Sun is a global leader in enterprise network computing, technical network computing and workstations, and the origin of the worldwide Java technology paradigm.

Sun already has competency centers for Java in Hyderabad and Calcutta set up along with other organizations.

Bangalore, Chennai and Hyderabad are the three cities shortlisted. Teams from Sun, a combination of Sun employees from India, Singapore and the US, have visited the three cities in order to evaluate the pros and cons of each.

The center would be a subset of the engineering center in the US. The scale of investments are still being worked out following a detailed evaluation.

Seeking to consolidate its position in the Indian market, Sun will try to increase its market share in the server (high end computing machines) market.

Sun's focus on the server market has increased manifold during the last twelve months, a result of the change in its revenue profile in India during the same period.

For the first time, revenues from servers have grossed more than 50 per cent of its total turnover. Sun sees servers contributing increasingly to its revenue in the future compared to workstations (computers used in designing and drawing), which account for the remainder of the revenue from hardware.

Increasing server sales in Sun's revenue reflect the adoption of large enterprise applications by corporations and institutions in India, a trend that Sun expects will continue.

"If a server is down the company will not be able to carry on with its business. Most importantly, they cannot log onto the Internet and will not have access to the world wide web." said Anand Halbe, general manager, Sun Microsystems. "In other words, more and more companies are running mission critical applications on their systems."

Following the establishment of its subsidiary in India earlier last year, Sun has set up a satellite solution center to service its customers and has also centralized its services.