Sun may be emerging from cloud

But Adam Mendoza, Sun's director of strategic alliances for network storage, said the contract length is not a great burden, given that setting up a high-end array can take a couple of weeks and that companies typically expect to hold on to storage gear for more than three years. "This is actually very practical in terms of a time-frame commitment," he said.

In any event, Sun's pitch isn't meaningful yet to all customers. Joe Fuller, chief technical officer for Trader Electronic Media, is a Sun customer with far less than 30 terabytes. That threshold "would pretty much take us out of the running," he said, but "the idea is intriguing."

Sun hasn't forgotten customers like him, and intends to create similar pay-per-use programs for low-end and midrange environments.

Sun's storage division has been struggling, especially when it comes to midrange products. According to researcher IDC, Sun's revenue from external disk storage systems fell from $229m in the first quarter of 2003 to $227m in the first quarter of this year. Its market share slipped from 7 percent to 6.5 percent, according to IDC.

Mendoza admits that Sun's midrange storage products have not been strong. But he says the company is plugging that hole with an array due soon that incorporates technology from Sun's acquisition of Pirus Networks. The product, dubbed the StorEdge 6920, will have features such as the ability to make "snapshot" copies of data with minimal disruption to applications, Mendoza said.

That new system also was introduced by Sun last week at its conference in Shanghai, China. Not all critics, though, were won over by Sun's slew of news.

Michael West, another Saugatuck Technology analyst, suggested the services and storage pricing options are desperate, dubious moves.

"After many years of feeding off high-end financial niches and dot-com start-ups, Sun is now rooting around in the cellar for whatever it can find," he said. "We doubt these discount-warehouse prices are really the bargains that they appear on first sight, but until the details are forthcoming, we can only assume they are not."

But Fuller, for one, hasn't written off Sun completely. He's impressed by the amount of cash the company has in the bank, its spending on research and development and its recent products. "I'm not too concerned about their overall health," he said. "But I keep my eye on them."