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Sun begins sales on Web

New workstations will be sold online and also manufactured by a Taiwanese firm to further cut costs.

Sun Microsystems (SUNW) has adopted online sales and overseas contract manufacturing, two key concepts from the PC arena, in its effort to make Unix workstations more competitive with workstations running the Windows NT operating system.

These two initiatives came to light with today's release of the Ultra 5 and Ultra 10, two relatively inexpensive workstations that mark Sun's renewed efforts in the low end of the market. Although historically strong in all pricing strata of the Unix workstation market, Sun, among others, has seen its share slip in recent years owing to the rise of low-cost Windows NT workstations from manufacturers such as Compaq.

Under a new service outlined today, customers can order the two new workstations from Sun Express, an online service contained on Sun's Web site, said Ed Zander, president of Sun Microsystems.

Although primarily designed for large customers and resellers, the site will be open to all potential customers, said Sun executives, and expanded to include products beyond the Ultra 5 and Ultra 10. The site will also be enhanced to allow customers to buy other hardware as well as software packages, said Anil Gadre, vice president of corporate marketing.

Through the site, Sun expects to cut transaction costs in acquisition and purchasing, he said.

Contract manufacturing is another new step for Sun. Both the Ultra 5 and Ultra 10 are being manufactured by a Taiwanese contract manufacturer, said Ken Okin, vice president and general manager, workstation products group at Sun.

Using an outside manufacturer reduces cost because overall production volume for large Taiwanese manufacturers is high. In addition, the Ultra 5 and Ultra 10 use standard low-cost PC parts, such as power supplies, rather than proprietary Sun parts.