Sun Microsystems is Number One Unix© Server Vendor in Third Quarter CY98, Also Posts Impressive Growth Rates in the Total Server Market

Sun Commands Strong Share of UNIX Server Market and Outpaces Compaq, H-P and IBM in Key Total-Market Categories, According to International Data Corporation.

PALO ALTO, California -- December 22, 1998 -- Building further momentum and widening its lead ahead of the competition, Sun Microsystems, Inc., today announced it continues to hold the number one position in the UNIX© server market for the third quarter of this calendar year (Q3 CY98), according to new data from Framingham, Mass.-based analyst firm International Data Corporation. IDC data indicate that Sun continues to be the number one UNIX server vendor, commanding 23 percent market share of UNIX server revenue and 25 percent market share of UNIX server shipments in Q3 CY98 (1). The latest data provide evidence that the award-winning Sun EnterpriseTM server family, running the robust Solaris Operating EnvironmentTM software and paired with the family of Sun StorEdgeTM disk arrays, is consistently winning and keeping satisfied customers who require highly scalable, available and reliable server solutions for the management of business-critical enterprise computing applications.

Sun continues to be one of the fastest growing server vendors in the industry, according to the latest IDC research. The company achieved nearly 40 percent higher revenue and shipments in Q3 CY98 than in the same period last year, and in the process outpaced its nearest rivals in both the UNIX and total (UNIX, Microsoft Windows NT and other platform) server markets. IDC identifies Sun as one of the fastest growing vendors in several important segments of the total server market for Q3 CY98, posting leading revenue and units increases in the high-end category (systems selling at $1 million and above), and fastest revenue increases in the midrange category (systems priced from $100,000 to $1 million). In the red-hot entry-level segment (systems under $100,000) of the total server market, Sun outpaced revenue and shipment growth rates posted by competitors Compaq/Digital Equipment Corporation, Hewlett-Packard and IBM.

After finishing 1997 as the year-end leader in UNIX shipments, Sun proceeded to command top spots in a variety of server market categories in the first half of 1998, including first place in UNIX server revenue and shipments (Q2 CY98) and first place in total-market midrange shipments (Q2 CY98) (2). Now in Q3, Sun's quarter-over-quarter growth (Q3 CY98 versus Q3 CY97) has exceeded increases posted by nearest rivals Compaq/DEC, H-P and IBM. For instance, IDC reports that Sun has shipped 54 percent more UNIX servers than runner-up H-P in the year to date.

Sun's server momentum continues to accelerate in all key UNIX market categories, due to its comprehensive family of servers that range in size from workgroup to departmental to data center-level systems. Sun maintained its number one position in the UNIX entry-level market this quarter, shoring up 26 percent share of revenue and 25 percent share of units. On the other end of the spectrum, Sun also earned first place in the UNIX high-end category this quarter, posting 54 percent quarter-over-quarter growth in revenue and 120 percent growth in shipments. This growth has earned Sun a leading 40 percent revenue share and 63 percent units share of the critical high-end UNIX space.

"As the IDC numbers illustrate, Sun is continuing to enjoy great success providing the most compatible, scalable and reliable line of business servers to the marketplace," said John Shoemaker, vice president and general manager of enterprise desktops and servers for Sun. "In today's economy, where competitive advantage is often a result of how well a company is able to leverage its IT infrastructure, it should come as no surprise that companies are selecting the highly available Sun Enterprise servers to provide continuous computing for their mission-critical business applications."

About the Sun Enterprise Server Family

The Sun Enterprise server family is a single, binary-compatible product line featuring a range of servers that scale from one to 64 processors and are designed for workgroup, departmental and data center computing environments. Sun Enterprise servers provide an ideal platform for a variety of applications, including enterprise resource planning, electronic commerce, data warehousing and customer management systems.

In addition to the high-end Sun Enterprise 10000 (also known as StarfireTM) server and the popular entry-level Sun Enterprise 450 workgroup server announced last year, Sun this year launched a new line of midrange servers. The powerful Sun Enterprise 3500-6500 midrange servers are the first in their class to offer data center-level RAS (reliability, availability, serviceability) capabilities with dynamic reconfiguration and alternate pathing for online repair and configuration, which minimize both planned and unplanned downtime.

The newest addition to the Sun Enterprise server family is the Sun Enterprise 250 workgroup server, announced in July of this year. The rack-ready Sun Enterprise 250 server delivers enterprise-class features in a cost-effective, dual-processor configuration.

About Sun Microsystems, Inc.

Since its inception in 1982, a singular vision, "The Network Is The ComputerTM" has propelled Sun Microsystems, Inc. (NASDAQ: SUNW), to its position as a leading provider of high quality hardware, software and services for establishing enterprise-wide intranets and expanding the power of the Internet. With more than $10 billion in annual revenues, Sun can be found in more than 150 countries and on the World Wide Web at http://www.sun.com.

(1) Source: "IDC Quarterly Server Tracker: Q3CY98," December 9, 1998, International Data Corporation, Framingham, Mass.

(2) Source: "IDC Quarterly Server Tracker, September 1998," International Data Corporation, Framingham, Mass.

Sun, the Sun logo, Sun Microsystems, Sun Enterprise, Starfire, Sun StorEdge, Solaris Operating Environment, "The Network Is The Computer," and HotJava are trademarks or registered trademarks of Sun Microsystems, Inc. in the United States and other countries. UNIX is a registered trademark in the United States and other countries, exclusively licensed through X/Open Company, Ltd.

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