"They're in better shape recently than they were for much of last year," said Rob Enderle, principal analyst at Enderle Group. The company had been on a slow spiral downward for about five years but has begun to right the ship by focusing on its hardware line, open-sourcing Java and Solaris, and regaining ground in the all-important server market that it had lost to Dell, IBM, and HP more than five years ago, Enderle said.
The return to profitability is sweet victory for a company that began as a brash competitor in the technical workstation space, survived the crucible of the dotcom collapse, and now is poised to regain its status as an innovative technology giant just as it celebrates its 25th anniversary this month.
Founded in late-February 1982 by hardware designer Andreas Bechtolsheim along with entrepreneurs Scott McNealy and Vinod Khosla and software guru Bill Joy, Sun sharpened its teeth in the early days by besting bigger, more established firms like Apollo Computer (later part of HP) in the lucrative market for enterprise workstations.
An engineer's engineering company to the core, Sun was an early backer of innovative technologies like NFS (Network File System), Java, which started as an internal project by early Sun employee James Gosling in 1991, and open source. That openness to new technologies, coupled with a scrappy corporate culture under hockey enthusiast CEO McNealy, helped Sun thrive throughout the 1990s as a foe of companies like IBM, Microsoft, and HP, even as the advent of personal computers running Intel processors and Microsoft's Windows operating system ate into the enterprise workstation market.
The rise of Windows on Intel systems, or "Wintel," was a one-two punch for Sun in the enterprise. At marquee customers like GM, which has been using Sun systems for about 10 to 15 years, Sun workstations long ago gave way to Wintel PCs, said CTO Fred Killeen. "Historically, we would use Sun workstations, less now. The big part of [the switch to Wintel] is the end users now have a common platform that supports all their desktop applications as well as the CAD and CAE applications," Killeen said.