Will The Sun Shine?

Sun is still shining. The company has managed to sustain double-digit growth

in India, but its worldwide revenue has been sinking. Sun is relying heavily on

new areas for growth and hopes that its integration with Microsoft Technologies

will give a boost to both its topline and bottomline. But the billion-dollar

question still remains: Can Sun sustain the 30% plus y-o-y growth in the near

future?

In the non-x-86 server market, the company grew by 21% last year, and is in

the second position after HP, according to DQ Top20. While Sun will continue to

post strong growth on the Unix front, the company is worried about losing

business to the Lintel, the Linux-Intel combine. Sun plans to take on this

threat with the recently released Solaris 10. The OS will not only work on Sun

servers but also on rival boxes and chips. This is bound to hurt Sun's server

sales, but it will be a small price for the company if it wants to keep the

Lintel threat at bay. Sun is clearly gunning for Red Hat. Comments Anil Valluri,

country director, client services, Sun Microsystems India, "We are not

against open source but buying it for $1,000 is not wise as Solaris is available

at half of the cost."

“We are not against open source but buying it for $1,000 from a vendor is not wise as Solaris is available at half of the cost”  Anil Valluri, country director client services India, Sun Microsystems

Sun is also looking at replicating Red Hat's subscription-based services.

However the challenge for Sun will be to convince its sales partners that there's

a profit in selling subscription-based services as opposed to hardware and

software. Of course, the other challenge will be to convince customers to make

the leap from owning a data center to using pay-per-use services. So far there

have not been much success on the pay-and-use model in India.

Moving beyond servers, Sun is looking at storage as another key component of

its India strategy. It plans to take its storage products to the mass market by

introducing new products upcountry every quarter. It will nevertheless have to

face stiff competition from the likes of IBM, HP, EMC and the new Symantec-Veritas

combine.

Another component of its India strategy is software. With StarOffice, Sun

hopes to make an entry in the enterprise desktop space. The company currently

has 30,000 Star-Office licensees in India. For Sun, eroding Microsoft's market

on the enterprise desktop will not be easy. The iron grip Windows has on

desktops is unlikely to be loosened by Linux applications anytime soon. Another

strategy that could work is the integration of Sun's technologies with

Microsoft. An alliance with Microsoft is likely to give Sun a new ray of hope in

near future as Sun and Microsoft would not be directly competing with one

another. Forging a tie-up could result in both companies complementing one

another.

Sun has managed to grow at a good pace so far. However, sustaining this

growth might become its biggest challenge in the years to come.

Rahul Gupta/CyberMedia News