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Sun Microsystems, Inc.

(650) 960-1300

4150 Network Circle
Santa Clara, CA 95054
www.sun.com

 

Sales

$11 billion

 

Business Description 

Sun’s business is singularly focused on products and services for network computing. Network computing has been the company’s focus for the 20 years of our existence, and is based on the premise that the power of a single computer can be increased dramatically as it is interconnected with other computer systems for the purposes of communication and sharing of computing power. Our product line consists of computer systems and workstations, storage, software and associated services. Our customers use our products and services to build mission-critical computing systems on which they operate all elements of their businesses. Our products and services are used in a wide range of technical/scientific and engineering applications in industries such as telecommunications, financial services, government, manufacturing, education, retail, life sciences, media and entertainment and healthcare.

Our products are based on several core technologies including our SolarisTM Operating Environment, our UltraSPARC® (UltraSPARC Scalable Processor Architecture) microprocessor architecture, and the JavaTM programming language. Key brands associated with Sun in addition to these are SunTM ONE (Open Net Environment), our software architecture, products and associated services for the creation of Services on Demand, the Sun FireTM series of computer servers, the Sun StorEdgeTM family of storage hardware and software, and our Sun BladeTM series of workstations. In August of 2002, we extended this product line with our first entry level server, the Sun LX-50 capable of running both the Solaris Operating Environment and the Linux operating system.

BUSINESS STRATEGY

Our business strategy is built around our single focus on network computing, and the computer systems, storage, software and services to enable our customers to achieve competitive advantages through the strategic use of information technology. The core elements of our business strategy include:

• An end-to-end architecture that extends our common Java technology based programming environment from devices as small as smart cards and cell phones to large multi-million dollar servers.

• On-going innovation in microprocessor architecture, systems design, and software to help ensure continuing technology leadership and resulting price-performance advantage.

• Commitment to open public application programming interfaces. Sun believes that our customers are best served when they have a choice and a competitive vendor environment. This requires that the industry agree on programming standards and compete to create the highest quality implementation.

• A robust partner community. We cultivate a large community of commercial software developers, system integrators, and resellers to add value to Sun products and services and to extend our reach and expertise. Our partner community enables us to deliver an increasing level of integration of our systems, storage, software and services to make our solutions faster to deploy and to help ensure the best possible performance.

• A direct sales organization for large customer accounts increasingly organized to deliver a single point of contact with Sun.

• A mission-critical support organization staffed worldwide to help ensure high satisfaction and profitable use of our products.

End-to-End Architecture

Developing and deploying services over the network requires an infrastructure platform that is enterprise ready, developer rich and economically compelling. This means that rather than offering the customer the cheapest server or storage array, we are focused on providing the combination of software and hardware that will give them the best value including: (1) minimize porting and migration costs when upgrading; (2) maximize system uptime and availability; and (3) provide the richest applications suite to a growing developer community. With this strategy, we believe we are able to offer the customer a platform that entails less annual administrative costs, developer training costs, and downtime costs, which decreases customers’ “total cost of ownership”.

In fiscal 2002, we introduced a number of new products supporting our strategy as an end-to-end infrastructure platform company and we completed the roll out of our UltraSPARC III microprocessor across our low, mid and high-end server lines. The UltraSPARC III processor is fully binary compatible with our previous generation processor, so customers can run existing applications without the time and cost of rewriting applications. In addition, we released our Solaris 9 operating system, which has created significant benefits to customers as it reduces system downtime and upgrade costs because it is designed to run all existing applications currently running on previous Solaris OE releases.

We also introduced a new line of low-end servers running the Linux Operating System on our UltraSPARC microprocessor as well as the Solaris Operating Environment on the X86 platform edition microprocessor architecture. These servers are part of our larger strategy to deliver highly dense racks of low cost and very manageable server groups that are based on open application programming interfaces.

Our Sun ONE platform consists of a number of Sun’s powerful and scalable products, including the Solaris Operating Environment, Sun ONE middleware products, and the Sun ONE Studio development environment. It also builds upon our well-established Java technology to help enable the creation and deployment of Sun ONE Services on Demand (i.e., the ability to provide information, data and applications anywhere, anytime and on any device, using open application programming interfaces that will work with a wide array of operating systems and applications).

