Sun Snaps Back at HP

Sun Microsystems took some time to snipe back at
Hewlett-Packard Monday, responding to HP’s attempt last
week to turn perceived weakness on Sun’s part into an HP migration

On Friday, HP offered a “Linux lifeline to Sun customers” in the form of a
sales and service program intended to help Sun Solaris customers move to
Linux. The company said Sun customers who sign up for its plan will get a
combination of assessment, porting and migration services valued at about
$25,000, covering up to three applications the customer wants to move to an
HP ProLiant server running Linux. The customer would get use of the server
for up to 30 days for proof of concept testing, and the plan also includes
an HP StorageWorks storage area network assessment.

But Sun moved to poke holes in the plan Monday, calling the plan little
more than a “PR campaign” with “little substance, no real money and no
value proposition.”

“HP’s Enterprise Systems Division continues to lose money at an increasing
rate, and creating the illusion of buying business at $25,000 a pop is not
going to help improve its bottom line,” Sun said. “In addition, HP’s focus
today is clearly on PCs, printers and consumer products.”

Sun also noted that the offer is exclusive to Linux, and told HP customers
that raises questions about the company’s commitment to the HP-UX operating
system and Itanium-2.

Additionally, Sun said that customers interested in a Linux solution should
look to it first. “For those Sun customers wanting a Linux solution, Sun
offers the same industry standard Linux OSes as HP, but at lower cost —
making it the most cost-effective Linux x86 solution available today,” the
company said.

HP’s plan was a shot across the bows at Sun, and a response to Sun’s own
‘HP Away’ program, launched in
in an effort to take away HP customers faced with the prospect of
being forced to migrate from Alpha processors and the Tru64 operating
system to Itanium-based systems running HP-UX.

Sun’s HP Away program offers a two-week Alpha/Tru64 to Solaris OS migration
assessment service. If the customer decides not to proceed with the Tru64
to Solaris migration, Sun absorbs the cost of the assessment. The company
also offers to defer payment for the entire migration — including Sun
services, servers and software — until completion of the engagement, up to
90 days. And if the customer goes with the deal, Sun offers to take care of
the application porting through its professional services group in concert
with its ISV partners, systems administrators and Sun’s iForce centers.

HP’s offer also sought to play on Sun’s perceived weakness, coming on the
same week the once high-flying systems vendor warned that it would run a
loss of between 7 cents and 10 cents per share in the most recent quarter,
a significantly higher loss than the roughly 2 cents per share loss
analysts were anticipating. To compound its woes, Merrill Lynch technology
analyst Steven Milunovich, in an open letter/research note on Thursday, urged
to slash as much as 15 percent of its workforce and focus on being
a niche player in mission-critical computing or risk being acquired — or

“Sun’s HP Away is a substantial program with a real value proposition to
solve the problems, issues and headaches caused by HP abandoning its
installed base,” said Larry Singer, Sun’s senior vice president, global
market strategies. “This is a last gasp effort by HP to show they are still
serious about the enterprise, and not just a consumer products company.”

For his part, Illuminata analyst Gordon Haff, responding to HP’s plan on
Friday, said these sorts of programs are typical.

“This is really the type of thing that companies do all the time. They see
a competitor who has a weakness and they go after it,” he said.

Haff also noted that discounting is a day-to-day reality in the industry,
and customers looking to switch can often negotiate the sorts of discounts
that these plans offer — even if no such plan is on the table.

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