Sun speeds up entry-level server

Sun Microsystems Inc. executives took on a more optimistic tone Thursday with regard to hardware sales in the company’s second fiscal quarter and announced new developments in its server and storage lines, during a conference call with press and analysts.

Sun for the last few quarters has been punished by a slowdown in technology spending but said that early sales figures from its second quarter ending Dec. 30 show the company may be making a slight recovery.

“The good news is that, through week nine of this quarter, order rates are tracking to our internal expectations,” said Mike Lehman, vice-president of corporate resources and chief financial officer at Sun, during the conference call. The rate of orders is up slightly from the previous quarter and Sun expects somewhat higher revenue, he added. “We are encouraged by this, as it has been a few quarters since we have been able to state that,” Lehman said.

However, Lehman warned that the company does a large amount of business in the later stages of most quarters and said the current state of the economy continues to make predictions difficult.

Sun has completed about 75 per cent of the layoffs it announced in early October and plans to have about 40,000 employees by the end of the quarter, down from 43,000. As a result of the job cuts and facility reductions, Sun expects to take a US$500 million charge, Lehman said.

To help spur sales, Sun has been working to push its 900MHz UltraSparc III processors across its entire hardware line and announced that the Sun Fire 280R entry-level server will now have the speedier chips. Sun’s newest high-end and midrange servers already have the 900MHz chips.

The Sun Fire 280R is shipping immediately with two 900MHz chips, at a starting price of US$22,995 with 2GB of memory and two 36GB internal disks. A similar product with 750MHz UltraSparc IIIs starts at US$17,995, according to information on Sun’s Web site.

Sun also said it plans to introduce some new storage technology in January that will come out of tools it acquired through its purchase of HighGround Systems Inc. in April. Sun has previously said the new offerings would involve virtual storage management and next-generation file system technology.