Fujitsu Forms Unix Server Alliance with Sun Microsystems

Fujitsu said the company has formed a strategic alliance with Sun Microsystems (Nasdaq: JAVA) in the Unix server business to minimize its exposure to this segment amid the ongoing shift to Linux servers.

IDC Japan, a privately-held research firm, recently forecast that domestic sales of Linux servers will account for 15.6 percent, by volume, of total domestic server sales in 2007. In the nine months to Dec 2003, Linux servers accounted for only 8.4 percent of total domestic server sales.

"If we continue the (Unix) server business under the current form, we may face a major deadlock," Fujitsu senior managing director Junji Maeyama said at a news conference. "As development costs of processors (for Unix servers) are ballooning, we may eventually lose competitiveness. This is why we decided on an alliance with Sun," he added.

Earlier, Fujitsu and Sun said they would jointly develop next-generation Solaris and Sparc-based systems, currently one of the most popular Unix server groups, and release the first product of this line in mid-2006.

Advanced Product Line

Codenamed the Advanced Product Line (APL), it will run the world's leading enterprise-class operating system, Solaris, the Java Enterprise System and virtually every major enterprise application. When complete, the APL will replace Sun's and Fujitsu's existing Sun Fire and Primepower product lines, respectively. Customers will benefit from safe and seamless binary compatibility along the Sparc roadmap, according to the joint statement.

"In theory, by sharing the development costs, we can cut such costs by half (from the current level)," Maeyama said to stress the merit of the latest alliance with Sun.

Growing Wariness

But behind the decision is growing wariness about the future prospects of Unix servers, as companies and banks are gradually leaning towards adopting Linux servers for their mission-critical systems, according to analysts.

"I do not think a major shift to Linux servers from Unix servers will take place in the mission-critical system segment immediately," Maeyama said, but added: "We can never know what will happen in 10 years' time."

According to a recent report in the Nihon Keizai Shimbun, Fujitsu plans to invest some 20 billion yen to develop Linux servers, targeting global sales of around 1,000 units in fiscal 2005, and sales of 100 billion yen in fiscal 2006.