Sun Microsystems' roots in the capital markets sector go deep. Back in the late 1980s, Sun technology helped revolutionize the trading floor, and, by the late 1990s, the company's high-performance systems and expertise in networking made it the platform of choice for dot-com innovation.

But as the dot-com bubble burst and firms reined in spending, new technology paradigms emerged, and Sun found its systems tagged "expensive" and "proprietary." Countering those claims is one of the aims of its campaign to "win back" Wall Street.

The company responded initially by launching low-cost servers running Linux. It also radically overhauled its software pricing model, forging its standalone middleware products into a single offering, the Java Enterprise System, which is delivered quarterly on a flexible, pay-as-you-go basis and priced at $100 per user per year. Sun was shifting from a hardware-based supply model to one based on infrastructure solutions. By 2004, it was ready to begin reclaiming the market.

In 2004 the company rolled out new servers powered by UltraSPARC and AMD Opteron processors running users' choice of operating system (Solaris 10, Solaris OS x86 Platform, or Linux). All of them deliver industry-leading throughput and excellent price-performance ratios. And, to underscore its message of change, Sun is opening up the source code of its flagship OS, Solaris.

These efforts have not gone unnoticed. In December, the company garnered a top award for its server solution from Waters magazine, one of the bibles of the global financial community. "Sun stormed back onto Wall Street this year with a raft of new service lines and products," the magazine noted. The company's "smart offerings ... make it a no-brainer for our Best Server category. Sun is back, and the competition should run for shade."

Over the past several months, Sun has also rolled out a series of events designed to showcase its offerings and strategy to existing and prospective customers: In September, 48 Hours on Wall Street took the message to CIOs in New York City. Customers participating in the event included the Tokyo Stock Exchange, the Philadelphia Stock Exchange, Archipelago, and the Spanish MEFF, which have all opted to run their operations on Sun. Also highlighted was the functionality that market providers such as Thomson and SunGard have added on the basis of the latest Sun technology. Two months later, 36 Hours in the City brought the story to London. April will see a similar event in Chicago—24 Hours on La Salle—and another event is planned for the San Francisco Bay Area.

Fostering Innovation

Sun has thrown its weight behind a variety of initiatives to facilitate the adoption of its product set. For example, it has been working with customers to tune in-house applications to run on AMD Opteron-based processors running the Solaris 10 OS—often with stunning performance improvements. The prospect of improved performance combined with lower cost of ownership has also prompted many of the specialists within Sun's independent software vendor (ISV) ecosystem to port their solutions to the new platforms. Transact Tools, for example, has achieved stellar performance with an application that manages Financial Information eXchange (FIX) network traffic. Other initiatives center on solutions to help address business issues such as risk management and the stringent compliance requirements of today's regulatory environment.

As it builds a new-look strategic sales operation, Sun is keen to foster innovation in areas of the market ripe for automation. In the post-trade, pre-settlement space, which remains a bastion of fax- and telex-based communications, Sun is investing in the pilot test of an online solution that will allow custodians to reach an agreement on interest rate claims for trades that fail to settle because of data discrepancies. The project, which involves Sun's ISV partners Metatomix and Incorporate, has attracted the attention of the International Securities Association for Institutional Trade Communications (ISITC), a body committed to promoting straight-through processing.

Among other market initiatives, in September Sun joined forces with other partners to launch the Java Payments Network (JPN), a collaborative venture through which banks and technology firms can share information and technology developments to improve interoperability, performance, and reliability—and in the process reduce project costs and risk for end users. Sun has also become a premium member of Financial Information eXchange (FIX) Protocol Ltd., the body that is furthering FIX, and is focusing on the development of Web services that can contribute to that standard's development.

In the first six months of its revitalized focus on the capital markets sector, Sun has proved beyond a doubt it is still the one to beat in the high-performance computing stakes. Working with partners, it is developing a range of new infrastructure solutions that help firms better align IT with the business. Some 50 proofs of concept are now in the pipeline, which Sun hopes will both underscore its ability to facilitate innovation and confirm the strength and viability of its solutions-oriented business model.