(Nikkei BP Group)
(No.1 High-Tech News Site in Japanese)
| [Industry Forecast '99] Demand for High-End Servers to Grow: Nihon Sun VP
January 8, 1999 (TOKYO) -- BizTech interviewed Toshiaki Sugawara, vice
president and representative director of Nihon Sun Microsystems KK, about the
company's 1998 business results and 1999 targets.
|According to Sugawara's forecast for the 1999 economy, the total economy is
still in the doldrums, but Nihon Sun Microsystems' products, including
servers, will show an upward trend.
BizTech: How was the year 1998 for Nihon Sun Microsystems?
Sugawara: Last year the Japanese economy was sluggish, but
we could do good work. Especially, since the beginning of the last half,
orders for the UNIX server products such as the "Sun Enterprise 6500" and
"Sun Enterprise 5500" have increased sharply. In keeping step with the
growing demand for server products, orders for storage products have
As a result, we could attain two-digit growth in revenue in 1998.
BizTech: In 1998, investment cooled in the manufacturing and
communications carrier industries. What do you think boosted the demand for
Sugawara: It's true that none of the leading domestic manufacturers
have increased their revenue. This is the case with other industries. In any
industry the customer requests have been varied and exacting in various
aspects. As one of the countermeasures, investments in information systems
will be much more important in the future. We've succeeded in expanding
demand for servers because we were able to satisfy such customer needs, I
BizTech: Do you mean that you have succeeded in increasing sales to
Sugawara: Yes, we've increased sales to all industries. It's
regrettable to say that we can't announce the figures of sales in Japan due
to our headquarters' management policy.
For your information, the manufacturing industry has accounted for the
highest ratio of our total sales, followed by banks, communications,
distribution, public utilities and education/laboratories. This order has not
changed for the past several years.
BizTech: What trends were seen in customer orders for products during
the past year?
Sugawara: The growth of large-scale server products. We've received
orders, favorably and increasingly, for medium- and large-scale models such
as the "Sun Enterprise 6500" and "Sun Enterprise 5500."
And besides, we are receiving so many orders for the ultra-large-scale model
"Sun Ultra Enterprise 10000" that we are afraid production will fail to catch
up with the orders. It is something we never experienced till several years
ago that high-end servers sell tremendously like this.
Watching such a market situation, we've seen since the beginning of 1998 that
replacement demand for mainframes with UNIX servers is finally picking up.
We hear that some sources say the domestic mainframe market is bottoming out,
but we expect it to decline continuously in 1999.
Especially now, some users plan to use a large-scale UNIX server to build a
system in a scale that could not be built even with a mainframe in the past.
We feel there are users who are uninstalling their mainframes partially due
to the economic slump.
BizTech: Do you believe that the same trends of 1998 will continue in
Sugawara: Yes, we forecast that demand for high-end server products
will grow continuously for the time being.
And, we may expect to see signs of an economic recovery in the last half of
1999. We were in a severe environment in 1998. The difficulty will continue
until the beginning of 1999, but I believe we will be able to see the 'dawn'
in the last half of the year. If my forecast is true, we can expect a further
BizTech: I'd like to say congratulations on the expansion of your
server business. How are desktop models doing?
Sugawara: The desktop models are growing in shipped units, but are
falling in unit price. So growth in value terms is not as large as the server
For the desktop models, we plan to reduce the product costs and lower the
prices further in the future. We have so far provided high-end desktop models
used for desktop publishing, computer-aided design and similar applications.
In addition, we'll market low-priced desktop models in the future such as a
BizTech: What percentages do the server and desktop products make up
of total sales?
Sugawara: Our fiscal year begins in July. So, just half a year has
passed since the 1998 fiscal year began. We can't make a detailed report on
the outlook value of FY98 (July 1998 through June 1999) at this stage. I
assume the sales ratio of servers to desktops will be about 6:4 in FY98.
Until FY97, the ratio of servers to desktops was 4:6. This means the ratio
will be reversed in FY98.
BizTech: U.S.-based Sun Microsystems Inc. acquired U.S.-based
NetDynamics Inc. in 1998, and has been expanding the system integration
business. Do you plan to push the SI business in Japan, too?
Sugawara: Nihon Sun Microsystems has made it the prime business policy
to avoid competing with domestic SI partners. This is also the policy of Sun
Microsystems in the United States, and Nihon Sun Microsystems will not change
this business policy.
So, currently we have no plan to penetrate such businesses and compete with
our SI partners. Regarding our business policy on NetDynamics, we intend to
air it in early 1999.
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Clic k here for more New Year features.
(BizTech News Dept.)
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