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Sun execs still upbeat about long-term growth

Executives at the company's annual analyst meeting warn against reading too much into the current economic downturn.

January was a bad month for Sun Microsystems and just about everyone else in the technology sector, executives said at the company's annual analyst meeting, but they warned against reading too much into the current downturn. mikelehmanmug

"January looks a lot like December," Michael Lehman, Sun's chief financial officer, said Tuesday at the San Francisco meeting. Demand for Sun products in the United States was down from earlier in the year, Lehman explained, but the situation was somewhat better outside the United States.

U.S. companies appear as if they're holding their breaths, Sun executives said, waiting out an economic slowdown before they begin moving ahead on capital expenditures.

"What I've seen is the telecom section and large corporations that are holding" back, said Sun President Ed Zander. "In most cases, they're holding capital purchases but are very bullish on Sun.

edzandermug "It's not a price game. We've got a lot of customers who like what we're doing. It's just a question of whether they want to spend the capital."

CEO Scott McNealy also weighed in with characteristic bluntness, blaming an oversized federal government for some of the economic slowdown and the California energy crisis. He threw in a jab at Federal Reserve Chairman Alan Greenspan for "being in a coma" and raising interest rates at the "wrong time."

Despite the domestic economic woes, Sun executives feel good enough about the company's prospects to offer growth projections.

Sun will see 20 percent to 30 percent annual growth over the next two to three years, which would double its current business, Lehman said in a presentation.

"My personal view is that the absolute numbers in the next couple of quarters don't matter, because no one knows what they're going to be," Lehman said. In the long term, "We feel extremely good about our vision and our ability. We have confidence in our ability to execute."

Sun's growth expectations hinge on a number of new products, including workstations and servers based on its relatively new UltraSparc III chip, its WebTop software for hosted services, its server appliances, and the iPlanet Web services venture with America Online.

Sun also recently announced its new Sun Open Net Environment Web services bundle.