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Sun's Zander: We're Going After HP

NEW YORK -- The outgoing president and COO of Sun Microsystems said opportunities for enterprise sales these days -- given that there are so few -- are in targeting competitors' installed bases.

Especially up for grabs, Ed Zander asserted, are customers of Hewlett-Packard and Compaq while the computing giants consolidate their operations after a bruising merger battle.

"We're targeting our sales forces with incentives for conversion from HP/Compaq" architecture, Zander said during investment bank Bear Stearns' 13th annual technology conference.

The 55-year-old, who plans to depart Sun in July after 25 years with the hardware company, took plenty of swipes at the competition during his remarks -- especially at IBM and HP/Compaq.

"I think when customers got a look at HP/Compaq's (post-merger) roadmap -- if you're a Compaq customer, you're really screwed," Zander said.

"We've been called in to give more presentations to HP customers" during the past 30 days. "Clearly, some of the customers I saw were looking for alternatives."

To be fair, the Brooklyn-native continued, "we don't take HP/Compaq lightly. They have a lot of financial muscle." But take away the company's printer business and PC business, "and what's left is as much or less than we have. But we're not taking them lightly."

In keeping with Sun's tradition of publicly mocking its competition, Zander certainly hit his marks during the question-and-answer discussion in front of an investment audience.

In so doing, he managed to keep some of the discussion away from Sun's own troubles, namely three straight quarters in the red for a company that sold heavily into the dot-com explosion of the late 1990s, and then got pulled down in the shakeout.

During its most recent quarter ending March 31st, the company reported a net loss of $37 million on $3.1 billion in revenues.

Throughout his remarks at the Grand Hyatt Thursday, Zander stuck to the company's pledge to return to profitability this quarter, namely by returning to its historical business model (away from the start-up sector), and carving new market share while its traditional base in telecommunications and financial services absorbs its IT glut.

"One of the things we have to do is shift very quickly into new geographies such as retail, health care and biotechnology in terms of balancing our portfolio," Zander said, while acknowledging that the moves mean going head-to-head with IBM's share of those enterprise markets. The reality may help explain his swipes at Big Blue.

"The fact is, the integrators are growing faster than IBM's global services (division) right now."

Zander also defended the company's embrace of Linux and open source operating systems, even though analysts have dubbed it somewhat of a laggard in the movement.

"We have to embrace Linux, we are. All of our middleware and software runs on Linux. We donate to the open source community. Our office is open-sourced, our tools are open-sourced." Plus, later this summer the company will unveil a full double-processor Sun/Linux server.

But at the same time, he reminded the audience that Linux, like its own Solaris server lines, like Red Hat's Linux, even Apple's Macintosh operating system, are all Unix (operating system) derivatives. "So clearly, there's marketing going on here," he said.

On his departure from Sun, Zander said he's confident the transition will run smoothly.

"Since Scott [McNealy, Sun's CEO] is the soul and inspiration for Sun, there wasn't much left for me after 4 or 5 years into this job. I knew where I was going. I have several months to transition, some sales calls to make, then I'm going to take some time off and go figure out what I want to do."

To be sure, Zander does not have an empty plate in the high-tech sector. He is currently a board member of Netezza Corp., a Framingham, Mass.-based start-up that makes business intelligence appliances and software.