EXHIBIT 99.1


NEWS	CONTACTS :
RELEASE	Jeremy Story	Dana Johnson
	Corporate Communications	Investor Relations
	StorageTek	StorageTek
	303.661.6169	303.661.2676
	jeremy_story@storagetek.com	dana_johnson@storagetek.com

Storage Technology Corporation

One StorageTek Drive

Louisville, CO 80028-4307

303.673.5151

STORAGETEK ANNOUNCES SECOND QUARTER REVENUE AND EPS NUMBERS

Revenue of $549 Million, GAAP EPS of $0.29, Non-GAAP EPS of $0.32

LOUISVILLE, Colo. – July 26, 2005 – StorageTek^® (NYSE: STK) today announced second quarter 2005 net income of $31.2 million, or $0.29 diluted earnings per share on a GAAP basis. Non-GAAP net income of $34.4 million, or non-GAAP diluted earnings per share of $0.32, reflects a pre-tax adjustment of approximately $5.2 million for costs related to the proposed merger with Sun Microsystems, Inc. These amounts compare to net income of $35.6 million, or $0.32 diluted earnings per share, for the second quarter of 2004. Revenue for the second quarter of 2005 was $549.3 million compared to $516.6 million for the second quarter of 2004.

“We are very pleased with the revenue improvement on a year over year and sequential basis, as well as the continued strength in our product and service margins,” said Patrick J. Martin, StorageTek chairman, president and chief executive officer.

Total tape revenue was up 13 percent compared to the same period last year, and up 14 percent from the first quarter. “We delivered our 1000^th SL500 mid-range library and the 500^th SL8500 high-end library in the second quarter. Customers increasingly value our automated tape solutions as the preferred choice for data protection and archiving,” said Martin.

Financial highlights for the second quarter include a cash and investment balance of approximately $1.2 billion and cash flow from operations of approximately $47 million.

“StorageTek’s financial condition is as strong as it has ever been,” said Robert S. Kocol, StorageTek chief financial officer. “We continue to be very profitable, generating significant cash flow and improving on an already solid balance sheet.”

On June 2, 2005, Sun Microsystems, Inc. and StorageTek announced that they entered into a definitive agreement under which Sun will acquire StorageTek for $4.1 billion in cash. The waiting period under the Hart-Scott-Rodino Antitrust Improvements Act has expired. The proposed merger remains subject to, among other conditions, clearance under the European Union merger control regulation and approval by StorageTek stockholders at a special meeting of stockholders scheduled for August 30, 2005, in New York City. The proposed merger is expected to close in late summer or early fall. For more information on the merger, please refer to StorageTek’s proxy statement as filed with the Securities and Exchange Commission.

StorageTek will conduct the second quarter 2005 financial results conference call today at 8:30 a.m. EDT. Media and analysts may join StorageTek for a live audio Web cast at http://storagetek.shareholder.com/medialist.cfm. Media and analysts who prefer to join via telephone line may dial 1-800-810-0924 at least 5 minutes prior to the start of the conference call. International participants should dial +01-913-981-4900.

A replay of the conference call will be available on the Web and can be accessed through the StorageTek Web site. The replay will also be available via telephone beginning at Noon EDT today and run through Midnight EDT on July 30, by dialing 1-888-203-1112. If calling internationally, dial +01-719-457-0820. Both the domestic and international replay call-in numbers require pass code 4679702.

Safe Harbor Statement

This press release contains certain statements, projections and forecasts regarding StorageTek’s future business plans, financial results, products and performance that constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by the use of words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” and “believes.” There are a number of risks and uncertainties that could cause the company’s actual results to differ materially.

Some of these risks and uncertainties include, but are not limited to, StorageTek’s ability to develop, manufacture and market new products and services successfully; the effect of product mix and distribution channel mix on our gross margins; our ability to execute our Information Lifecycle Management strategy; competitive pricing pressures; rapid technological changes in the markets in which we compete; our ability to attract and retain highly skilled employees; changes in our management; our ability to protect and develop intellectual property rights; our reliance on certain sole source suppliers; our ability to obtain quality parts and components in a timely manner; general economic conditions in the United States and globally; and other risks described in StorageTek’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, and Current Reports on Form 8-K that are filed with the Securities and Exchange Commission and which are available on the SEC’s website.

