Sun Microsystems, Inc. (NASDAQ: JAVA)[3] is a multinational vendor of computers, computer components, computer software, and information technology services, founded on 24 February 1982.[4] The company is headquartered in Santa Clara, California (part of Silicon Valley), on the former west campus of the Agnews Developmental Center.

Products include computer servers and workstations based on its own SPARC processors as well as AMD's Opteron and Intel's Xeon processors; storage systems; and, a suite of software products including the Solaris Operating System, developer tools, Web infrastructure software, and identity management applications. Other technologies of note include the Java platform and NFS.

Sun is a proponent of open systems in general and Unix in particular and a major contributor of open source software.[5]

Sun's manufacturing facilities are located in Hillsboro, Oregon and Linlithgow, Scotland.

The "Bubble" and its aftermath

During the dot-com bubble, Sun experienced dramatic growth in revenue, profits, share price, and expenses. Some part of this was due to genuine expansion of demand for web-serving cycles, but another part was synthetic, fueled by venture capital-funded startups building out large, expensive Sun-centric server presences in the expectation of high traffic levels that never materialized. The share price in particular increased to a level that even the company's executives were hard-pressed to defend. In response to this business growth, Sun expanded aggressively in all areas: head-count, infrastructure, and office space.

The bursting of the bubble in 2001 was the start of a period of poor business performance for Sun.[12] Sales dropped as the growth of online business failed to meet predictions. As online businesses closed and their assets were auctioned off, a large amount of high-end Sun hardware was available very cheaply. Much like Apple, Sun relied a great deal on hardware sales.

Multiple quarters of substantial losses and declining revenues have led to repeated rounds of layoffs,[13][14][15] executive departures, and expense-reduction efforts. In December of 2001 the share price dropped to the 1998 pre-bubble level of about one hundred dollars or so and then kept going, a rapid fall even by the standards of the high tech sector at that time. The stock dipped below 10 dollars a year later, one-tenth of its 1990 value, then quickly bounced back to 20, where it has hovered ever since. In mid-2004, Sun ceased manufacturing operations at their Newark, California facility and consolidated all of the company's US-based manufacturing operations to their Hillsboro, Oregon facility, as part of continued cost-reduction efforts.[16] In 2006 Sun closed the Newark campus completely and moved 2,300 staff to its other campuses in the area.[17]

Many companies (like E-Trade and Google) chose to build Web applications based on large numbers of the less expensive PC-class x86-architecture servers running Linux, rather than a smaller number of high-end Sun servers. They reported benefits including substantially lower expenses (both acquisition and maintenance) and greater flexibility based on the use of open-source software. That trend is slowing and may be reversing,[citation needed] given (1) the throughput and efficiency of Sun's new horizontally-scaled systems (see below) and (2) the fact that both Sun's flagship Solaris operating system and its UltraSPARC T1 processor are now fully open-source.

Higher level telecoms control systems such as NMAS and OSS service predominantly use Sun equipment. This use is due mainly to the company basing its products around a mature and very stable version of the Unix operating system and the support service that Sun provides.

Present focus

In 2004, Sun canceled two major processor projects which emphasized high instruction level parallelism and operating frequency. Instead, the company chose to concentrate on processors optimized for multi-threading and multiprocessing, such as the UltraSPARC T1 processor (codenamed "Niagara"). The company also announced a collaboration with Fujitsu to use the Japanese company's processor chips in mid-range and high-end Sun servers. These servers were announced on 17 April 2007 as the M-Series, part of the SPARC Enterprise series.

In February 2005, Sun announced the Sun Grid, a grid computing deployment on which it offers utility computing services priced at $1 (US) per CPU/hour for processing and per GB/month for storage. This offering builds upon an existing 3,000-CPU server farm used for internal R&D for over 10 years, of which Sun markets as being able to achieve 97% utilization. In August 2005, the first commercial use of this grid was announced for financial risk simulations which was later launched as its first Software as a Service product.

In January 2005, Sun reported a net profit of $19 million for fiscal 2005 second quarter, for the first time in three years. This was followed by net loss of $9 million on GAAP basis for the third quarter 2005, as reported on April 14, 2005. In January 2007, Sun reported a net GAAP profit of $126 million on revenue of $3.337 billion for its fiscal second quarter. Shortly following that news, it was announced that Kohlberg Kravis Roberts (KKR) would invest $700 million in the company.

In recent years Sun's engineering work has become international, with substantial groups in Bangalore, Beijing, Dublin, Grenoble, Hamburg, Prague, St. Petersburg, Tel Aviv, Tokyo, and Trondheim.

A weekly summary of news about Sun and its products is posted to "System News for Sun Users", now in its 10th year.