Schwartz was optimistic as always. He argued that the economic downturn is compelling more companies to look at Sun's open-source software and Open Storage products to keep costs lower. Its new Amber Road storage gear, which combines open-source software with performance-boosting flash memory, is attracting particular interest, according to Schwartz.

"In the midst of this economic downturn, discussions related to free and open-source software have substantially heated up," Schwartz said. "This is no longer a peripheral discussion with CIOs. Cost reduction related to open-source adoption has become a focal point for decision makers across the world."

Sun has made software a big focus of its strategy since Schwartz replaced Scott McNealy as CEO in April 2006. Almost all of its software is now available under an open-source license, and early last year it bought the open-source database leader MySQL for about $1 billion.

The idea is to get more companies using Sun products, even if the software is free to acquire, with the idea that Sun will be able to upsell those customers to support contracts and Sun hardware. That strategy has taken time, however, and shareholders have been getting impatient for a faster turnaround.

Sun's shares on the Nasdaq closed at $3.99 Tuesday, well off of their 52-week high of $18.03. Investors were encouraged by the results, however, pushing the stock 5 percent higher in after-hours trading.