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Press release:  Sun Microsystems rolls out new servers, software

Date : 2004-02-10

SAN FRANCISCO, Feb 10 (Reuters) - Sun Microsystems Inc. (NasdaqNM:SUNW - News) on Tuesday rolled out new, faster computer servers starting at about $2,800 and updated software as the network computer makers seeks to tap into modestly improving spending on information technology.

Included among the servers, which help to make up computer networks, is one that uses Advanced Micro Devices Inc.'s (NYSE:AMD - News) 64-bit Opteron processor. The V20z server runs both 32-bit and 64-bit software applications on Sun's Solaris version of the Unix operating system and the freely available Linux operating system. Prices for the V20z start at $2,795.

Sun also announced new servers running on the next version of its microprocessor, the UltraSparc IV. Sun has long been a presence in 64-bit computing, but has only fairly recently entered the 32-bit computing market, where Intel Corp.'s (NasdaqNM:INTC - News) processors dominate, in a bid to reignite revenue growth.

The processors are the first for Sun that use multithreading, a technology that boosts performance, and is analogous to adding more lanes to a bridge. While the cars may travel at the same speed, more cars can cross the bridge in a given period of time.

"It puts us at the head of the pack in terms of price performance," said Clark Masters, who runs Sun's enterprise systems products group.

Sun said its Opteron server, available in April, is 45 percent faster than comparable 32-bit systems.

Since the dot-com and telecommunications bubbles three years ago, Sun has been harder hit than rival International Business Machines Corp. (NYSE:IBM - News), Dell Inc. (NasdaqNM:DELL - News). and Hewlett-Packard Co. (NYSE:HPQ - News).

The telecommunications and financial services industry are key sectors for Sun, which declined more than other areas of information technology during the downturn.

Sun said that the new servers and software are aimed at cutting the cost and complexity of information technology, a refrain also used by rivals IBM and HP.

The Santa Clara, California-based company has reported a string of quarterly losses, but in its most recent quarter its loss narrowed as revenue came in at the high end of cautious Wall Street forecasts, reflecting stronger demand for computer services.

While Sun has already gone through several rounds of layoffs, analysts have pressed Sun to do more, including additional layoffs and cutting research and development spending. Chief Executive Scott McNealy has resisted such calls and emphasized the importance of investing to build systems that are competitive.

Sun spends about $2 billion a year on research and development.

"We're showing that our investment in R and D saves customers money," said Larry Singer, senior vice president, global market strategies for Sun. "If we continue marching along this path we think the strategy is going to pay off."

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