Sun Forms New Computer Systems Organization

Sunday Apr 1st 2001 by Jayson Matthews
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The company's System Products group, best known for developing Sun's host of desktop and edge computing devices (such as the Sun Cobalt appliances) and the Network Service Provider group (the brains behind the servers) have been melded into a new entity called Computer Systems.

Palo Alto, Calif.-based Sun Microsystems (Nasdaq: SUNW) announced today that it has combined two of its better-known product groups into a new, single organization. The company's System Products group, best known for developing Sun's host of desktop and edge computing devices (such as the Sun Cobalt appliances) and the Network Service Provider group (the brains behind the servers) have been melded into a new entity called "Computer Systems."

The move comes just days after Sun bottomed out on its worse stock day in 52 weeks.

CEO Ed Zander said both groups greatly complimented each other, so combining the two "just made sense." The two groups alone, he said, have been core to the company's strength in the enterprise server provider markets, carrier-grade systems development and edge devices market, which basically represents the mainstay of Sun's diverse offerings.

"There's no better time than now to combine the resources, talents and energies of these two groups into one, focused systems group to continue our momentum and success," said Zander.

The new Computer Systems organization will be responsible for enterprise and workgroup servers, network servers, edge computing devices, desktop products, Sun's wireless initiative and SPARC processor development. Executive VP John Shoemaker, who has been chosen to lead the new group, said his primary goal will be to ensure Sun's R&D investments and core technology, as well as product and marketing resources, are deployed widely and effectively across these areas.

"This is a win-win move for Sun," said Shoemaker. "With this new singular systems focus we can compete even more aggressively to continue our success and leverage the synergies of both groups to drive into new markets."

It remains to be seen whether such focus is what Sun needs in this beleaguered market. The company's share price on Wednesday slipped about 7 percent and set a 52-week low after brokerage Lehman Brothers said the company could be dropping its prices to the detriment of its profit margins. Analysts at both Bear Stearns and Bucking Research slashed their estimates for Sun Thursday.

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