November 17, 2003
Sun Microsystems said it will use Advanced Micro Devices's high-end
processors to build and sell powerful business computers, continuing a shift in strategy
designed to breathe new life into its business.
Sun, which has been struggling as it copes with shrinking market share, layoffs and 10 consecutive quarters of revenue declines -- is shifting away from mainly offering expensive high-end servers running its chips and its Solaris version of the Unix (news - web sites) operating system and embracing lower-priced hardware systems with cheaper software alternatives.
In a move widely expected by analysts, Sun Chief Executive Scott McNealy told an audience at Comdex (news - web sites), the technology industry's longtime main trade show, that its computers using AMD's 64-bit Opteron processors will be available with its own Solaris software as well as the Linux (news - web sites) open source operating system. Linux can be copied and modified freely, unlike proprietary software such as Solaris and Microsoft Corp.'s (Nasdaq:MSFT - news) Windows.
"Here's a processor architecture that takes advantage of what Solaris has to offer," McNealy said. The architecture marks a departure from Sun's long-time strategy of using its own software exclusively with its own chips.
AMD, which has been marketing 64-bit microprocessors that can crunch more complex calculations faster than current-generation 32-bit processors, has been signing up hardware partners to try to beat bitter rival Intel Corp. (Nasdaq:INTC - news) in the nascent market for affordable, high-end computing. For years, AMD has struggled to gain ground against Intel despite lower prices and, according to some experts, equally powerful chips.
During its heyday, Sun had logged rapid growth by selling high-priced computers, featuring its own SPARC processors and Solaris software, to businesses building computer networks. McNealy continued to tout Sun's significant market share in powering much of the Internet, where he said that 80 percent of Web-connected servers use Sun products.
But Sun has been giving up server market share to Windows and Linux-based computers running on Intel and AMD processors. Analysts had been expecting AMD, which won an endorsement by International Business Machines Corp. (NYSE:IBM - news) for the Opteron chip earlier this year, to work with Sun.
Sun said it would introduce Opteron-based computer systems throughout 2004 and also work to optimize its software for 64-bit computing. Hector Ruiz, Chief Executive of AMD, said that his company's strategy of trying to push past Intel with 64-bit computing was validated by the alliance with Sun.
Source: Yahoo News
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