January 15, 1997

Mountain View, Calif. -- Sun Microsystems CEO Scott McNealy said Sun will tackle both the enterprise and the workgroup server space dominated by Windows NT over the next six to nine months.

In a conference call Wednesday, McNealy told financial analysts to expect both continued price cuts and a slew of new products.

Sun plans to go after the "SOHO server marketplace" with Solaris x86 and new products coming in late spring or early summer, he said.

"We want to play in that market, although we've not been high volume there in the past. We have the chip, the OS, the purchasing volume, the distribution capability and we have the applications and we're going to go at it like crazy. Stay tuned. We're not there yet, but we have some exciting stuff in the labs that you'll see in the next six to nine months," McNealy said.

In response to an analyst's question about Sun's lack of success in that market, McNealy said, "We have a lot of work we need and can and will do shortly in channel promotion and partnering."

Sun's answer to the PC, where McNealy acknowledged Wintel as the winner, is the JavaStation, although Sun does not expect to deploy large numbers of those machines until 1998. Sun is using itself as a test case and will install 3,000 JavaStations inside the company by June 30, McNealy said.

McNealy also cited Sun's SparcStation 5 Model 170, which the company launched last week, as a way for Sun to compete against the PC. Sun will also continue to cut prices, as it did with its Ultra workstations and low-end Ultra servers in November.

Sun next week will launch Starfire, which sources said is the code name for a 64-way Ultrasparc server based on acquired from Cray Business Systems Inc.

But McNealy said "the jury is out" on Sun's and Microsoft's embedded strategies. "They have Windows CE, we have the Java VM and Java chips and are licensing to everyone imaginable. It's early days and we think it's a fair food fight. CE could be Bob 4.0." Microsoft Bob was Microsoft's ill-fated consumer operating environment.

McNealy also said he didn't know whether Microsoft was in compliance with its Java license but said if there was a problem, it was being worked out privately between Microsoft and JavaSoft President Alan Baratz.

Copyright 1997