Innovation

We believe that in order to be a leading developer of enterprise and network computing products and technologies, we must continue to invest and innovate. As indicated by our research and development investments of approximately 10-15% of annual revenues during each of the last three fiscal years, we are continually focused on technological innovation. Over the past few years, we have made significant investments in several of our product technologies. These investments include:


• the highly scalable UltraSPARC processor and systems architecture;

• our highly reliable and scalable Solaris Operating Environment;

• mission critical clustering, messaging, directory and web services infrastructure;

• the cross-platform Java software development environment, spanning smart cards, cellular handsets, set top boxes, desktop computers, and servers — used by our customers and independent software vendors;

• our highly scalable enterprise servers, from entry level to data center class, and workstations; and

• network-based storage systems and software, including Sun HighGroundTM storage management software and SunTM QFS and SunTM SAM-FS software.


In addition, during the first quarter of fiscal year 2003, we introduced our first line of X86 microprocessor general purpose entry level servers that can run either the Solaris Operating Environment or Linux open-source operating system. We intend to continue our investments into new computing technologies and are focused on continuing to develop and deliver leading-edge network computing products based upon our innovations.

Table of Contents

Many of these technologies provide us with a competitive advantage and differentiation in the marketplace. We believe by investing in research and development, we are able to develop and deliver more valuable systems technology to our customers, and therefore, are able to generate better long-term profit margins on our products.

Open Application Programming Interfaces (APIs)

From inception, we have focused on developing products and technologies based upon open APIs. We coined the phrase, “The Network is the ComputerTM”. Behind that simple phrase is the belief that the real power in computing lies in the ability to freely access and share information over the network, while unconstrained by proprietary software and hardware standards. In short, the network has become an integral part of our personal lives and our economy. Individuals access e-mail, the Internet, or private corporate networks through multiple devices including personal computers, cell phones, personal digital assistants, and even automobiles. Companies are interested in using networking technologies to link various constituencies across their organizations to better share information and intelligence, to streamline processes, gain efficiencies, accelerate time to market for key products, improve customer service, and ultimately gain competitive advantage.

The need for open APIs is at the heart of the Internet’s development. We believe that without them, too many proprietary software and hardware protocols cause both incompatibility and cost issues, making it too difficult and uneconomical for individuals and organizations to fully access and harness the network. Through open APIs, we believe application adoption and service deployments over the network will grow more quickly, which will increase the workload on the network, leading to increased demand for our computer systems. In addition, by adhering to open APIs, we are able to deliver more flexible and compatible systems products to our customers, reducing administrative costs and adding to the demand for our systems. For example, we have created technologies, such as the Network File System (NFS), UltraSPARC architecture and the Java technologies, providing customers with flexibility for their networking environments, and facilitating industry growth. In addition, through our Sun ONE software platform, we have extended our well-established Java technology platform and utilized Web industry standards including XML (Extensible Markup Language), SOAP (Simple Object Access Protocol), UDDI (Universal Description, Discovery and Integration) and WSDL (Web Services Description Language).

Partner Community

While our product and service offerings are very broad, we recognize that no single supplier of computing solutions can meet all of the needs of all of its customers. We have established relationships with leading value-added resellers, original equipment manufacturers, channel development providers, independent distributors, independent software vendors, and computer systems integrators to deliver solutions that our customers demand. Through these relationships, we are able to provide the end-to-end solutions that customers require to compete. As an extension of this strategy, in fiscal 2002, we entered into an OEM agreement with Hitachi Data Systems to provide highly reliable and available storage to the datacenter through the offering of the Sun StorEdge 9900 series of storage systems.

Direct Sales

Our sales force serves the telecommunications, financial services, government, manufacturing, education, retail, life sciences, media and entertainment and healthcare. Our direct sales organization for large customer accounts are increasingly organized to deliver a single point of contact with Sun. We have approximately 140 sales and service offices in the United States and 150 sales and service offices in 45 countries.

Mission Critical Support

We provide expertise in network computing through a broad range of global services, including support services (systems support for hardware and software), professional services (IT consulting, systems integration and system/ network management), and educational services (education consulting, skills migration and training).

