Sun banks on growth in emerging markets

PUBLISHED : Tuesday, 17 June, 2008, 12:00am
UPDATED : Tuesday, 17 June, 2008, 12:00am

Amid a slowdown in information technology spending in the United States, Sun Microsystems is counting on steady growth on the mainland to help accelerate business expansion elsewhere through its newly formed emerging markets sales geography.

The US-based computer maker this month established the new geographic market, which includes Greater China, India, Latin America and southern and eastern Europe.

As part of its financial third-quarter results ended March, Sun reported impressive growth in emerging markets including 8 per cent year-on-year growth on the mainland, according to Peter Ryan, the recently appointed executive vice-president of Sun's global sales and services organisation.

'China is a very important market for Sun,' Mr Ryan said. 'The build-out of infrastructure in all its industries has helped us grow significantly in the market. Clearly, it is our challenge to make the right investments there.'

He noted that 'rapidly developing economies such as China have been some of the most assertive in embracing Sun's technology', which included open-source software, storage, server computers, enterprise applications and eco-friendly data centre solutions.

'With the formation of the emerging markets group, we'll be able to focus our resources, including investing in local education and training, to accelerate that growth,' he said.

Company revenues for its financial third quarter were US$3.27 billion, a decrease of 0.5 per cent from US$3.28 billion a year ago. 'The US economy presented Sun with significant challenges in the third quarter, masking our progress in developing nations and economies across the world,' said Sun chief executive Jonathan Schwartz.

Sun's emerging markets strategy comes months after the company secured a three-year deal with the mainland's Ministry of Education to collaborate in developing semiconductor engineering talent in the country.

Under the agreement, the department and Sun will help mainland universities develop their own textbooks, workshops and laboratory programmes based on the company's OpenSparc processor.

'We believe the co-operation will be beneficial in advancing China's teaching and research level in integrated circuits,' said Zhao Qinping, vice-minister at the department.

Sun hopes that by helping foster a generation of engineers, it would open up a huge market of developers for its OpenSparc chip architecture.