Servers, Not Java, drive Sun’s revenue growth, says McNae

Java may be the future, but Sun Microsystems' revenue growth is still being driven by its big servers and systems integration services. So says Murray McNae, managing director of Sun's local sales agent SolNet, which announced last week a combined revenue of $39 million for the year to June 30. McNae claims Sun's server business is growing at the expense of its Unix competitors and "the forecast is for our Unix growth to continue. We're still selling into new customers in New Zealand.'

Java may be the future, but Sun Micro-systems’ revenue growth is still being driven by its big servers and systems integration services.

So says Murray McNae, managing director of Sun’s local sales agent SolNet, which announced last week a combined revenue of $39 million for the year to June 30, representing, he says, a compounded rate of 27% year-on-year for the past four years. Sun’s corporate fourth-quarter revenue to June 30 was a record $US2.534 billion (up 26% on the same quarter last year) and net income was up 94% at $237m.

McNae says Sun’s worldwide sales “went through the roof” for the new 64-way E10000 “super server” originally designed by Cray Research. SolNet has sold one E10000 — to Livestock Improvement — but its strongest growth was in systems integration.

Although there are no local market-share figures available, McNae claims Sun’s server business is growing at the expense of its Unix competitors and “the forecast is for our Unix growth to continue. We’re still selling into new customers in New Zealand.

“We’re picking up marketshare from HP and IBM. Of the other competitors, Digital’s Alpha chip is a good floating-point processor but not so great in a server box and SGI has been hit by a growing Intel/NT push at the lower end.”

McNae cites sales to New Zealand Health Information Services (replacing HP hardware) and Wellington City Council (a DEC replacement) as evidence of the trend. He describes the installation of a a near-video-on-demand system for Saturn Communications as “world leading”. The VOD system uses standard Sun boxes equipped with special software to manage video streams. It has also provided SolNet with an opprtunity to do Java development. MacNae says Solnet “is not primarily a software development shop” but its Java Solutions division now employs three permanent staff and several contractors.

“The wave of Java computing has yet to bite, but when it does Sun will be very well positioned,” says McNae. “There’s got to be a better way — and it’s got to be built around thin-client network computing.”

SolNet’s Roger De Sallis says Victoria and Massey Universities have Java development courses and he expects another wave of developers to come from the ranks of long-time enterprise Cobol programmers “many of whom are really struggling with C++ because they have to write so many lines of code to get anything.”

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