BUSINESS ORGANIZATION

To facilitate innovation and provide world-class support for our global client base, we have focused our organization on the following products and services businesses. Each provides products and services for commercial and technical computing. The primary competitive differentiators for these products in the marketplace are their price/performance, scalability and reliability.

Enterprise Systems Products

The Enterprise Systems Products group provides an integrated family of mid-range and high-end enterprise servers systems for mission critical and high-performance computing environments. These products run application environments, directories, databases, web sites and many other applications.

Volume Systems Products

The Volume Systems Products group provides entry enterprise servers, blade computing (management of a pool of modular, single board servers, as one computing environment, which allows companies to dynamically allocate and re-allocate resources to changing workloads) and workstations with low price point and high computing density for horizontally scalable environments (large computing environments composed of clusters of smaller servers). The entry servers deliver network computing in a compact package, with a range of options in processing power, form factor and scalability.

Processor and Network Products

The Processor and Network Products group develops UltraSPARC microprocessors, associated companion application specific integrated circuits (ASICS), and leading-edge Network and Cryptographic products and technologies. At the heart of Sun systems, these components deliver world-class performance, scalability, and security to products ranging in price from less than $1,000 to multi-million dollar solutions, while maintaining binary compatibility across the entire spectrum.

Network Storage

The Network Storage group directly, and through third party relationships, provides complete storage solutions for an end-to-end IT infrastructure, from the operating system to servers, storage, software, services, and support. Sun’s complete Sun StorEdge arrays are optimized for Sun’s end-to-end infrastructure, while supporting heterogeneous environments.

Software

The Software group designs, develops and brings to market our Sun ONE software offerings, including the Solaris Operating Environment, the Java platform, Sun ONE middleware, our core technologies for consumer and embedded markets, which utilize the Java technology, JiniTM network technology, software development tools and our StarOfficeTM application software, which are based upon open source standards, including XML technology.

Sun Services (formerly Enterprise Services )

The Sun Services group provides a broad range of worldwide services for our network computing environment. These services include design, implementation and operation of enterprise and Internet computing environments, systems integration and support, professional services and education.

PRODUCTS

Our products and technologies, from our microprocessors to our Solaris Operating Environment to our full line of low-end and high-end scalable workgroup and enterprise servers, are designed, developed and produced for the network computing environment.
 
Enterprise Systems Products

Data Center/ High-Performance Computing Servers. In the data center/high-performance computing server group, we offer the Sun Fire 15K, the Sun Fire 12K, and the Sun EnterpriseTM 10000 servers. The Sun Fire 15K is one of the most scalable UNIX® platform-based systems in the marketplace, which incorporates our UltraSPARC III microprocessor, mainframe features such as dynamic partitioning (Dynamic System Domains) and a supercomputer-class Gigaplane-XBTM interconnect. The Sun Fire 15K server and the Sun Fire 12K are designed to offer greater performance and lower total cost of ownership than mainframe products. They are used for consolidations, application migrations, data mining and warehousing, custom applications, on-line transaction support, enterprise resource planning, high performance technical computing and databases. The Sun Enterprise 10000 server is our legacy product offering similar features as our Sun Fire 15K while running on our UltraSPARC II processor.

Mid-Range Servers. We offer nine midrange server products. Midrange servers provide reliability, availability and scalability to address the needs of data centers and enterprise-scale network computing at a moderate cost. Our Sun Fire 3800, Sun Fire 4800, Sun Fire 4810, and Sun Fire 6800 servers were introduced in fiscal 2001 and utilize the UltraSPARC III processor and the Solaris 8 Operating Environment. With these servers, we have enhanced processing power and various options available in processor and memory expandability, hardware redundancy and component accessibility. The Sun Fire 880R server was released in fiscal 2002 and uses the UltraSPARC III processor. It is built to deliver the most enhanced multiprocessing capability to the low-end of our family of Sun Fire servers. The Sun Enterprise 3500, Sun Enterprise 4500, Sun Enterprise 5500, and Sun Enterprise 6500 servers are our legacy systems that offer similar features while utilizing the UltraSPARC II processor and Solaris 7 Operating Environment.

