Sun sheds light on its plan to woo financial firms

Sun Microsystems Inc. is returning to its roots with an effort to impress Wall Street firms. According to one Sun Canada spokesperson, the endeavour could have an effect on Bay Street as well.

The Santa Clara, Calif.-based technology company earlier this year created a Capital Markets Group. Its mandate: sell the financial services sector on Sun equipment.

According to Stuart Wells, senior vice-president of worldwide financial services at Sun, the company aims to regain the strong position it once held among financial institutions. “We had great traction on Wall Street,” Wells said, explaining that Sun gained a lucrative foothold in the financial services industry with well-priced, high-performing servers. But “from 2000 to about six months ago, at the low end we lost a lot of our footprint….We had to swing back around and address the problem.”

Though Wall Street was critical to Sun’s ascension as the top Unix vendor in the late-1990s, it has cooled to Sun’s technology in recent years as financial companies have turned to the Linux operating system on inexpensive servers based on the Intel Corp. x86 architecture. “That’s probably where they’ve taken the biggest black eye with regard to people moving to Linux,” said Dion Cornett, an analyst at Decatur Jones Equity Partners LLC in Chicago.

Sun’s strategy to stem the loss is to promote both hardware and software among banks, investment houses, brokerage firms and other Wall Street entities. Wells pointed out that his company brought out the Sun Fire V40z Opteron-based server — a four-way computer using AMD’s 64-bit chip compatible with x86 software architecture that will play a part in Sun’s attempt to woo financial institutions, Wells said.

On the software side, Wells said Sun plans to spread the word that Solaris is a cost-effective alternative to Linux. “It turns out that our licensing costs for Solaris are significantly lower than Linux.” He explained that Solaris 10 comes with DTrace, technology that lets administrators tune the OS. Wells said DTrace paves the way for improved server performance.

Throughout 2004 Sun has made a concerted effort to support Solaris x86, its OS for servers running on Intel processors, on non-Sun hardware. Earlier this year Sun announced that it would support Solaris x86 on 220 systems, including models from Sun rivals Dell Inc. and IBM Corp.

Catherine Whitelaw, sales director of financial services at Sun Canada in Markham, Ont., said, “Right now we are, in concert with the whole Wall Street initiative, making sure we bring the Sun innovation forward, making sure we increase our strength, increase our growth, in the capital marketplace on Bay Street.”

J.P. Savage, senior vice-president in charge of systems operations and tech services at Scotiabank in Toronto, said his company relies heavily on Sun equipment. He said Sun’s “quite entrenched” position as a technology provider for financial firms indicates that the computer maker knows the capital markets industry well.

Savage said if Sun has a problem, it’s competition from low-priced server offerings. “They have to address that market challenge.”

Savage also said Sun would be smart to develop a financial-specific message. He pointed out that companies like Scotiabank face heavy security and regulatory obligations. Technology designed to address challenges specific to the financial industry would receive a positive response from its intended market audience.

Cornett said Sun has its work cut out for it as it tries to turn the tide on Wall Street. Financial users surveyed by Decatur Jones still have their doubts about the strength of Solaris’ enterprise capabilities on Intel and Opteron systems.

— With files from Robert McMillan, IDG News Service

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