Sun Eyes Wall Street In Bid To Regain Share

It was back to the future for Sun Microsystems last week in New York, as the beleaguered company said it would try to recapture its position as the computer company of choice on Wall Street. The strategy, part of an increased research and development push at Sun, aims to use the company's technical chops to set it apart from competitors in markets in which computers and operating systems are becoming commodities.

"We're going back to our roots," says John Loiacono, executive VP of software at Sun. "By taking our eye off the ball and not meeting some of the demand, we let business slip away. Now we're ready to take that business back," Loiacono says.

To lure banks and financial companies back, Sun president Jonathan Schwartz unveiled an industrial-strength version of Sun's Solaris operating system running on Advanced Micro Devices Inc. chips, a processor under development called Niagara that can simultaneously handle 32 threads, and plans for contracts that would let customers buy computing cycles for $1 per CPU per hour. Twenty Wall Street companies are testing the AMD systems, which can "blow the doors off" machines from competitors IBM and Dell, Schwartz says.

Wall Street remains a multibillion-dollar market for Sun, which was a major supplier of high-end workstations and servers to financial-services companies in the early 1980s. That market would be substantially larger if Sun hadn't made a number of miscalculations in the late '90s, Loiacono says. Among the missteps: not adequately addressing the price-performance ratio with its servers and, at one point, discontinuing R&D to make its Solaris operating system easier to use on x86-based systems.

As the market for servers based on the x86 hardware standard promoted by Intel and AMD grows, and sales of systems based on proprietary hardware such as Sun's Sparc microprocessor decline, Sun has needed to make its operating system and other software able to run on industry-standard computers.Sun "laid out a strategy that was clear and concise," says Bill Morgan, CIO at the Philadelphia Stock Exchange, which runs its trading-floor systems on Sun technology. An electronic options-trading system that's being rolled out, PHX XL, is based on Sun's new Solaris 10. As momentum on Wall Street shifts from conventional floor-based trading to electronic trading, the Philadelphia exchange remains committed to Sun because Solaris 10 promises to deliver the performance required to handle greater electronic volumes, Morgan says.

With the rollout of the options system, the exchange expects the number of electronic messages generated from other exchanges to double to 120,000 per second next year, and the number of electronic messages generated from its own floor to jump from 4,000 per second to 30,000 per second next year.

"Sun had fairly loyal customers in the financial-services community that have moved at least part of their operations to Linux and x86 because running on those platforms was cheaper," says Gordon Haff, an analyst with research firm Illuminata. "Solaris on x86 gives Sun quite a firm entree back in." But Haff is skeptical about how big an impact opening up Solaris will have on software developers. "Sun used to be the most popular Unix development platform, and it has really been upstaged by Linux in particular and open source in general," he says.

Sun's new version 10 of Solaris includes features meant to set it apart from Linux and Microsoft Windows, the operating systems of choice on x86 hardware.