 ServersNetwork World's Servers Newsletter, 08/07/07Sun back in blackBy Jennifer MearsLast month, I talked about Sun’s efforts to reinvent itself and turn things around. It seems like the company is indeed regaining its momentum. Sun reported its earnings last week and things were pretty rosy. The company posted another quarterly profit, reporting net income of $329 million, or 9 cents per share, in its fourth quarter, compared to a loss of $301 million, or 9 cents a share, during the same quarter a year ago. Revenue for the quarter was $3.835 billion, about the same as the year ago quarter when Sun reported revenue of around $8.3 billion. For its fiscal year, Sun reported net income of $473 million, or 13 cents per share, on revenue of $13.873 billion, a nice turnaround from 2006 when Sun reported a loss of $864 million, or 25 cents a share, on revenue of $13.068 billion.
Read the IDG News Service story on Sun’s earnings here. While Sun’s numbers are encouraging, industry experts – and Sun executives themselves – agree that Sun is in the middle of a transition. President and CEO Jonathan Schwartz has been working hard to right the company’s course since he took the helm from Scott McNealy a little over a year ago. Since that time, Sun has jumped feet first into the industry standard server market with AMD- and Intel-based systems and also has placed a strong focus on moving all of its software into the open source world. In a blog entry talking about the upbeat financial news, Schwartz says, “We did this while driving significant product transitions, going after new markets and product areas, and best of all, while aggressively moving the whole company to open source software (leading me to hope we can officially put to rest the question, ‘how will you make money?’).” “And we're not done - not by any stretch of the imagination,” Schwartz continues. “We have more streamlining to do, more commitments to meet, more customers to serve and developers to attract. But it's evident we've got the right foundation for growing Sun.” Read Schwartz’s blog here. Charles King, principal analyst at Pund-IT Research, notes that Schwartz is leading Sun through a transition “away from its historic hardware-focused roots toward a destination that is not yet entirely in focus. “The best way for a company to survive such a transition is to choose carefully, move deliberately, improve efficiencies, and preserve critical assets, and Schwartz is pursuing this course,” King writes in a research note on Sun’s earnings report. “How willingly the company’s customers will follow remains uncertain, but given Sun’s Lazarus-like ability to survive past bad years, the company may yet emerge fully into the light.” Editor's Note: We regret to let you know that we will no longer be publishing the Servers newsletter. The last newsletter will be mailed on Aug. 9. To keep you abreast of servers news, starting the week of Aug. 13, you will begin receiving the Data Center Alert newsletter, which mails every Tuesday. We thank you for supporting Network World newsletters.
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| Contact the author: Jennifer Mears is a freelance journalist based in Arizona. She was previously senior editor at Network World focusing on server issues. E-mail her at jlmears@gmail.com.
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