All is seemingly very healthy at Sun Microsystems Inc, which has just reported net profits for the year to June 30 up a staggering 71% at $190m on revenues that rose 31% to $3,221m. Half the company’s revenues are generated outside the US, with a rough 30/20 split between Europe and the Pacific Rim. The UK turned over UKP140m. The operating margin hit 10.7% in the fourth quarter, and revenue per employee increased by 20% to $258,000 in the year, a measure Sun rates as demonstrating its lean and hungry structure. Research and development spend for the year dropped to 11% from 12%. Sun boasts some $834m in cash, which it will be putting towards its expansion programme; the company wants to see indirect sales channels growing – these accounted for 42% of revenues at the end of 1991, up from 32% at the beginning of the year – as well as the continuation of its campaign to penetrate Eastern Europe. New subsidiaries have been established in Finland and Belgium in 1991 and new distributors appointed in Denmark and Norway. The company’s Scottish factory in Linlithgow, near Edinburgh, which turns out Sun’s highest volume desktop systems, has increased its staff numbers to 350 from 180 over the year. Sun prides itself on its healthy spread over different market sectors – leading the worldwide market for workstations and servers with 38% and 380,000 installations, according to Dataquest and International Data Corp figures, the company is also making moves on the high-end personal computer market, persuading customers that, even for administration staff, that little bit extra efficiency justifies spending UKP3,000 – with discount – on one of Sun’s entry-level monochrome workstations. Sun shipped 49,000 units in the fourth quarter, with the Sparcstation 2 accounting for the largest portion. The commercial, technical, and government and research markets each account for one third of Sun’s sales, the commercial market representing the best potential for future growth, said UK and Nordic vice-president Bill Passmore. Some half of commercial revenues come from the software engineering and database markets, helped by marketing alliances with companies such as Oracle Corp. The energy and utilities market, and the finance sector have proved strong areas for Sun, and Passmore predicts that the health sector, currently at an embrionic stage, is set to expand.
