Sun Microsystems Hopes to Shake Up Storage Industry : SUN ORACLE 2005 2008 2009

http://bits.blogs.nytimes.com/2008/09/05/sun-microsystems-hopes-to-shake-up-storage-industry/

September 5, 2008, 3:55 pm
Sun Microsystems Hopes to Shake Up Storage Industry
By ASHLEE VANCE

Sun Microsystems has spent years trying to recover from a major shift in the server landscape. Its systems, once so prized during the Internet buildout, were spurned as cheaper servers packed with open source software caught customers’ attention. The result was a dramatic change in the basic economics of the server market and plummeting revenue for Sun.

With these difficult lessons behind it, Sun thinks it now has a chance to disrupt a different part of the hardware sector and make life tough on rivals. In November, Sun plans to release new storage hardware and software that takes aim at a part of the storage market dominated by NetApp and EMC. Playing off the same trends that shook its server business — less expensive hardware and software — Sun is looking to undercut the competition and sink their margins.

Thanks to a broad set of advances, storage systems no longer need as many specialized components, according to Mike Shapiro, a Sun distinguished engineer. The mainstream processors produced by Intel and Advanced Micro Devices have improved to the point where they can churn through storage-specific operations rather than handing the work off to extra hardware components. In addition, the difference between how long an expensive disk lasts versus a cheap disk has dwindled, making cheaper disks attractive. And Ethernet networking technology continues to gain on pricier, faster technology used for top-of-the-line storage systems.

Add all of these factors together, and a hardware vendor can build a relatively inexpensive storage system that will satisfy a broad set of customers.

“If you have 90 percent of the features most people want and you win big on price/performance, then you can be very disruptive,” Mr. Shapiro said.

In the early part of this decade, Sun learned all too well just how disruptive these factors can be. Customers moved away from products built on Sun’s own custom microprocessors and software to cheaper servers that relied on Intel processors and the open source Linux operating system. While larger customers still wanted Sun’s high-end hardware for some tasks, the Intel-and-Linux combination could satisfy the majority of most customers’ needs.

Software plays a large role in any discussion of this type, and again Sun thinks it has something that can rattle NetApp and EMC.

In November, Sun is set to show off new storage gear that has been part of a project code-named FISHworks (FISH stands for Fully Integrated Software and Hardware). A small group of Sun’s top software engineers have spent months creating the layer of programming code that will fuel these new systems. According to Mr. Shapiro, that software will provide storage customers with a slick graphical interface that leads to a broad set of functions designed to make it easy to set up storage systems, run operations and perform diagnostics.

The software, which Sun has crowed about for more than a year, is months late and is still largely remains a secret, so it’s difficult to say how much Sun has accomplished. But with regard to price, Sun again looks to undercut the competition by including the software as part of these new systems rather than charging a lofty premium for it, as often happens in the storage industry.

Sun has tried and failed to revitalize its storage business on many occasions over the years. So skeptics will dismiss this latest effort as more talk until Sun actually shows some ability to back up its bold claims.

“I think the trends Sun is talking about are happening, but I am just not sure Sun will be able to build a viable business out of this,” said Dan Olds, lead analyst at the Gabriel Consulting Group. “They see themselves as the savvy game-changer bringing open source religion to storage, and that may be true, but I don’t think Sun will be the company that will end up making the most money here.”

It’s more likely that a company such as I.B.M. or Hewlett-Packard will capitalize on some of these trends due to the historical strength of their storage businesses, according to Mr. Olds.

As for NetApp, the main target for Sun, the company sees customers continuing to pay a premium for software that delivers more sophisticated functions than what Sun is discussing. “The larger companies out there will not go with the Sun type of solution,” said Patrick Rogers, a vice president at NetApp.

NetApp has spent years tuning its software for storage tasks and runs largely on the type of low-cost hardware Sun is championing. “There is nothing that we can see that is really new with what Sun is doing,” Mr. Rogers said.

http://news.techwhack.com/1343-storage 3 Jun 2005
Sun Microsystems to acquire Storage Technology Corporation

Networking giant Sun Microsystems has decided to take over the Storage Technology Corp for a reported price of USD 4.1 Billion in cash. The deal is expected to enhance Sun’s capabilities in the rapidly growing market for data storage.

The deal would mean that Sun would be paying USD 37 per share for the company, which is based at Louisville, Colorado. This price is around 19% over the market rate of the shares of the company at the end of day in the market yesterday.

This deal is one of the biggest in recent times as Sun Microsystems tries to get back on its foot in the market after seeing a big downtime in the recent times. The deal is also expected to get Sun back into the frontrunners in the computer server market.

Companies like IBM and Dell are rapidly growing in this particular segment of the market and are challenging the Sun Microsystems big-time. Sun’s CEO Scott McNealy had this to say about this latest deal: “We have the cash; we have a strong financial position. We have committed to turning the huge cash position at Sun into profitable growth.”

Scott believes that the timing is right for such a major market move. He added: “It was becoming a more and more important component of solving these complex network computing problems”. The company just recently posted a $9 million quarterly loss in April, down from a $760 million loss a year earlier.

http://online.wsj.com/article/SB124022726514434703.html
Oracle Snatches Sun, Foiling IBM
April 21 2009
By DON CLARK and BEN WORTHEN

Oracle Corp. struck a surprise deal to buy Sun Microsystems Inc. for $7.38 billion, elbowing aside International Business Machines Corp. in the latest sign that a few well-heeled giants are exploiting the recession to snap up weaker players.

Oracle, which has spent more than $30 billion buying software rivals in recent years, swung into action Thursday after talks between IBM and Sun had stalled, people familiar with the matter said.

IBM still held out hope over the weekend that Sun would accept a bid from the big computer maker, these people said, but Sun's board voted in favor of Oracle's offer, which was viewed as less likely to face an antitrust challenge since there was little business overlap.

IBM is highly unlikely to re-enter the bidding for Sun, said people familiar with the matter.

After factoring in Sun's cash and debt, the companies valued Oracle's offer at about $5.6 billion. Sun shareholders will get $9.50 a share in cash. Sun's stock surged 37% on the news Monday to $9.15.

Tech Titans at War

Sun, whose server computers have long been sold along with Oracle's database software, was widely believed to need a bigger partner to compete with giants such as IBM, Hewlett-Packard Co. and Dell Inc. Sun has suffered from erratic profitability and revenue problems since a boom phase ended with the collapse of the dot-com bubble.

Oracle has emerged as one of the most powerful players on the tech landscape, buying rivals to assemble a long list of programs used by companies.

The deal gives Oracle control over important Sun software -- notably the popular programming technology called Java, which is used to build software for Web sites and cellphones. Oracle Chief Executive Larry Ellison described Java as "the single most important software asset we have ever acquired."

Some analysts said they were stunned by Mr. Ellison's move, predicting that Oracle may eventually choose to divest Sun's hardware business. But Safra Catz, one of two Oracle presidents, said Oracle intends to make Sun's hardware operations a profitable business unit.

Write to Don Clark at don.clark@wsj.com and Ben Worthen at ben.worthen@wsj.com