Sun Microsystems, Inc. (JAVA) said that its new Sun Fire X4640 server based on the Six-Core AMD Opteron processor is better than the servers provided by International Business Machines (IBM), Hewlett-Packard (HPQ) and NEC Express.

The new server helps customers increase data center efficiency and helps virtualization and consolidation. Sun’s newly launched server lines, particularly the x86 group, are performing better than expected and will lead to an improvement in the financial position of the company.

The company said that its Sun Fire X4640 server provides 21% better performance than an eight-processor HP ProLiant DL785 G6 system that utilized faster CPUs and ran the Windows OS. Moreover, it gives 33% better performance than a 16-processor NEC Express 5800 server and 2.7x the performance of a four-processor IBM System 550 server.

The company also said that the new server provides a 65% better performance than the previous generation Sun Fire X4600M2 server. The Sun Fire X4640 server supports the Solaris and Windows and Linux operating systems, Solaris Containers and VMware (VMW) and Microsoft’s (MSFT) Hyper-V for virtualization.

The largest software company, Oracle Corp. (ORCL) had agreed to buy Sun for $7.4 billion ($9.50 a share) after IBM backed out of the deal. The transaction was valued at approximately $7.4 billion, or $5.6 billion net of Sun’s cash and debt. However, the deal is still subject to clearance by the European Commission.

European regulators have set Jan 27 as the deadline to approve or reject the takeover. The regulators remain concerned that Oracle will gain control of the open source database company MySQL, thus decreasing competition.

While we remain encouraged about the company’s initiatives to launch new servers, the current pending acquisition by Oracle Corp. remains an overhang. We maintain our Neutral rating on the stock.

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