Sun Microsystems, Inc. provides network computing infrastructure solutions that drive global network participation through shared innovation, community development and open source leadership. Guided by a singular vision, “The Network is the Computer™”, we provide a diversity of software, systems, storage, services and microelectronics that power everything from consumer electronics to developer tools and the world’s most powerful data centers.
With core brands including the Java™ technology platform, the Solaris™ Operating System, the MySQL™ database management system, Sun StorageTek™ storage solutions and the UltraSPARC® processor, our network computing platforms are used by nearly every sector of society and industry and provide the infrastructure behind some of the world’s best known search, social networking, entertainment, financial services, manufacturing, healthcare, retail, news, energy and engineering companies.
By investing in research and development, we create products and services that address the complex information technology issues facing customers today, including increasing demands for network access, bandwidth and storage. We share these innovations in order to grow communities, in turn increasing participation on the network and building new market opportunities while maintaining partnerships with some of the most innovative technology companies in the world.
Our business strategy is to provide superior network computing infrastructure solutions that rely on innovation as a core differentiator. A key driver behind this strategy is the development, integration and sharing of our software, microprocessors, storage, services and systems in order to grow communities of developers and users around the world, while increasing participation on the network and building new markets for our solutions.
With a strong commitment to open standards, open interfaces and the open source community, we focus on creating communities and sharing innovations and technologies to foster global network participation and advance the use of the Internet as a social utility, driving increases in use and demand for the infrastructure to support that increased use. Our open source initiatives are intended to increase participation in software and hardware design by making our innovative hardware and software intellectual property freely available. A core premise to the success of our software business is our ability to attract innovative application developers to our Java platform and Solaris Operating System. We build relationships with these communities of developers to stimulate demand for our commercial products and services. For example, more Java technology-driven devices means more demand for what we build to support those devices. Today, there are billions of Java-enabled devices in the marketplace. As more people gain access to the network, more opportunities surface for developers and businesses to deploy applications that create value, from educational institutions deploying high-performance computing grids, to banks and social networks serving millions of users. Bringing more people to the network and encouraging development of community-based intellectual property fuels greater demand for the innovative technologies and services that we create.
Accordingly, the cornerstones of our business strategy include:
Innovation and Intellectual Property Creation. Innovation is the core of our business. A sampling of innovations introduced during fiscal 2009 includes the following:
• Released the Sun StorageTek™ T10000B, the industry’s first one terabyte tape storage drive.
• Introduced the Sun Storage J4000, a new line of economical storage arrays, and the Sun Fire™ X4540, a new highly efficient, high-performance addition to the popular Sun Fire X4500 “Thumper” family.
• Unveiled the Unified Storage System – the Sun Storage 7000 family (“Amber Road”) – based on industry standard components and Sun’s robust software stack. The system offers enhanced performance and diagnostics, and increased troubleshooting all while using one-fourth the energy consumption of competing storage systems, resulting in reduced implementation times and up to 75% cost savings.
• Introduced JavaFX™ 1.0, a new platform that merges form and functionality for building Rich Internet Applications with immersive media and content for Web browsers and desktops.
• Introduced the Identity Compliance Manager, a simple and cost-effective solution to help customers better manage business and compliance risks.
• Introduced the SPARC Enterprise® T5440 server –a 4RU system with up to 256 threads — the first server to deliver the scalability and reliability of traditional midrange systems with the performance and energy efficiency of the UltraSPARC T2 Plus architecture.
• Introduced new additions to Sun Netra™ carrier-grade server family, driving performance, efficiency and scalability, including: Sun Netra X4250 server, Sun Netra X4450 server, Sun Netra T5440 server.
• Partnered with Fujitsu on a new enhanced line of SPARC Enterprise servers that delivers a virtualization and consolidation platform with up to 80% better performance on commercial applications and 100% better performance on HPC workloads and using 44% less energy per core.
• Introduced the next step in end-to-end enterprise Flash strategy with the availability of robust solid state drive (SSD) Flash technology in Sun’s x64 and chip multi-threaded (CMT) Rack and Blade systems.
• Expanded disk storage portfolio with high-performance disk storage arrays, Sun Storage 6580 and 6780, that provide significantly better price to performance alternatives than the competition and enable customers to consolidate workloads within the same data center footprint for greater efficiency.
• Introduced the JavaFX Mobile Platform.
• Introduced the Sun GlassFish Portfolio, a complete, cost-effective, open source, high-performance Web platform, based on GlassFish, the industry’s most downloaded application server.
• Introduced a new version of Sun xVM VirtualBox™ as well as xVM VirtualBox Software Enterprise Subscription, offering 24/7 premium support for enterprise users.
