Long time readers of this blog will know that I have high levels of skepticism around Sun's business plans. However, that's not a universally held view, and the news of the second round of cuts yesterday (part of the year long plan to shed about 5000 staff) drew some positive press:

Schwartz's promotion and the job cuts led UBS Warburg analyst Benjamin Reitzes to suggest on Thursday that Sun has the same ingredients for a turnaround that Xerox had earlier in the decade.

"Many aspects of the potential turnaround seem familiar," he said in a report. "Both have large, sticky customer bases, high market share, hidden assets, bloated cost structure and solid cash flow potential...We believe shares represent a compelling value."

I'm still skeptical, but a deep enough round of cuts could put them back on the positive side of the line. It remains to be seen whether this round will do that. It also remains to be seen whether they can, in the long run, afford the large software expenditures they are making for stuff they give away.

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