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[rr] Sun to Roll Out New Low-End Linux Servers

>From NY Times:

Sun to Roll Out New Low-End Linux Servers

SAN FRANCISCO (Reuters) - Network computer maker Sun Microsystems Inc. 
(news/quote) (SUNW.O) said this week it planned to offer a new line of 
lower-cost computer servers based on the upstart Linux operating system 
rather than its own software.

The announcement Thursday was a surprise and a defensive move by the company. 
Sun has always argued its Solaris system's key asset was its ability to run 
on any sized machine.

But Sun said Linux was an important alternative operating system to the 
Windows system from its archrival Microsoft (news/quote) Corp.Freely 
available Linux is spreading among corporate users aiming to cut costs, 
although analysts say it cannot yet handle some of the biggest tasks and ones 
that need extreme security. It is usually confined to mundane tasks such as 
Web site management or payroll systems.

Sun dipped its toes into Linux about a year ago with a line of ``appliance'' 
servers, which are computers intended for single tasks, like handling a small 
business's e-mail. The company said in a statement Thursday it would extend 
that line and introduce software tools and support to help programs run 
interchangeably on Solaris and Linux.

``The announcement today strikes me as a big departure from your united 
architecture message,'' Toni Sacconaghi, an analyst at Sanford Bernstein, 
said to Sun executives in a conference call. He was referring to Sun's 
strategy of offering a single software design for a wide range of technical 

Sun Chief Operating Officer Ed Zander repeatedly batted the perception that 
Solaris would suffer.

``We want to make sure that the open systems community, the open source 
community, stands united against Microsoft and IBM (news/quote),'' he said, 
drawing a parallel between Sun's commitment to building programs on common 
standards and Linux's heritage of allowing developers access to source code.

IBM (IBM.N) led established technology companies pushing Linux, arguing 
operating systems running individual machines were becoming commodities. IBM 
saw a profit providing services and ``middleware'' software to glue a network 

Microsoft, meanwhile, is challenging Solaris and other expensive operating 
systems for the middle ground of less expensive servers.

For Sun, the clear immediate threat is that Linux products will cannibalize 
its own Solaris servers, but the larger question is whether Sun could prosper 
if it refused to acknowledge Linux.

Sun executives said the operating system was simply not an issue in some 
areas, and that Linux would dominate there. ``This is an evolving systems 
company,'' said Stephen DeWitt, the Sun executive who heads the current Linux 

Sun said it would give details of the new server line, which will run on 
so-called ``x86'' microchips popularized by Intel Corp (news/quote) (INTC.O) 
by mid-year.

Goldman Sachs (news/quote) analyst Laura Conigliaro said on the call that the 
early announcement could be viewed as defensive.

But Steve Josselyn, an analyst at technology research firm International Data 
Corp., said the truth of the Sun's Linux push would be in the details.

``It can be read in both ways,'' he said.

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