• Introduced a new version of OpenSolaris™ and updates to the Solaris 10 Operating System.
Interoperability and Choice. We take a “whole system” view of the products that we deliver into the marketplace. We are uniquely qualified to integrate our microelectronics, servers, storage, software and services into eco-responsible solutions that can transform information technology (IT) into a competitive weapon for customers. Our focus on providing multi-platform implementations provides customers with greater choice for their heterogeneous environments. The Java Enterprise System is available on Linux, Windows and HP-UX platforms in addition to Solaris. Our x64 systems are available for use with Solaris, Windows, Red Hat and SuSe Linux operating systems, and our SPARC® systems are available with Solaris and Ubuntu Linux. Interoperability gives customers choice so they can choose best-of-breed hardware and software solutions for their IT environments and lowers barriers to entry and exit.
Environmentally Responsible Products and Business Practices. Eco-responsibility is part of our overall corporate social responsibility strategy, which strives to create positive social change, minimize environmental impact and generate business. Our approach to eco-responsibility is to deliver eco-friendly products that enable sustainable computing, reduce the environmental impact of our own operations and build and share open source solutions.
We are innovating to develop products and programs that reduce energy needs and carbon dioxide production at all levels including microprocessors, servers, thin clients and computer grids. We are also reducing the environmental impact of our own operations by streamlining data center operations for maximum efficiency, choosing less harmful materials; working to recover, remanufacture or recycle products; and continuing to strive to minimize electronic waste.
Our cost control objectives are facilitated by our Open Work program, which allows employees to work wherever they need or want to — while armed with a cell phone and Internet access — which has contributed to reduced real estate costs and we believe has eased pollution and reduced energy use. More than 56% of our employees around the world work from home or a flexible office, saving us tens of millions of dollars annually in real estate costs. We have driven out additional costs by significantly consolidating our global data center square footage and implementing energy efficient data center design principles.
During fiscal 2009, our Systems revenue was comprised principally of revenue from Server Products and Storage Products. Our Services revenue was comprised of sales from two classes of services: (1) Support Services (Support Services and Managed Services) and (2) Professional and Educational Services. Support Services are services that offer customers technical support, software, and firmware updates, online tools, product repair and maintenance and preventive services for system, storage and software products. Managed Services include on-site and remote monitoring and management for the components of their IT infrastructure, including operating systems, third-party and custom applications, databases, networks, security, storage and the web. Professional Services are services that enable customers to reduce costs and complexity, improve operational efficiency and build or transform their IT infrastructure. Professional Services include IT assessments, architectural services, implementation services and consolidation and migration services. Educational Services include training and certification for individuals and teams. In fiscal 2009, 2008 and 2007 Server Products represented approximately 42%, 45%, and 46%, respectively, of total net revenues. In fiscal 2009, 2008 and 2007, Storage Products represented approximately 16%, 17% and 17%, respectively, of total net revenues. In fiscal 2009, 2008 and 2007, Support Services represented approximately 32%, 29% and 29%, respectively, of total net revenues. In fiscal 2009, 2008 and 2007, Professional and Educational Services represented approximately 10%, 9% and 8%, respectively, of total net revenues. A table providing external revenue for similar classes of products and services for the last three fiscal years is found in Note 15 to the Consolidated Financial Statements in Item 8. Financial information for each segment for fiscal 2009, 2008 and 2007 is found in Note 15 to the Consolidated Financial Statements in Item 8.
We develop innovative networking computing products and technologies that include energy-efficient servers, storage, open source software and tools. For information about revenue for similar classes of products and services, refer to Note 15 to the Consolidated Financial Statements in Item 8 and Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations — Results of Operations.
The substantial growth of network data and traffic, increasing compliance and regulatory demands, expanding needs for increased computing capacity and market pressure for energy and space reductions require a broad set of system solutions that are cost effective, reliable, scalable and eco-responsible.
Servers. We offer a full line of scalable servers based on SPARC64, UltraSPARC, AMD Opteron™ and Intel® Xeon® microprocessors, that range from cost and energy efficient entry level servers and blade systems through data center/high-performance business critical computing servers designed for heterogeneous computing environments.
Entry server systems. We offer a wide range of Sun Fire and Sun Blade™ entry server systems differentiated by their size, their cost, their processor architecture (UltraSPARC, SPARC64, AMD Opteron or Intel Xeon), their form factor (rack, blade or stand-alone systems) and the environment for which they are targeted (general purpose or specialized systems). These systems are compatible with the Solaris, Linux and Windows operating system environments.
Enterprise and data center servers. Our enterprise and data center servers, including the Sun Fire and SPARC Enterprise product families, are designed to offer greater performance and lower total cost of ownership than mainframe systems for business critical applications and more computational intensive environments. These systems are based on UltraSPARC, SPARC64, AMD and Intel microprocessor platforms and are also compatible with the Solaris, Linux and Windows operating system environments.
