Sun Microsystems needs more than cost cutting in 2008

Although Sun Microsystems, Inc. (NASDAQ: JAVA) is a leading global supplier of networked computing products, its recent history of profitability has seen its share of ups and downs. CEO Jonathan Schwartz, who is famous in the business world for his corporate blog, continues to bet the company's future on open-source software support and storage hardware.

It's working in some form, as the company reported $89 million in net income in its first fiscal quarter, starting its first string of four consecutive profitable quarters in more than 5 years.

Much of that is due to corporate belt-tightening more than gobbling up tons of sales and seeing results of strategy shifts after company co-founder Scott McNealy left the CEO position a few years ago. Still, sales have slowly gained steam as the company has ramped up its share of the computer server and storage business. It's been fast enough for most investors -- just not all.

To prop itself up in the markets, Sun performed a 1-for-4 reverse split back in December after a 16% price decline in 2007 alone. It's unclear if Sun can make enough money moving forward with the open-source strategy it now has with its Solaris software and Java software, and whether support on that software combined with hardware sales can make for future profit growth once cost cutting sees a slowdown.