The warning comes after Sun announced it was dropping development of two of its forthcoming Ultrasparc processors - Gemini and Millennium. Gemini was expected to run network-facing and web-intensive applications, and Millennium was being designed for computing-intensive applications.
Sun has suffered from Dell and Intel introducing commodity computing into more powerful systems as well as increasing price pressure from larger suppliers of high-end systems such as IBM and Hewlett-Packard.
Gartner said Sun would reduce its engineering design department of 1,600 staff by 20% and reallocate resources from the cancelled project. The decision was made to cancel the two systems because of financial constraints and to reduce the number of development projects, according to Gartner.
Sun users should demand details of the company's product plans, Gartner said.