Desktops. Our Sun Ray™ Ultra-Thin Client platforms provide an alternative to traditional desktop personal computers where client applications are better suited and more economical to run on a network versus an individual desktop platform.
We also offer a line of products aimed at the unique needs of Original Equipment Manufacturers (OEMs) and Network Equipment Providers (NEPs). Rack-optimized systems and our blade product offerings combine high-density hardware architecture and system management software that OEMs find particularly useful in building their own solution architectures. Our NEP-certified Sun Netra systems are designed to meet the specialized needs of NEPs.
Microelectronics. Our microelectronics business develops and sells silicon-based chips that facilitate networking, cryptography and high-performance computing. These chips are utilized by OEM customers and hardware vendors worldwide in a broad range of devices from servers to routers, switches, network devices, medical imaging, industrial printing and more.
Storage. We offer a broad range of products and services for securely managing mission critical data assets. Our entry-to-enterprise-level data storage products and services include heterogeneous tape, disk, software, networking and services for mainframe and open systems environments.
Our tape storage includes libraries, drives, virtualization systems, media and software. The extensive disk system product line includes data center disks, Network Attached Storage (NAS), Enterprise Archive System, mid-range disks, workgroups disks, a boot disk and a full range of disk device software.
We are leveraging the Solaris Operating System across our storage portfolio to increase data management per administrator, scalability, security, utilization rates, observability and self-healing. The heterogeneous, industry-standard modular storage hardware works with Windows, Linux, z/OS, HP-UX, AIX and Solaris platforms and other software, so customers can more quickly and cost-effectively adapt to changing business needs. Our Storage solutions help to improve data availability, providing fast data access, dynamic data protection for restoration and secure archiving for compliance.
Software. Our software offerings consist primarily of enterprise infrastructure software systems, software desktop systems, developer software and infrastructure management software.
Solaris. The Solaris Operating System is a high performance, reliable, scalable and secure operating environment for SPARC and x64 platforms. It is optimized for enterprise computing, Internet and intranet business requirements, powerful databases and high-performance technical computing environments. The Solaris Operating System runs on hundreds of different server platforms including standard x64/x86 servers. The ability to run on multiple platforms has contributed to the growth of the Solaris Operating System on non-SPARC based systems over the last three years. Leading OEM partners including IBM, Dell, HP, Fujitsu Technology Solutions, Inc. and Intel support and offer Solaris on x86 hardware.
OpenSolaris. OpenSolaris is an open source project we created in 2005 to build a developer community around the Solaris Operating System. In June 2009, Sun released the OpenSolaris 2009.06 operating system, delivering industry leading features in networking, storage and virtualization, and significant performance enhancements and developer productivity updates. Central to the new release is the inclusion of Project Crossbow, a significant networking technology development to Solaris. Extending the features that made the Solaris Operating System a leading technology platform, OpenSolaris 2009.06 is a major step forward for enterprises looking to deploy the next generation of Solaris that includes the latest innovations from Sun and the OpenSolaris community.
Java Technology. Java technology plays a key role in powering compelling content and rich end-user experiences across various consumer electronics platforms. The Java platform is a global standard that powers billions of devices — from desktop browsers and computers to mobile phones and Blu-ray Disc players, TVs, Java smart cards and other connected consumer products.
Middleware. We also offer a full range of middleware solutions including mission-critical clustering, messaging, identity management, directory, service-oriented architecture (SOA), business integration, application server and Web services infrastructure software. Other software offerings include provisioning and monitoring software for network computing resource optimization and systems management simplification.
Virtualization. We offer an end-to-end portfolio of virtualization products from the desktop to the data center — Sun xVM VirtualBox™, Sun VDI and Sun xVM Ops Center.
MySQL. MySQL is one of the fastest growing open source databases in the world. Many of the world’s largest and fastest-growing organizations use MySQL to save time and money powering their high-volume web sites, critical business systems and packaged software. We provide corporate users with commercial subscriptions and services and actively support the large MySQL open source developer community.
We offer a broad range of services from Support Services and Managed Services for hardware, software and client solutions, to Professional Services and Educational Services. We assist customers globally with Support Services contracts in more than 100 countries.
Our services innovation is focused on integrating technology, knowledge, process and partners to deliver customer satisfaction through our services to architect, implement and manage IT infrastructure. Our global service and support offerings help our customers increase system service levels, improve data center operational efficiency and effectiveness, and to deploy next-generation automation technologies to provide predictive, preemptive and proactive service to heterogeneous infrastructures.