Sun, Fujitsu team up against HP, IBM

Duncan Martell

CALIFORNIA: Sun Microsystems Inc. is teaming up with long-time partner Fujitsu Ltd. of Japan and Siemens of Germany to jointly develop the next generation of Sun systems, the companies said.

Seeking to dispel questions over the viability of its often go-it-alone technology strategy, Sun said the three had agreed to jointly develop the next generation of computers based on Sun Solaris software and SPARC computer chips.

"In order to (be) 'best-in-class' in Unix we had to do something about Solaris and SPARC because there were questions raised in the marketplace about its viability," Joseph Reger, chief technology officer at Fujitsu Siemens Computers in Germany, said in a telephone interview of the move to back Sun.

Sun and Fujitsu will bring together their Solaris and SPARC-based server product lines by mid-2006, creating a line of high-end machines for running corporate data centers. These systems will be code-named the Advanced Product Line, or APL.

When complete, the companies said, the APL will replace Sun's and Fujitsu's existing Sun Fire and PrimePower product lines, respectively.

Fujitsu, one of the world's largest computer hardware and services companies, has been partners with Sun from the company's earliest days two decades ago.

In a joint venture with Siemens, Fujitsu sells SPARC-based servers and also mainframes and Windows-based machines that make it one of Europe's largest computer makers.

"Not only does this make sense for Sun," said Jean Bozman, a server analyst with market research firm IDC. "I think it's going to make customers feel that there is a lot more strength in the foundation technology because it isn't just Sun taking a bet on it," she said following a news conference here.

Reger, of Fujitsu Siemens, said that by joining forces with Sun, the companies could pose a more formidable threat against its two main rivals in the Unix market -- Hewlett-Packard Co. and International Business Machines Corp.

Sun ranks No. 2, with 28 percent of the Unix server market, closely behind top-ranked Hewlett-Packard, which holds 31 percent, according to market share data from IDC. IBM ranked No. 3 with 25 percent of the market during the first quarter.

But while HP and IBM are pushing hard to move into the rival Linux market, Sun remains focused on the Unix market.

SUN SHOWS PRAGMATIC STREAK

Sun Chief Executive Scott McNealy said in an interview that while Sun, Fujitsu and Fujitsu Siemens will combine research and development efforts, they will continue to compete in selling their own separately branded machines.

"To be able to leverage the two companies' investments in the hardware space is clearly an advantage," McNealy said following the news conference.

Reger said the deal will combine Sun's mid-range and low-end Solaris computers and Fujitsu's and Fujitsu-Siemens' mainframe-class computers on the same Solaris platform.

"Both companies will market the same, yet unnamed product line," Reger said. "This is not a joint venture. We're not putting companies together. This is a joint development and marketing effort to further the cause of Solaris."

In recent years, Sun has been battling to fend off the threat of low-cost competition from computers running mass-market chips from Intel Corp. and computers running on Linux software, the upstart rival to Sun's Unix-based systems.

The expanded partnership marks the second recent move by Sun to broaden its base of industry support. In early April, Sun did an about-face and patched up its differences with Microsoft Corp., a bitter rival, in exchange for Microsoft's paying it $2 billion to settle antitrust issues with Sun.

(Additional reporting by Lucas van Grinsven in Amsterdam and Eric Auchard in New York)






© Reuters