Filed under: Competitive strategy, Sun Microsystems (JAVA)

Sun Microsystems, Inc. (NASDAQ: JAVA) wants to make yet another strategic change in its core business, according to CEO Jonathan Schwartz. Schwartz said yesterday that the open-source and server company plans to increase its focus on storage products and services using an internal reorganization to do so.

For this, Schwartz wants to merge the server and storage business units into a single unit focusing on storage and server convergence. In effect, Sun wants to sell and service more storage systems to make up for the lack of margin in its server business. At least, that’s how many are reading this move. Since acquiring StorageTek years ago, this move was anticipated. It’s now here.

In addition to making StorageTek’s product lineup more profitable to the company, Schwartz also may be making the move to fall in line with “virtual server” trends in the information technology field. In a sense, customers don’t care about buying servers or storage, but are interested in possibly “renting” a virtual server and storage system that acts as a single unit. This is precisely what Sun will try to push to customers as it slowly dumps aging mainframes.

According to Schwartz, Sun “wants to be in a position to innovate on its [customers’] behalf, at the system level, beyond the boxes — across blades [servers], racks, disk and tape.” Let’s see if this recent internal reorg and change in customer philosophy will have a positive revenue effect for Sun — something it desperately needs.

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This entry was posted on Wednesday, October 3rd, 2007 at 8:27 pm and is filed under Stocks Money News. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.