The rating on Santa Clara, Calif.-based Sun Microsystems Inc. reflects the company's good, but not leading, position (based on all operating systems) in the highly competitive global server market, relatively narrow market base--particularly in comparison with major competitors--and inconsistent profitability. These factors are offset partially by moderate debt levels and strong liquidity. Although Sun has made consistent investment in new product development and has a significant base of relatively consistent service revenues, total revenue growth (excluding the impact of currency) remains a challenge. Revenues during the nine months ended March 31, 2008, totaled $10.1 billion, about flat compared with the same period in the previous year. The ability to achieve sustained, profitable revenue growth will, in part, depend on greater
