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Some Customers Are Sticking With Sun

IBM and HP have been crowing about how they have been luring away customers from Sun Microsystems, but they haven't pitched a shut out. Some loyal Sun customers are hanging in there in the hopes Oracle will make something of the battered firm.

At an investor's conference this week in New York, Roy Vallee, chairman and CEO of electronics distributor Avnet said executives are delaying replacing older servers in their datacenters for as long as possible, with Sun being delayed the most because customers want to see what Oracle (NASDAQ: ORCL) will do once it finally gets regulatory approval to close the purchase of Sun (NASDAQ: JAVA).

"Customers are wondering what the product roadmaps are going to be and if they commit new capital, are they confident where Oracle is going to take the company post-acquisition. So I think there's going to be a little bit of pent-up demand in the server space," he told the audience. His comments were Webcast as well.

Avnet distributes servers and other technologies, and he was commenting on the tendency of companies to stretch out the lifespan of their servers for as long as possible. He said Asia/Pacific was picking up the fastest of the global markets, followed by the U.S. He was not ready to say Europe had hit bottom yet.

Oracle is starting to make moves it hopes will maintain the loyalty of current Sun customers and even win some new ones. Over the weekend, Oracle announced plans to introduce a new product this week. Oracle said it plans to unveil "the world's first OLTP Database machine with Sun FlashFire Technology."

The Tuesday Webcast will feature Oracle CEO Larry Ellison and Sun Executive Vice President John Fowler.

"Don't miss this opportunity to learn firsthand how the partnership between Oracle and Sun can benefit your business now and in the future," says an invitation to join the Webcast.

The news comes at a good time for Sun, which has been in a state of flux for months. Its sales hit the skids along with the rest of the economy, then came the aborted merger attempt with IBM (NYSE: IBM) before finally it found a suitor in Oracle.

The deal has dragged on painfully long, more than five months now, as first the U.S. Department of Justice examined it carefully and now the European Commission has opened what could be a four month investigation, stemming from Sun's ownership of MySQL.

In the mean time, IBM has been unbridled in its attempts to steal away Sun customers, boasting of the number that are coming to IBM and asking for help migrating. HP and Dell have also made efforts to steal Sun customers as well.

The most recent data from IDC shows Sun's revenue from server sales fell 37 percent in the second quarter over the same quarter a year earlier. Overall, the server industry dropped 30 percent.

Bill Calderwood, president of The Root Group, a Sun reseller in Boulder, Colo., said he attended an Avnet function a month ago and there were no signs of discontent or impatience and people were still positive on the company.

"Some see it as a very good story for Oracle, but if they don't execute on it, then that could be bad news," he told InternetNews.com. "But I think for now they are giving them the benefit of the doubt until they see otherwise. The largest customers feel Sun has over the years provided some innovation and has some technologies that are leading the market."

He has heard of some larger end-users putting a freeze on purchasing any more Sun equipment until they see what Oracle is going to do, but until then, they aren't going to bail on Sun. They will just wait.

Next page: Contradicting IBM's claims