - any group comprised of 50% or more Indian managers needs to be broken up and gutted. Just go through SUN's org chart. Its a simple task and will make future rif's far easier. There were far too many promotions of Indians by Indians. (It may sound like prejudice to some, but it was an unfortunate reality).

4) Upper management (executive management) will need to be let go. This should be obvious to even the most casual observer. Besides, most are multi-millionaires at this point and will survive admirably and even be able to obtain future employment. The true brain trust of SUN at this point has already left the building anyway.

5) Finally, in closing, good luck, The general malaise and broken spirit of the SUN employees is going to be hard to repair.


Anonymou Coward: What is wrong with T3?

Anonymous Coward says, "The managers (from top to bottom) of... UltraSPARC-T3 have demonstrated their general incompetence"

The UltraSPARC T series has either been on-time or early, since it was released at SUN.

What is the problem with T3? It is expected 2nd half 2009... jumping the gun a little? Are you suggesting that the T3 will not be released until 2010?

Dead Vulture

Timothy Prickett Morgan gets recent history wrong - Sun jilted IBM

Timothy Prickett Morgan writes, "And before IBM, which jilted Sun and thereby leaving Oracle there to snap it up"

This is incorrect.

Sun's board of directors unanimously declined IBM's offer.

"Sun's board of directors declined an offer IBM made on April 4"

PCWorld seems to remember that Sun jilted IBM.

Sun jilted IBM, thus the reason for IBM's sour grapes, as you wrote about here.

I am surprised you forgot!

Anonymous Coward

Actually, it was a double jilting

IBM made an offer - a very generous one at that - and they put a few conditions on it. The conditions were reasonable to all but Sun's board. When they rejected IBMs offer, IBM packed up its money bags and walked away, just as they should have done. Now Oracle is picking up Sun for a song -- Sun's real estate holdings alone will pay for the acquisition. Larry E was smart in not taking on Sun's liabilities. At least IBM was willing to do that for them. So in the end, Scott M's ego got in the way. He certainly didn't serve his stockholders very well.


No product=no sales

@Kleyken and @AC have it right.

There isn't any thing left in the SPARC line to replace the loads of old $1000 and $2000 servers that are reaching the end of their life. We have been using the telco grade Netra 210 since we can slap Sol 9 on then and just move everything over but those machines aren't cheap and are over powered for most appliance like applications. Maybe someone who used to work at Sun could refab the IIIi at 45 and end up with a sweet low power chip for the internet appliance market.

We have been told last order date for the N210 is in about a month and they don't have anything to replace it so we have to come up with a 5 year plan based on rumors. That or we dump Sun which is starting to look like the best option.


@Actually it was a double jilting

In your post you stated: "Larry E was smart in not taking on Sun's liabilities." This statement is incorrect. Read the Definitive Agreement. Oracle is acquiring ALL of the assets AND liabilities of Sun and its various subsidiaries. This is NOT structured as an asset sale where only select product, IP, personnel and liabilities are purchased. It is structured as a 100% acquisition. Oracle is buying the whole enchilada.

So post close (and in the absence of subsequent transactions between Oracle and other parties, i.e. divestitures and asset sales by Oracle) Oracle will own all of Sun's customer obligations, channel partner obligations, vendor obligations, real estate obligations, supplier oblgations, legally binding (on a per country basis) employee obligations, etc., etc. Sun's contracts (both inbound and outbound) establish what rights of termination, revision, non-renewal, etc. Sun/Oracle might have based on change of control or "just because".

On the financial front,, Sun's stockholders and debt holders will be cashed out during the closing process so Sun's debauched shareholders will receive their pittance and debt holders such as KKR will be paid off.

If publicized reports are correct, IBM had two or three major concerns:

1) IBM was unwilling to give certain guarantees regarding the effort they would expend obtaining regulatory approvals on a worldwide basis. Sun's BoD (has there been a more useless BoD at a major technology corporation?) was justifiably concerned that numerous regulatory hurdles would be encountered that might nix the deal..

2) IBM was dissatisfied with the underlying revenue/profitability picture at Sun. Products and offerings that IBM was most interested in proved disappointing in this resplect. Hence the initial $10-$11 per share rumor turned into an $9.50 per share rumor.

3) the degree to which change of control provisions penetrated far down in the ranks of "Sun's management" (an oxymoron). Reports have circulated that such change of control provisions went as far down as director level. It wasn't JUST the unjustifiable golden parachute that would pay triple their annual compensation and 100% vest the holdingsof Schwartz and McNealy and various EVPs. No it was YEARS of severance due to managers well down in the ranks. If you do read the Definitive Agreement, you will find that Oracle appears to have negated such employee change-of-control provisions. It will be interesting to see how that pans out.

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