Sun Microsystems Inc. F1Q09 (Qtr End 09/28/08) Earnings Call Transcript

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2008-10-30 19:24:10.0

Tags: Sun Microsystems Inc., Jonathan Schwartz, Call Transcript, Wachovia Corp., Earnings, Citigroup Inc., Volume System, Blade Servers, Storage, Utility Computing, Servers, Hardware, Seeking Alpha, Sun Microsystems Inc., Jonathan Schwartz, Call Transcript, Wachovia Corp., Earnings, Citigroup Inc., Volume System, Blade Servers, Storage, Utility Computing, Servers, Hardware, Seeking Alpha

Question-and-Answer Session

Operator

Ladies and gentlemen, we will now begin the question and answer portion of today's call. (Operator Instructions). Our first question comes from David Wong of Wachovia.

David Wong - Wachovia

Thank you very much. When you said you saw a shift of high-end spark to volume systems, are you referring to volume Niagara-based system or do you mean x86? And for the same amount of computing capability, does your revenue and profit dollar get impacted the customer shifts to the volume systems?

Jonathan Schwartz

So, to the extent that we saw a shift, is to both. I mean there is no clear pattern in one way or another. In general, companies running the Niagara platforms tend to be more focused on very high scale and power efficiency and those running x64 systems were a little more focused on kind of single thread performance.

So, overall, I am not sure it's as much frankly as a shift from high-end to volume systems as a slowing of the high-end which, by definition, makes it look like the low-end is going to grow. I think the low-end was kind of be growing anyway. What appears to us to have happened is a lot of customers said, you know, I think I'll put off for a quarter or so a decision about the next big out.

In terms of the profitability, over the long-term, the profitability of the low-end systems, I mean the high-end systems come from somewhere. They come from the low-end continuing to grow and expand and upgrade.

So, clearly, the high-end systems are more lucrative in the near term but again, we just want them on Sun. That gives us a better shot at the future. And again, we feel pretty good about our offerings on both sides.

David Wong - Wachovia

Great, thanks.

Ron Pasek

Operator, next question please?

Operator

Our next question comes from Richard Gardner from Citigroup.

Richard Gardner - Citigroup

Hi.

Jonathan Schwartz

Hi, Rich.

Richard Gardner - Citigroup

I just had a couple of questions. First of all, I was hoping you could give us some sort of indication of solaris attach rates on your volume systems these days and whether that's going up or down or sideways?

Jonathan Schwartz

I think for the most part, it's going up. What we are seeing and clearly you can see this on the open storage line, the open storage are almost completely solaris-based. On the others, you know, on the broader x64 platforms and some of the blade offerings, it's a pretty strong mix between Linux, Windows and Solaris.

 

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