Scott McNealy stepped down as chief executive of Sun Microsystems last week, after the latest in a succession of quarterly losses at the company cast further doubt over the long-term viability of its business model.
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Sun's recent policy has been to discount software to sell more hardware. Existing users have benefited from the availability of software such as Sun's Java Composite Application Platform Suite, a low cost version of the high-end Seebeyond Integrated Composite Application Network middleware.
However, attractive licensing has failed to bolster server sales, and analyst firm Gartner has estimated that Sun has just 4.2% market share.
McNealy stepped aside as the firm posted third-quarter losses of £120m. His replacement is Jonathan Schwartz, who was previously chief operating officer.
David Mitchell, software practice leader at analyst firm Ovum, said, "Sun's entire software portfolio needs a significant overhaul that has to involve a good deal of divestment."
According to Gartner, Sun has been losing market share. Prelimary findings for the first quarter of 2006 show the global server market grew 13.7% year on year, with shipments of nearly two million units.
Hewlett-Packard maintained its position as market leader, followed by Dell and IBM. However, Sun only grew 6%.
Phil Dawson, vice-president of enterprise systems at Gartner, welcomed Sun's strategy to give away software, but questioned whether the strategy was working. "It is a novel licensing scheme but Sun must deliver volume sales," he said.