Update: Sun not about to set, says McNealy

BERLIN, Germany -- In a speech designed to convince European customers that Sun Microsystems Inc. is still shining, company Chief Executive Officer Scott McNealy plugged Sun's new products and strategy to attendees of SunNetwork Berlin Wednesday.

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Speaking to a sold out crowd of more than 6,300, McNealy focused on Sun's push in the low-end server market, its new Linux-based desktop software and its continued commitment to multibillion dollar research and development.

"I keep reading whether Sun is relevant or not ... and apparently we are!" McNealy declared.

The show is the company's first major conference in Europe and the platform for its fourth-quarter product launch, in which it rolled out a host of new server and software products.

McNealy was in Berlin to help the Santa Clara, California, company make a convincing case to local customers to stick with Sun, in light of the company's slipping revenue, prompted by a collapse of the telecom sector and an unexpected takeoff in the low-end server market when Sun was still concentrating on the high-end server market. The Europe, Middle East and Africa region currently accounts for around one-third of the company's revenues, according to McNealy.

"We are doing very well. Clearly the value in the market is in the low-end," McNealy said, adding that Sun is "growing faster than anyone on the planet" in this market.

At the Comdex trade show in Las Vegas last month, the company announced plans to roll out a series of servers based on Advanced Micro Devices Inc.'s (AMD) 64-bit Opteron chips. On Wednesday, the company launched its first AMD-powered server, the Sun Fire B100x Server fitted with an AMD Athlon XP1800 chip. The product is aimed at strengthening the company's position as a low-end provider and SunNetwork Berlin attendees appeared to welcome the new product.

Marc Rogers, senior integration engineer at Vodafone UK Content Services Ltd., said that he was interested in the new AMD server, and was considering deploying it for grid computing.

Rogers said, however, that he still hadn't decided if he would scale out by building a grid, or scale up by investing in a costly high-performance system.

Whichever choice Rogers makes, Sun is hoping to cash in -- either with its high-end Sparc processor-powered systems or with its low-end offerings.

Revenue potential for its new Java Desktop System, which has been aggressively priced at $100 per user, per year, may not be as high but represents a new competitive offering for Sun.

"It's just us and Microsoft (Corp.)," McNealy said, playing up recent customer wins for Java Desktop System.

The software has been adopted in China, in a deal with China Standard Software Co. Ltd., and McNealy also announced that Electronic Data Systems Corp. (EDS) has signed a global support agreement for the software.

"This is like 8.5 on the Richter scale," McNealy said.

The support win reverberated with Rob ter Veer, support technology leader for Amsterdam-based IT services company Getronics. He said that his company would also consider offering support for Java Desktop System, given the EDS backing. What's more, ter Veer said that he was thinking about pitching support for the software to the Dutch government, which is currently contemplating the endorsement of widespread Linux adoption.

This would be good news for Sun, especially since McNealy noted that the company is moving its software model "at a crazy pace."

But individual software and hardware products don't represent Sun's overreaching strategy, according to McNealy, who stays faithful to the company's mission as a networked-computing company.

Sun executives served up a world ripe with network technologies at the conference, made possible by the company's Java programming language.

Java currently has three million developers worldwide, McNealy said, and Java technology is "everywhere."

McNealy sees this widespread deployment as a win over Microsoft, especially in the Web services realm.

"There's only two choices out there: (Microsoft's) .Net and Java Web Services, and I'm here to tell you Java

Web Services has won," he said.

Salting the wound, he referred to the wave of viruses targeting Microsoft and added, "When the last time you saw a Java virus?"

While Sun plays the field, attendees seemed content just to hear that the company would be in the game for the long-term.

"I didn't learn anything new (from McNealy's speech) but it was good to hear their strategy," said Carlos Loureiro, chief technology officer of Portuguese ERP (enterprise resource planning) provider Audaxys SA.

If confidence is a strategy, McNealy is well prepared. "Sun is back," he said, adding for the third time in an hour, "Did I mention we are cheaper than Dell (Inc.)?"

SunNetwork Berlin runs through Thursday.