The company's worldwide real estate portfolio totals 12.8million square feet of office, laboratory and manufacturingfacilities, including 8.8 million square feet of leased space. Inearly 2006, the company had a 16.2-million-square-foot portfolio,including 8.9 million square feet of leased space. The company's USportfolio totals 8.2 million square feet, including 5.2 millionsquare feet of leased space. In the Silicon Valley, where thecompany is headquartered, it owns approximately two million squarefeet.

|

In mid-2006, two weeks after GlobeSt.com reported that its1.4-million-sf campus in Newark, CA, was on the market,Sun Micro revealed it would shed up to 5,000 jobs by the end of theyear as part of a plan to curtail four years of declining revenue.A couple of months later BioMed Realty Trust paid $215 million forthe campus, which came with excess land for another 400,000 squarefeet of built space, and recast it as a home for life sciencetenants.

|

The sale agreement included a cancellable 18-month leaseback bySun at $13 per square feet per year, triple net, to allow for theorderly relocation of employees to other Bay Area locations,including its 816,000-square-foot headquarters campus in SantaClara--now 928,400 square feet--and a one-million-square-footcampus in Menlo Park.

|

During fiscal 2008, the company entered into a sale-leasebacktransaction for its Louisville, CO, facility. At the start offiscal 2007, in addition to the sale-leaseback with BioMed Realty,the company entered into a sale-leaseback for its Burlington, MA,campus. The total reduction in owned square footage as a result ofthe three transactions was approximately 3.8 million squarefeet.

|

In its annual report, filed with the SEC 90 days ago, thecompany said it has 2.2 million square feet of owned space that itis not utilizing for its operations. Approximately 1.2 millionsquare feet of the total is vacant and the remainder is subleasedto non-Sun businesses.

|

Substantially all of the company's facilities are used jointlyby its product groups, services groups, global sales and servicesorganization and other functions. Its manufacturing facilities arelocated in Ponce, Puerto Rico (83,000 square feet); Linlithgow,Scotland (440,000 square feet); and Beaverton, Oregon (squarefootage not available).

|

Sun Micro's share price has struggled since 2000, when it stoodin the $60 range. Today, shares trade in the low-to-mid singledigits. In afternoon trading Friday, shares stood at $4.17, up$0.10 on the day. One year ago, the company's share price stood at$21.60.

|

"Today, we have taken decisive actions to align Sun's businesswith global economic realities and accelerate our delivery of keyopen source platform innovations--from MySQL to Sun's latest OpenStorage offerings," explains Schwartz in a statement announcing thelayoffs and the company restructuring.

|

The company expects to spend $500 million to $600 million overthe next several quarters in cash severance costs. When thereduction is complete, in late 2009, the company says the annualcost savings will range from $700 million to $800 million.

|

As part of the restructuring, Sun will condense into threeunits: the systems platforms group (Solaris operating system, thevirtualization hypervisors xVM and VirtualBox and various systemsmanagement software, and Sun's server and storage lines); theapplication platform software group (Java, MySQL, GlassFish, otheropen source middleware products, and Sun's learning servicestraining organization); and the cloud computing and developerplatforms group (Network.com, the NetBeans developer tools and theStarOffice office automation suite). In addition, its marketingoperation will integrated directly into each product group.

|

"Sun's new organizational alignment is recognition of thecomprehensive role software plays in the company's growthstrategy," the company says. "Sun creates...platforms on which todevelop applications (Application Platform Software),...platformsto run those applications (Systems Platforms) and is taking thenext step to enabling infrastructure as a service through 'cloudplatforms' (Cloud Computing & Developer Platforms)."

Want to continue reading?
Become a Free ALM Digital Reader.

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications
NOT FOR REPRINT

© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.