Volume Systems Products

Entry Servers. We offer four high-end entry server products: the Sun Fire 880, Sun Fire 480R, Sun Enterprise 420R, and the NetraTM t 1400/1405 servers. In addition, we offer 10 low-end entry server products: the Sun Fire V100, Sun Fire V120, Sun Fire 280R, Sun Enterprise 250, Netra 120, Netra t1 200/205, Netra t 1120/1125, Netra 20, CT400 and Netra CT800. Low-end entry servers deliver network computing in a compact, low-cost package. The Netra CT servers are high density rack mountable servers, based on the Compact PCI standard, for telecommunication and network equipment providers.

In fiscal 2003, we introduced our first line of entry level X86 servers, the Sun LX50, which provide high density scalable solutions for Solaris and the Linux operating environments. This line is in addition to the Sun Linux-based Cobalt Appliance Servers, which include the Sun Cobalt QubeTM and the Sun Cobalt RaQTM series (4, 4i, 4r, XTR and 550), which have been designed to run Internet-related applications including file serving and web hosting, and support software applications such as electronic mail and electronic commerce.

Workstations and Information Appliances. Our workstation products include the Sun Blade 100 and Sun Blade 2000 workstations. Sun information appliances include Sun RayTM 100 and Sun Ray 150 enterprise appliances.

Processor and Network Products

UltraSPARC s-Series processors power the high-end and midrange server products from Sun, as well as, power desktops. These CPUs offer our highest level of performance, unmatched scalability and leading-edge RAS.

UltraSPARC i-Series processors offer a higher level of integration on the central processing unit enabling the price and performance design points deployed in Sun’s workgroup servers, rack mount servers, and high performance desktops.

UltraSPARC e-Series processors balance cost, power consumption and performance enabling economical, 64-bit server and desktop solutions, while maintaining binary compatibility with all SPARC® processors, past and present.

Sun’s Network and Cryptographic portfolio includes solutions based on technologies such as Ethernet, SSL (secure socket layer) and IPSec VPN (virtual private network), enabling high speed, secure network solutions.

Network Storage

High-End Data Center Storage. In fiscal 2002, we signed an OEM agreement with Hitachi Data Systems to distribute their high-end storage product with our resource management and file management software as the Sun StorEdge 9900 series. Designed for extreme availability, performance, scalability, connectivity, and manageability, Sun StorEdge 9900 series systems offer lower total cost of ownership because of storage consolidation and heterogeneous data sharing. These products provide a platform for direct attach storage or storage area network (SAN) solutions. The latest additions to the product family, Sun StorEdge 9980 and 9970 systems, incorporate our highest levels of performance and capacity, along with a functional blade architecture.

Midrange Storage. We offer a wide range of flexible, scalable storage systems that scale from the midrange to the data center, supporting high-performance computing and enterprise SAN implementations, as well as storage virtualization technology. In fiscal 2002, we introduced the StorEdge 6900 series and 3900 series storage systems. For midrange storage consolidation, Sun StorEdge 6900 series systems have built-in virtualization for management of open-SAN storage pools. The Sun StorEdge 3900 series delivers exceptional performance and high availability for clustered environments and focused applications, such as high-performance computing and decision support systems. In addition, we offer the Sun StorEdge T3 and Sun StorEdge A5200 arrays for the enterprise.

Workgroup Storage. Sun StorEdge products for workgroup applications offer a flexible, compact, cost-effective approach for growing storage demands. Their building-block architecture is designed to allow users to expand and customize as needed, for increased return on investment. The Sun StorEdge T3 array for the workgroup combines advanced RAID technology with industry-standard fiber-channel technology in a scalable package. In addition to the T3 array, we offer the Sun StorEdge D2 and Sun StorEdge A1000/ D1000 arrays, which offer performance and flexibility at low cost for a variety of environments.

Tape Backup and Restore. Our tape automation products provide the flexibility, scalable capacity, and high performance to meet the full range of needs from the desktop to the data center. Sun offers tape autoloaders, small-footprint libraries, and large-capacity, fast-access tape backup and restore solutions for mission-critical data centers. The complete family of Sun StorEdge tape libraries has been designed using leading robotics technology.

