Sidebar: Vendor Tries to Regain Footing on Wall Street

By Marc Ferranti and Robert McMillan

September 27, 2004 12:00 PM ET

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Computerworld - NEW YORK -- Sun Microsystems last week fired off a barrage of product promotions, upgrades and service announcements here in an attempt to retake its traditional stronghold in the financial community.
At a banquet hall full of financial services executives, Sun President Jonathan Schwartz made the case that Solaris offers better computing performance and systems management for less money than comparable Linux operating systems.
Schwartz acknowledged that Sun failed to offer the low-cost servers that Wall Street users sought in the past few years. "We didn't have much to deliver," he said. "Now, our shelves are full."
"There's no question that Sun was tremendously successful in the financial community when it was less price-sensitive, but they then lost ground to Linux," said Gordon Haff, an analyst at Illuminata Inc. in Nashua, N.H., who attended the event.
In an effort to take back customers that Sun lost to Linux, Schwartz announced a 50% discount on Solaris right-to-use licenses for customers upgrading from Linux. Promotions geared toward financial companies include a trade-in program offering cash credits to users switching from servers based on Intel's Xeon processors to Sun Fire systems with AMD's Opteron chips. Sun also is offering a free trial of a Sun Fire V20z server and Solaris 10 to select customers.
Test Case
Many of the product announcements weren't really new, Haff said, adding that last week's event was an effort by Sun officials to show that "they have completely changed the company's strategy. This is a test case for the future. They need to succeed here on Wall Street."


Sun President Jonathan Schwartz

Schwartz has affectionately referred to the financial services industry as "the swamp from which we spawned." But with the economic downturn that began in 2000, Sun's cozy relationship with the industry cooled, and the company found itself on the losing end of a price/performance war against Linux running on Intel-based systems.
Sun will have its work cut out for it when it comes to convincing the financial industry that it can be a low-cost server provider, said Dan Stivers, CEO of 7ticks IT Consulting Inc. in Chicago. "The financial industry as a whole is not buying the fact that there is a better cost return by paying fees to Microsoft or Sun," he said.
For some users, though, pricing isn't the whole story.
"We have to look at the whole value proposition, though of course price itself is important," said Steve Rubinow, chief technology officer at Chicago-based Archipelago Holdings Inc., which operates an electronic stock exchange. "IfI can manage an environment of [just] Sun servers and avoid support headaches, running Sun offers an advantage."
Rubinow said that Archipelago had been eyeing Linux systems but that new technologies such as Solaris 10 were a major factor in keeping the company in the Sun camp.
The Philadelphia Stock Exchange is evaluating Linux, but it's sticking with Solaris in order to get a new electronic options-trading system up and running in a hurry. "We already had an installed base of Sparc and Solaris, so the thing that would enable us to get to market fastest was to build upon what we had," said CIO Bill Morgan.

Ferranti and McMillan write for the IDG News Service.

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