In a press briefing for the Southeast Asian media delegation prior to the opening of its $35-million iForce Solutions Center in this city-state, the Silicon Valley icon said the worst is definitely over and profits have turned up for the company after years of alarming decline.
Lionel Lim, vice president and managing director for Asia South of Sun Microsystems, said there is now a differrent opinion on the company’s health after three years of battering from financial analysts.
"The question now is no longer about Sun’s viability but how pervasive Sun’s technologies will be in powering the ‘Net," he enthused, incorporating the company’s Web thrust.
Throughout the dry spell, Lim said Sun never waivered on the technology path it was treading despite the widespread skepticism. "We knew what we were doing, and the market is now realizing the innovation we have undertaken. If you’re a technology company, it is a must that you innovate."
The payoff is shown by the volume of servers the company was able to sell, which increased by 160 percent on unit shipments year-on-year. "This would erase any speculation of inprofitability," Lim said.
Software, the executive said, was a major reason for Sun’s recovery. Flagship operating system Solaris 10, released recently, posted a 60-percent increase in cumulative downloads in the first quarter, while downloads for applications server also registered a 20-percent climb in the same priod. The multiplatform Java Enterprise System, on the other hand, had a 21-percent growth clip.
"Java is now everywhere, (this is) a forergone conclusion. The numbers are boring because it gets bigger and bigger," he said.
The computer giant also showed figures from research firm IDC which indicated its dominant position in terms of units shipment of non-x86 Unix servers last year in all South Asia markets.
Singapore had the highest unit shipments in the region with 71.5 percent, with the Philippines posting the lowest with 46 percent. Aside from the two countries, the Asia South market is composed of Thailand, Malaysia, Indonesia, and India.
But Lim explained that even during its most difficult years, Sun was not really in danger of being cash-strapped as it had the highest net cash as a percentage of revenue compared with HP and IBM.
A financial table furnished by Sun showed HP had a 7-percent net cash as a percentage of revenue, IBM had 11 percent, and Sun had 56 percent.
"This means that if the economy goes bad for the next three years, we are still viable. What about HP and IBM?" asked Lim, himself a former HP executive.
Taking a dig further at his previous employer, Lim said HP’s strategy of using other people’s technology is no longer working. "We at Sun sell technology and brains unlike HP. If they listen to analysts to spin off their printer division, this company (HP) will die even faster."
He said it will be diffucult for HP to come out of the rut because of its faulty business model, as well for IBM whose e-services profits are getting slimmer by the day. "[These companies] will soon be gone because it will be very hard for them to change their business model."
As for Sun, Lim said the company has stayed focused on its core competencies, which is creating solutions and software that complement its hardware offerings.
"People buy Sun not just of SPARC but also because of Solaris."
With the company back in black, the California-based IT giant said it can now pursue with more passion customers in various market segments, particularly banks to move from mainframe to Solaris.
"What we want to offer is not just hardware or software, but the whole IT ecosystem," he concluded.
