Sun denies services mega-buy rumour

Sun Microsystems has denied allegations that it must hit the acquisition trail to plug its services gap, writes Jonathan Lambeth.

Analysts remain doubtful that Sun?s services offerings can keep up with the rapid growth in sales of its servers, however.

?Sun does not have anything like the services in-house it will require. Ultimately, it will be constrained on sales of hardware. It will have to decide whether it is going to have a full services business or not go that route,? said Jane Doorly, vice president and director of research at Dataquest.

Recent speculation has suggested that Sun might be forced into making a mega-acquisition to plug the gap.

Talking exclusively to VNU Newswire, Sun?s UK managing director Robert Youngjohns said he found potential customers were generally surprised about the extent of Sun?s offerings.

?The problem is we have all the basics but we don?t merchandise them very well. Behind all the glitz of Java and smart cards beats the heart of a very dull company,? he joked.

Youngjohns said the services operation faced no restraints on new recruitment, and had grown into the biggest part of the company in the UK. He added that Sun was not having trouble hiring service engineers, particularly as Digital was currently a good source of defectors.

Doorly said the company would have to decide if an acquisition was necessary and then do it quickly.

Youngjohns insisted, however, that major takeovers were not part of the Sun culture, and it would continue to acquire niche companies that filled a gap.

?Acquisitions bring the potential for big conflict. The partnering model is very clear for Sun. Any change in that would be a pretty fundamental shift in strategy,? he said.

He added that Sun?s server products will become more competitively priced this year.

?The Sun Microsystems year 2000 compliance group blocked the launch of three of the company?s products in the last 10 months because they were not compliant.

Sun?s year 2000 policy states that the company will issue upgrades for products launched after 1 January 1995.

The compliance status of hundreds of Sun products ? some dating back over 10 years ? are listed on Sun?s year 2000 Web site.

Tony Hampel, director of Sun?s year 2000 programme, admitted that Sun will probably fail in its bid to make all its in-house products ? 700 of them ? year 2000 compliant by the end of 1998.

? Report by VNU Newswire