Storage Software. As an integral part of our complete storage solutions, we have implemented Storage ONE, a storage management strategy to provide an open, integrated, and automated storage management family. Built on Sun ONE, Storage ONE is based on industry standards and allows customers to choose best-of-class management components to provide automation and service-level management capabilities. Current Storage ONE software products include:

• Sun StorEdge Availability Suite software provides local and remote data replication services that are designed to reduce planned and unplanned disruptions and provide rapid recovery from disasters.

• Sun StorEdge Performance Suite (Sun StorEdge QFS) software provides a shared file-system service with quick data access for high-performance, data-intensive environments with very large volumes.

• Sun StorEdge Resource Management Suite software provides central monitoring, reporting, and analysis for proactive capacity management, cost charge-back, and strategic planning.

• Sun StorEdge Utilization Suite (Sun StorEdge SAM-FS) software provides fully integrated backup, archiving, remote copy, and volume management software to improve storage utilization and IT operational efficiencies.

SAN Solutions. The Sun StorEdge Open SAN Architecture provides a comprehensive set of products and services to help ease storage area network management and to allow the consolidation of storage resources on
 
the network for better, more cost-effective management of data growth. New products introduced in fiscal 2002 include, the Sun StorEdge Network 2 Gb FC Switch-16, the Sun StorEdge 2 Gb PCI Fiber Channel Network Host Bus Adapter (HBA), as well as, Sun StorEdge Traffic Manager software and Sun StorEdge Diagnostic Expert software.


Software

Sun ONE Platform:

Solaris Operating Environment. The Solaris OE product line includes desktop, intranet, Internet Service Provider (ISP) and enterprise operating environments for SPARC and Intel platforms. The Solaris Operating Environment is a high performance, highly reliable, scalable and secure operating environment that is easy to install and use, is optimized for the Java platform and supports more than 12,000 applications. The Solaris Operating Environment is optimized for enterprise computing, Internet and intranet business requirements, powerful databases and high performance technical computing environments.

In fiscal 2002, we introduced the Solaris 9 Operating Environment (Solaris 9 OE). The Solaris 9 OE creates a services platform by combining traditional operating systems functionality, application services, and identity management (management of user identities over the Internet or complex corporate networks, so that users can use a single sign-on to be authenticated and authorized to access certain files). It also delivers the security, manageability and performance to assist IT professionals in increasing service levels and decreasing costs and risks.

The Solaris 9 OE features the integration of the new J2EETM 1.3 software compliant Sun ONE Application Server 7, Platform Edition with a single server development and deployment license for use on Sun systems. The Application Server includes the high performance http engine and web infrastructure from the Sun ONE Web Server and the Sun ONE Message Queue. It also integrates the Sun ONE Directory Server, an industry-leading foundation for open, scalable identity management. The integration of these Sun ONE middleware elements into the Solaris 9 OE makes it easier to build and deploy application and web services based on Java, XML and SOAP technologies, while helping customers to save on acquisition, integration, testing, support, and management costs.

We also provide software solutions that focus on network management and network security that complement our server and storage product offerings. In addition, we provide Solaris Operating Environment and Java technology-based tools for software developers who create high performance applications for enterprises, telecommunications and the Internet.

Java Technology. Our Java platform is one of the first widely accepted application environments to allow development of application software independent of the underlying operating system or microprocessor. Sun expanded the definition and availability of the Java platform and extended it to small devices including mobile phones, smart cards, digital set top boxes, and residential gateways with the Java 2 Platform, Micro Edition (J2METM platform), Java CardTM, and Java 2 Platform, Enterprise Edition (J2EE) technologies. These Java platforms address very different markets yet share a common core architecture. These platforms complement our Java 2 Platform, Standard Edition (J2SETM) technology, which is used on personal computers and workstation clients. The Java 2 Software Development Kit enables developers to create and run both applets (miniature applications written in the Java programming language) that run inside a web browser, as well as applications that run outside a browser.

JiniTM Network Technology. JiniTM network technology is an open architecture that enables developers to create network-centric services, whether implemented in hardware or software, that are highly adaptive to change. Jini technology can be used to build adaptive networks that are scalable, flexible and can evolve as typically required in dynamic computing environments. There are two Jini network technology offerings: the Jini Starter Kit and the Jini Technology Core Platform Compatibility Kit.

