Sun to Re-Emphasize Its Core Business
Sun Microsystems Inc., whose stock has been soaring lately on the strength of some fancy new Internet software, this week will move to re-establish leadership in its core business with a revamped line of computer workstations.
The new machines, featuring a redesigned central processor, are aimed at scientists, engineers and a growing cadre of other customers--including financial analysts and special effects producers--who require a desktop computer more powerful than the standard personal computer.
Industry analysts said Sun’s new line will compete well with the machines of its main rivals, Hewlett-Packard Co., Digital Equipment Corp., IBM Corp., and Silicon Graphics Inc. In particular, the new Sun machines have powerful three-dimensional graphics capabilities, which should help them compete in entertainment industry markets that have thus far been dominated by Silicon Graphics.
“Toy Store,” a feature-length animation film that will be released by Disney later this month, was created on Sun workstations using animation software from Pixar Inc.
“These machines put Sun back into the race,” said Paul McGutchin, an analyst with the Gartner Group, a Stamford, Conn., market research firm. “It should stem the outflow of customers that had become impatient and abandoned Sun for the competition.” The new Sun systems will be priced at $17,000 to $60,000.
Sun was among the first companies to make computer workstations, which brought many of the characteristics of a supercomputer to a scientist’s or engineer’s desktop. In the mid-’80s, Sun purchased microprocessors, the computer’s engine, from semiconductor manufacturer Motorola Inc.
By the late ‘80s, Sun determined that it needed a faster engine and opted to design its own, called Sparc, and it quickly caught on. But during the last two years, the Mountain View, Calif., company’s machines have begun to lag in speed when compared to competitors using a similar style of microprocessor.
“I don’t think we beat anybody to the punch” with Sun’s previous generation of computer workstation, conceded Scott McNealy, Sun’s co-founder and chief executive.
In addition to the next-generation Sparc chip, the new systems include dramatically improved video-handling capabilities. “With this line, Sun has done what it does best: repackage newer technology and sell it for a reasonable price,” McGutchin said.
While it has struggled somewhat in the computer workstation market, Sun has done well selling “servers” for computer networks, where the ability to store large amounts of data is more critical than the ability to crunch numbers quickly.
And the Internet has suddenly emerged as a major new business opportunity for Sun: More than half of the servers on the Internet’s World Wide Web are made by Sun.
And Sun has developed a line of software products for the Internet, including Java, a programming language for creating interactive content for the World Wide Web, and Hot Java, a browser for accessing the Web. Many expect Java to become a standard for Internet programming.