About StorageTek

StorageTek (Storage Technology Corp., NYSE: STK) is a $2 billion global company that utilizes its information lifecycle management strategy to help businesses align the cost of storage with the value of their information. The company’s innovative storage solutions manage the complexity and growth of information, lower costs, improve efficiency and protect investments. For more information, visit www.storagetek.com or call 1.800.877.9220.

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TRADEMARKS: StorageTek and the StorageTek logo are registered trademarks of Storage Technology Corporation. Other names mentioned may be trademarks of Storage Technology Corporation or other vendors/manufacturers.

STORAGE TECHNOLOGY CORPORATION
GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)


	Quarter Ended						Six Months Ended
	07/01/05			06/25/04			07/01/05			06/25/04
Revenue
Storage products	$	305,932		$	289,048		$	572,134		$	583,654
Gross profit margin		49	%		47	%		50	%		48	%

Storage services		243,367			227,567			476,421			448,033
Gross profit margin		44	%		44	%		43	%		43	%


Total revenue		549,299			516,615			1,048,555			1,031,687

Cost of revenue		293,593			278,783			558,273			555,652


Gross profit		255,706			237,832			490,282			476,035
Gross profit margin		47	%		46	%		47	%		46	%

Research and development costs		50,126			47,046			97,497			95,548
Selling, general, and administrative expense		177,031			148,287			341,676			310,972


Operating profit		28,549			42,499			51,109			69,515

Interest income		8,779			3,319			15,955			6,500
Interest expense		(309	)		(318	)		(528	)		(695	)


Income before income taxes		37,019			45,500			66,536			75,320

Provision for income taxes		(5,866	)		(9,873	)		(11,958	)		(16,344	)


Net income	$	31,153		$	35,627		$	54,578		$	58,976


EARNINGS PER COMMON SHARE

Basic earnings per common share	$	0.29		$	0.32		$	0.52		$	0.53

Weighted-average shares		105,742			110,675			105,906			110,613


Diluted earnings per common share	$	0.29		$	0.32		$	0.50		$	0.52

Weighted-average and dilutive potential shares		107,738			112,726			108,131			113,040


SUPPLEMENTAL FINANCIAL DATA — STORAGE PRODUCTS REVENUE

Tape products	$	242,457		$	215,044		$	454,354		$	438,133
Disk products		35,826			46,186			68,317			90,404
Network products		17,310			18,595			30,107			35,609
Other		10,339			9,223			19,356			19,508

Total storage products	$	305,932		$	289,048		$	572,134		$	583,654

STORAGE TECHNOLOGY CORPORATION
RECONCILIATION OF GAAP NET INCOME TO NON-GAAP NET INCOME
(Unaudited)
(In Thousands, Except Per Share Amounts)

To supplement the consolidated financial statements presented on a GAAP basis, the following reconciliation and non-GAAP consolidated statements of operations are presented as additional non-GAAP measures of operating results, net income, and earnings per common share adjusted to exclude merger costs. Management believes these additional non-GAAP measures are appropriate to enhance an overall understanding of StorageTek’s past performance and future prospects. The adjustments to StorageTek’s GAAP results are made with the intent of providing both management and investors a more complete understanding of the underlying operational results and trends of StorageTek’s business. The non-GAAP results are an indication of baseline performance before expenses that are considered by management to be outside of the core business operational results. The presentation of this additional information is not meant to be considered in isolation or as a substitute for net income or earnings per share prepared in accordance with GAAP.


	Quarter Ended				Six Months Ended
	07/01/05		06/25/04		07/01/05		06/25/04
GAAP net income	$	31,153	$	35,627	$	54,578	$	58,976
Merger costs, net of tax (1)		3,221		—		3,221		—

Non-GAAP net income	$	34,374	$	35,627	$	57,799	$	58,976


GAAP basic earnings per common share	$	0.29	$	0.32	$	0.52	$	0.53
Merger costs, net of tax		0.04		—		0.03		—

Non-GAAP basic earnings per common share	$	0.33	$	0.32	$	0.55	$	0.53


Weighted-average shares		105,742		110,675		105,906		110,613


GAAP diluted earnings per common share	$	0.29	$	0.32	$	0.50	$	0.52
Merger costs, net of tax		0.03		—		0.03		—

Non-GAAP diluted earnings per common share	$	0.32	$	0.32	$	0.53	$	0.52


Weighted-average and dilutive potential shares		107,738		112,726		108,131		113,040

(1) Merger costs of $5,195, net of taxes of $1,974, consist primarily of investment bank, legal, and filing fees associated with the proposed merger with Sun Microsystems, Inc. These costs have been included in the selling, general, and administrative line of the GAAP consolidated statements of operations. Taxes have been calculated based on the effective U.S. tax rate of 38% and assumes all merger costs are deductible.

