Sun steps up services as products stagnate

Sun steps up services as products stagnate

As part of a continuing effort to cast off its mantle as strictly a big server vendor, Sun is expected to expand its services offerings with the Sun Connection portal. This will provide end-user access to a menu of managed services including a new patch update service for Solaris.

Sun also plans to unveil new management and provisioning software within its N1 family of products, rollout new storage software suites and update its Sun Grid and Sun Storage Grid offerings.

The announcements mark another step in its efforts to reinvent itself as more of a services firm, a shift that CEO, Scott McNealy, hopes will boost the beleaguered company.

Sun has made a living selling big, expensive Unix boxes during the dotcom boom, a time when its stock priced soar above $US100. Currently, it hovers around $US3.50.

Sun broke even in its third quarter but logged sales of $US2.63 billion - a 1 per cent drop from the $US2.65 billion in sales it reported during the same quarter last year. A poorly performing products group, which makes servers and other computers, didn't help as revenue from that unit fell to $US1.68 billion from $US1.71 billion during the same quarter last year.

Industry observers say the trouble has been that Sun was slow to embrace the changing IT landscape that came with a shrinking economy. Customers tightened their purse strings and looked for lower-cost, flexible systems that were less complex than the big boxes Sun was selling.

In the past couple of years, Sun has made changes, embracing the low-end with a wide-ranging partnership with AMD and giving more attention to Linux, for example.

It has also put a renewed focus on services, which McNealy considers a more predictable revenue stream than hardware. Last year, Sun introduced subscription-based Preventive Services for identifying and mitigating problems, and Remote Services for management and monitoring.

With Sun Connection, it is trying to make it easier for customers to get the services they need by creating a clearinghouse. One of the first offerings under the Sun Connection umbrella will be Sun Update Connection, which will let customers download Solaris updates and patches as they need them or have them automatically applied based on their particular business policies.

Sun would continue to add offerings to the Sun Connection portal, spanning basic patch update services to grid computing, senior vice-president of customer networked services at Sun, Jay Littlepage, said. The company was integrating technology and expertise it got when it acquired SevenSpace earlier this year to expand its services offerings to heterogeneous environments that included operating systems other than Solaris.

The idea was to give customers options when it came to bringing in the IT resources they needed to perform business functions, Littlepage said. HP and IBM are also heightening their focus on managed services that can be consumed remotely on demand.

Sun executives insist they are not trying to compete with IBM Global Services, which reported more than $US11 billion in revenue in the first quarter.

Sun, in contrast, boosted its services revenue in its fiscal third quarter from $US940 million to $US944 million.

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