Sun Microsystems has unleashed Solaris 9, the next version of its UNIX OS. This version is a major upgrade with more than 300 new features, most of which are aimed squarely at Windows. Unlike previous Solaris releases, however, Solaris 9 will run only on Sun Sparc-based hardware and won't work on Intel systems. The product's other big changes include an integrated application server that's part of the company's Sun Open Network Environment (ONE) product lineup and a surprising move toward Linux compatibility. The company's chief server competitor, IBM, has already embraced Linux and worked with the open-source community to ensure that Linux is compatible with IBM's hardware.

Solaris 9 couldn't arrive soon enough for troubled Sun, which during the past year has experienced almost $1 billion in losses and the departure of five senior executives, including former President Ed Zander. Despite rumors that the company's constantly changing Linux strategy was responsible for most of the executive turnover, the problem might be a bit more serious: With Linux available as a viable and low-cost UNIX-like competitor, Sun is seeing the open-source sensation erode more and more of its core business.

Many of Sun's customers are loyal, citing the stability and reliability of both Solaris and the company's server products. But the sticking point has always been cost, making Sun's decision to cancel an Intel-compatible Solaris version all the more confusing, especially because the company's upcoming Linux distribution is far from ready. Although Sun's servers have dropped in price throughout the years (prices start at $13,000 today compared to $27,000 5 years ago), they're still far more expensive than the competition. According to Forbes Magazine, IBM sells comparable hardware for about $7200; the average price of a Dell server is just $4800. It's hard to beat the so-called Lintel systems' economics of scale.

Still, the company now has a range of products, from the single-purpose, $1000 Linux-based Cobalt "blade" servers to its most popular line, the $30,000 Ultra Sparc-based Sun Fire V880 systems, and high-end Sun Fire Enterprise servers. Sun says it's well positioned for the future and expects to be on track financially by the end of the year.