Sun Slashes Mid- and High-End Server Prices

By Brian Proffitt

In anticipation of new product releases, Sun is slashing prices for three UltraSPARC servers by up to 16 percent.

Prices for Sun Microsystem’s Enterprise 3500, 6500, and 10000 UltraSPARC II
servers will be cut up to 16 percent, according to an announcement made by the
company Tuesday.

The cuts are being made in conjunction with the release of new UltraSPARC III
systems, company officials said.

In an interview with Reuters, Sun’s Vice President of Product Marketing and
Stategic Planning Shahin Khan emphasized that this price cut was not a direct
response to market conditions.

“This is not a reflection of what we see in the market nor driven by what
we see in the market. This is really purely based on [what happens when] we
announce new products,” Khan told Reuters.

Regardless of the motivation, prices on mid-level Enterprise 3500-6500 servers,
are expected to be cut from 8 to 16 percent. Enterprise 10000 servers will see
price drops up to 16 percent.

Sun has seen sales fall-offs over recent weeks. Analysts point to the weakening
tech market, coupled to the usual “wait for the new product” effect
that typically plagues corporations with short development life-cycles for their
products.

Sun will release its first quarter earnings report this Thursday, April 19.
The company has remained silent on expected earnings since a late February earnings
warning.