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BusinessWeek: Sun's Tolliver: "It's Brutally Competitive"

Oct 25, 2002, 15:25 (1 Talkback[s])

Sun has only recently made fundamental changes in its business model. It's now selling servers with the Linux operating system -- which programmers love because it isn't owned by any one software maker, the way Microsoft owns Windows, and can be easily manipulated and customized. Sun is also trying to sell more services, storage equipment, even hardware that runs on Intel processors. What's the strategy? On Oct. 21, BusinessWeek Online Reporter David Shook spoke with Mark Tolliver, Sun's chief strategic officer, about the turnaround efforts under way. Here are edited excerpts from their conversation:

Q: What is Sun's biggest challenge, the economy or the competition? A: Certainly, the economic situation and, specifically, telecommunications. Telecom is our largest market, and buying has slowed dramatically. We supply a greater proportion of that industry's computer needs than for any other industry, particularly in the U.S. That industry buys everything from our smallest to largest servers, data storage, software, and services.

The situation in the telecom market is a primary reason Sun's revenues have been under pressure over the last four quarters. Plus, our second-largest customer is the financial-services industry, which, likewise has contracted, although not to such a large extent.

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