Gordon Haff, an analyst at Illuminata in Nashua, N.H., said the new chip "doesn't fundamentally change UltraSparc and Sun's positioning in any way. It's the type of incremental upgrade that computer makers sort of have to deliver."

He noted that IBM is expected to upgrade its Power processor later this year.

One Sun user, Jim Stock, the CIO of the Landrum Holding Company, is using UltraSparc III chips to run banking application software from the Kirchman Corp. and said any upgrades would require certification and testing by his application provider. Landrum Holding is a Columbia, Mo.-based regional banking company.

Stock said he's been happy with the performance of the UltraSparc III, but until his applications are certified "there is really no reason for us to look at it."