What's Sun's Storage Plan?

FRAMINGHAM (03/10/2000) - Sun Microsystems Inc. is rattling its storage saber more loudly this year, but analysts say they aren't sure where the saber is pointing.

Sun last month announced a new storage initiative to take on Hopkinton, Mass.-based storage leader EMC Corp., extending its Jiro storage management platform across all of its storage product lines and preparing to launch a high-end storage device by midyear.

Analysts said much of Sun's storage focus is on its own server customers rather than on companies beyond its customer base.

"Sun has a dual personality when it comes to storage. . . . They've had difficulty spelling things out," said John Webster, an analyst at Nashua, N.H.-based Illuminata Corp. Sun views storage as a feature with limited value, yet it knows storage is a significant space to go after, Webster said.

"To be truly open, [Sun] needs to support lots of different environments," but 90 percent of its storage support is Solaris-based, he said.

Part of Sun's challenge is to be willing to look beyond its server business, said Carl Howe, an analyst at Forrester Research Inc.

According to the Cambridge, Mass.-based research firm, storage now accounts for 50 percent of a server's cost and will jump to 75 percent by 2004. "Servers are becoming peripherals to storage arrays," and server vendors aren't happy with this shift, Howe said.

Richard Ptak, an analyst at Hurwitz Group Inc. in Framingham, Mass., said Sun's storage play is halfhearted. Sun has bandied storage about, but it lacks a serious research and development effort, he said.

But Sun insists it's aggressively pursuing the storage opportunity. "Sun is not one bit ambivalent [about] storage," said Denise Shiffman, Sun's vice president of marketing, network storage. "We're putting a huge investment into the right products and solutions to give our customers what they're looking for."

In Need of a Niche

The key to Sun's success may be in finding its niche among storage vendors.

"Storage is a costly component of IT budgets, and a lot of profit is going there," said Mike Kahn, president of Clipper Group Inc. in Wellesley, Mass.

Sun also needs to develop more storage expertise. It's hiring more experienced sales employees to go head-to-head with EMC, Webster said. Sun's reseller relationship with Louisville, Colo.-based Storage Technology Corp. helps because it provides storage experience, he said.

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