Sun is the only major company that builds an entire line of computers based exclusively on its own designs, its own chips, dubbed Sparc, and its own software, a version of the Unix operating system known as Solaris. As such, Sun stands alone as the "pure" alternative to the Wintel world-a moniker used to describe computers powered by Microsoft's software and Intel Corp.'s microprocessors. This strategy had been roundly criticized. Conventional wisdom suggested Sun's Unix market would be decimated by the software and chips of the Wintel alliance. That hasn't happened. Instead, Sun's exclusive focus on Unix has helped it gain market share. Sun has risen to third place among Silicon Valley companies, behind Hewlett-Packard Co. and Intel with nearly10 billion in annual revenues. It is competing on an equal footing with larger rivals HP, IBM and Compaq Computer Corp. on sales of high-powered computer systems to corporations. Sun edged out HP as the top seller of Unix servers for the first time in the most recent quarter, and that key portion of its business is growing at a faster rate than any of its competitors, according to market researcher Dataquest. Analysts sing Sun's praises. Merrill Lynch & Co. ranked Sun as the top computer maker in its latest "financial scorecard," a report that rates companies based on revenue per employee, revenue growth, operating margins and other financial data.Sun has capped the year with a couple of major victories. It won a preliminary court ruling with Microsoft over Sun's Java programming language; and it signed a major alliance with America Online Inc. that solidifies Sun's position as the leading supplier of equipment and technology to Internet service providers. Although these are heady times, Sun faces serious challenges. It launched a major initiative this year into a market where it has little experience-mass-market computing devices that hook up to the Internet. It remains the smallest of four d...
