Sun CEO and President Jonathan Schwartz characterizes Q1FY09 as "...a tough quarter for Sun and our customers - but we're emboldened by the progress we made in our emerging markets and technology areas, investments we plan on amplifying and accelerating." His thoughts on the quarter are contained in the latest installment of Jonathan\'s Blog. An Audiocast of Sun\'s Q1FY09 Earnings Release Conference Call is available here.

Schwartz concedes a 7% decline year over year in corporate revenue, citing the impact of the credit crisis on customers for Sun's high-end solutions among financial services companies in particular. At the same time, Schwartz was optimistic over the growth in demand for the ZFS-based OpenStorage products, which exceeded 100%.

The 80% growth rate in Solaris-based chip multi-threading systems and the 150+% growth rate in Open Storage systems were noteworthy. Schwartz alerted readers to a scheduled Open Storage launch event set for November 10. The rate of adoptions of MySQL, Java and the Solaris OS were also positive in Schwartz's view.

The picture was not quite as bright for Sun's enterprise systems, Schwartz reported, which declined year over year. This segment is not sensitive to open source innovations, he continued, in that sales are chiefly to customers who are scaling up existing Solaris applications. Still, Sun and Fujitsu continue to invest in the mainframe market, confident that the demand will more than sustain the effort.

While high-end storage systems grew in volume, the tape sector dropped off.

Schwartz, citing comments by Sun CFO Mike Lehman, attributed declines in the quarter to such forces as "...the lull in very high end systems, along with discounting and component pricing depressed gross margins. In addition, we went through a series of product transition related expenses this quarter we do not expect to recur, that depressed margins by around 2 percentage points."

Schwartz also explained, once again, Sun's open source software offerings, noting how adopters of open source solutions frequently opt for enterprise grade features and support for maintenance and mission-critical operations. Linking software to support contracts is part of the key to the success in this segment, he said.

Sun's two-fold focus continues to be on "creating the world's largest, and fastest growing developer communities - for whom we build the products, services and technologies on which they'll build their products and services.... Secondly, we deliver compelling commercial offers to those deploying applications - across a diversity of industries - through commercial subscription, services and optimized system products," Schwartz said. In a word (or two) datacenter systems, software and services.

"Sun's positioned very well to supply the platforms on which the next generation of clouds will be built," he commented.

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