Now is the winter of our discontent made glorious by Vietnam?

Sunday 16th November 2008
Sun Linlithgow employees Fraser Arnot, Chris Beamish and Scott Poole, represented Great Britain at the World Championship Sprint Triathlon

Sun Microsystems could not confirm yesterday whether the 900 jobs at its Linlithgow server plant were under threat, after announcing 6,000 job losses worldwide, an 18% cut of its workforce as analysts urge it to 20%. The Linlithgow plant employs 600 full-time staff, plus 300 contractors, but the UK Sun website as yet carries no press releases for November.

But Sun Microsystems and BT Frontline have  officially launched Sun Vietnam (right),  with the opening of its first Hanoi office on 12 November.

The joint venture was  set up to take advantage of Vietnam’s rapaidly growing interest and demand for enterprise-class IT services and solutions.

Gan Boon San, president of Asia South, Sun Microsystems said Vietnam has been one of the key growth drivers in Asia Pacific for Sun. “While we are celebrating the opening of Sun Vietnam, we have been investing and developing talent in Vietnam for years. Today, we have more than 17,000 developers from Vietnam signed onto the Sun Developer Network,” he said.

Sun has reorganised its software division into three new business groups, in an attempt to better focus on higher-growth segments of the corporate computing market. These are the systems platforms group (Solaris operating system, the virtualization hypervisors xVM and VirtualBox and various systems management software, and Sun's server and storage lines); the application platform software group (Java, MySQL, GlassFish, other open source middleware products, and Sun's learning services training organization); and the cloud computing and developer platforms group (, the NetBeans developer tools and the StarOffice office automation suite).

In addition, its marketing operation will integrated directly into each product group. Its  software executive VP Rich Green is expected to leave, and the firm expects staff cuts  to save between $700m-$800m yearly.

Analyst with Sanford Bernstein, Toni Sacconaghi, noted in a circular on Friday that Sun could raise its margins by 7% and earnings by $1/share if it  cut 20% of its workforce adding Sun may need to sell a controlling stake to right the business.

Sun servers and software helped stimulate the internet boom, and its engineering acumen is revered. But the company battled to recover from the dotcom meltdown, say some analysts, and it has been overtaken by big shifts in the way businesses buy  back-end computers.

Intel and National Semiconductor have reported falling sales while Cisco said this quarter's sales may be weak. Sun, the fourth-largest server maker, could lose more than competitors as Wall Street customers slash tech spending, having battled a slow decline in server sales for years.  Sun already cut jobs in May and said more cuts were likely after a $1.6bn first-quarter loss, its second time in the red in three quarters.

Analysts at Gartner said Sun's share of the server market was 11.8% in the 2Q against 13.6% at the end of the year and its stock has fallen 80% this year.


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