StarOfficeTM Productivity Suite. StarOfficeTM is an office productivity suite which runs on most major operating environments and platforms including the Solaris Operating Environment, Microsoft Windows 95/98/ NT, Linux, OS/2, and Java platform. It has a fully integrated set of applications which provide word  processing, spreadsheet, graphic design, presentations, database access, HTML editor, mail/news reader, event planner, and formula editor tools. In fiscal 2002, we launched our StarOffice 6.0 software, the full-featured office productivity suite that provides customers with an economical alternative to proprietary office productivity suites that are expensive and have restrictive licensing policies.
 

Sun ONE Developer Tools. We develop and market software development tools designed to aid in application development and integration. The Sun ONE Developer Platform provides a desktop-to-mainframe development and test environment that spans portal, identity, application and integration functionality. Sun ONE development environments for programming in C, C++, and Java programming languages help developers to be more productive in creating fast, reliable, and scalable applications.

Sun ONE Middleware (formerly iPlanetTM software). The Sun ONE middleware products include Sun ONE Directory Server, Sun ONE Identity Server, Sun ONE Meta-Directory Server, Sun ONE Integration Server, EAI Edition, Sun ONE Portal Server, Sun ONE Web Server, Sun ONE Application Server, as well as Sun ONE Calendar Server, Sun ONE Messaging Server and various other applications, all of which enable enterprises to leverage their information and applications into services offered on intranets and the Internet. Sun ONE middleware products support the Solaris Operating Environment, Windows NT, HP-UX, AIX and Linux operating systems.

SERVICES

Our Sun Services team (formerly Enterprise Services) provides expertise in network computing through a broad range of global services, including support services (systems support for hardware and software), professional services (IT consulting, systems integration and system/network management), and educational services (education consulting, skills migration and training). Sun assists both technical and commercial customers, supporting more than 1.6 million systems in more than 100 countries, training more than 400,000 students annually, and providing consulting, integration and operations assistance to IT organizations worldwide.

Support Services

The SunSpectrumSM support services product offerings allow customers the power and flexibility to customize their support services contracts. Customers can choose from four levels of support that range from mission-critical to self-support. This service is sold separately or packaged with hardware, software and peripherals in a single price support service. Each contract type is specifically designed to provide our customers with high availability and continuous operation. We have invested resources in the field for direct service delivery. Higher levels of field resources are important to the overall investments being made in mission critical support capability. Our direct services are complemented by third-party service providers who primarily deliver hardware support services. Software support continues to be primarily delivered by our software support engineers. Third-party service providers provide additional support to important field resources (such as parts inventories and staff) to meet the service requirements of our installed base. Investments by these third-party service providers help us expand geographic coverage without additional fixed cost investment on our part.

We offer a variety of warranties for parts and labor on hardware products, ranging from one year to five years from date of sale, and a limited warranty on software, generally for 90 days from date of sale. We service products during the warranty period and provide contract service after the initial product warranty has expired. Post-warranty and warranty upgrade support services are primarily offered through the SunSpectrum service. Warranty and post-warranty services are provided through approximately 50 solution centers worldwide.

Professional Services

Sun Professional Services provides a suite of technical consulting and systems integration services to help customers plan, implement, and manage complex distributed network computing environments. Our professional services team specializes in providing customers with advanced systems, storage, and network architecture design consulting, platform integration, enterprise systems management and operation, and advanced Sun ONE and Java software integration. We provide the people, processes and technology and we partner with best of breed third-party systems integrators, to deliver single point-of-contact solutions tailored to meet customer needs. Our technical and project management experts help design IT architectures and plan migrations from legacy systems to network computing or help customers upgrade existing network computing environments.
To implement solutions, our integration experts help customers develop and deploy distributed computing environments for new applications, with an emphasis on solutions built on the Sun ONE platform and Java technology. To keep customer computing environments operating at peak performance, operations experts help customers manage the complexity of heterogeneous systems and networks. The Sun Professional Services team also delivers highly technical assistance to customers in critical areas such as network security and identity management, wireless network-based systems, and storage area networks.

 

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