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Rivals IBM, Sun land big contracts

Big Blue and Sun Microsystems, fighting for the same buyers as the server market shrinks, each win multimillion-dollar contracts with retail customers.

IBM and Sun Microsystems, fighting for the same buyers as the server market shrinks, have each won multimillion-dollar contracts with retail customers.

In a deal one source placed in the tens of millions of dollars, IBM sold its newest z900 mainframes and its "Shark" storage systems to Wal-Mart, which will use the system to process credit and debit card transactions and manage inventory for its 4,000 stores.

Sun, which is billing its new Starcat server as a mainframe competitor, signed a deal with Ross Stores to manage corporate accounts, human resources and supplies.

Ross, which sells clothes and other merchandise through 438 stores, will use Sun Fire 6800 servers, 24-processor models a step below the top-end StarCat, and Sun's StorEdge T3 storage systems, according to Sun. The deal is valued in the millions of dollars.

In rosier days in the late 1990s, there was room for growth at both companies, with Sun selling computers for Internet operations and IBM trying to catch up to Sun's fast-spending customer base. But with the economic downturn, both companies are aggressively courting the same customers in a shrinking market.

Sun now faces layoffs as well as tougher competition. IBM, with its established customers and recurring revenue from service contracts, has weathered the economic downturn in better shape.

Sun is preparing to unveil an advertising campaign targeting IBM's complicated product line, arguing that Big Blue customers are forever locked into IBM reliance as soon as they pay the company to take over complicated operations.