Sun Trying Something New ... Like Giving Away An Operating System
Sun Microsystems is trying a new marketing strategy, giving away its new Solaris 10 operating system for free.
"Hewlett Packard sells a printer at a low price and makes a lot of money on printer cartridges. Gillette gives you the razor and makes a lot of money on the blades," states Scott McNealy . "There are different ways to drive market penetration."
Solaris 10 will be unveiled Monday in a live webcast of an event in San Jose, though it won't be formally released until the end of January. It will work on more than 270 computer platforms running on chips from Sun, Intel, and AMD.
"When we open source, the one advantage we thought Red Hat had is gone. Then we both have an advantage with respect to Microsoft," McNealy said. "(Sun has) a worldwide service and support organization, which we think is way better than either company in the enterprise."
"It's kind of the tent pole - it just kind of holds up the whole deal," McNealy commented. "There's always a lag with companies our size, And that's assuming we're not making dumb mistakes right now that I don't know about."
"They're turning the corner," says equity analyst Jonathan Hoopes with Wm Smith. "The horizon is so much clearer, and the valuation [of Sun's stock] doesn't reflect that.".
"I think we turned the corner ... two years ago," McNealy says, which is when he overhauled his management team. "There was incredible turmoil, then all of a sudden the waters got very calm,'' he says. ''Now, we're just gaining speed."
"There's always a lag with companies our size," McNealy said. "And that's assuming we're not making dumb mistakes right now that I don't know about."
"I think [Sun management] believes, correctly, that what has enamored people with Sun in the past is the power of its OS, not the gear. People really wanted to stay with Solaris but were tired of the expensive gear," said Frank Gillett, principal analyst at Forrester Research. "The bottom line is, Sun's recovery and return to respect hinges on the success of its OS and particular on Solaris 10."
"So all this handwringing about 'Sun is dead' is a bunch of hooey," said Gillett, "though I don't want to diminish that they've had a huge perception problem and customer defections."
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