STORAGE TECHNOLOGY CORPORATION
NON-GAAP CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, Except Per Share Amounts)


	Quarter Ended						Six Months Ended
	07/01/05			06/25/04			07/01/05			06/25/04
Revenue
Storage products	$	305,932		$	289,048		$	572,134		$	583,654
Gross profit margin		49	%		47	%		50	%		48	%

Storage services		243,367			227,567			476,421			448,033
Gross profit margin		44	%		44	%		43	%		43	%


Total revenue		549,299			516,615			1,048,555			1,031,687

Cost of revenue		293,593			278,783			558,273			555,652


Gross profit		255,706			237,832			490,282			476,035
Gross profit margin		47	%		46	%		47	%		46	%

Research and development costs		50,126			47,046			97,497			95,548
Selling, general, and administrative expense (1)		171,836			148,287			336,481			310,972


Operating profit		33,744			42,499			56,304			69,515

Interest income		8,779			3,319			15,955			6,500
Interest expense		(309	)		(318	)		(528	)		(695	)


Income before income taxes		42,214			45,500			71,731			75,320

Provision for income taxes (1)		(7,840	)		(9,873	)		(13,932	)		(16,344	)


Non-GAAP net income	$	34,374		$	35,627		$	57,799		$	58,976


NON-GAAP EARNINGS PER COMMON SHARE

Basic earnings per common share	$	0.33		$	0.32		$	0.55		$	0.53

Weighted-average shares		105,742			110,675			105,906			110,613


Diluted earnings per common share	$	0.32		$	0.32		$	0.53		$	0.52

Weighted-average and dilutive potential shares		107,738			112,726			108,131			113,040

(1) Excludes merger costs of $5,195, net of taxes of $1,974, for the quarter and six months ended July 1, 2005. Further explanation of the costs is included in the reconciliation on the previous page.

STORAGE TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In Thousands)


	07/01/05			12/31/04
	(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	860,193		$	853,410
Short-term investments		282,865			281,028
Accounts receivable		461,090			519,273
Inventories		127,121			123,459
Deferred income tax assets		158,513			174,253
Other current assets		7,660			1,062


Total current assets		1,897,442			1,952,485

Long-term investments		19,747			48,408
Property, plant, and equipment		177,565			177,371
Spare parts for maintenance		51,069			49,048
Deferred income tax assets		46,282			46,569
Other assets		140,618			133,960


Total assets	$	2,332,723		$	2,407,841


LIABILITIES
Current liabilities:
Current portion of long-term debt	$	1,231		$	1,551
Accounts payable		110,047			121,019
Accrued liabilities		489,936			533,839
Income taxes payable		227,305			239,253
Other current liabilities		2,471			59,365


Total current liabilities		830,990			955,027

Long-term debt		9,215			11,006


Total liabilities		840,205			966,033


STOCKHOLDERS’ EQUITY
Common stock, $0.10 par value		11,606			11,288
Capital in excess of par value		1,101,444			1,019,101
Retained earnings		654,673			600,095
Accumulated other comprehensive loss		(15,541	)		(38,772	)
Treasury stock		(229,204	)		(134,148	)
Unearned compensation		(30,460	)		(15,756	)


Total stockholders’ equity		1,492,518			1,441,808


Total liabilities and stockholders’ equity	$	2,332,723		$	2,407,841

STORAGE TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)


	Six Months Ended
	07/01/05			06/25/04
OPERATING ACTIVITIES
Cash received from customers	$	1,080,750		$	1,115,656
Cash paid to suppliers and employees		(982,907	)		(962,099	)
Interest received		15,065			5,861
Interest paid		(474	)		(555	)
Income tax paid		(13,855	)		(15,602	)

Net cash provided by operating activities		98,579			143,261


INVESTING ACTIVITIES
Purchases of investments		(252,991	)		(244,108	)
Proceeds from sale of investments		279,609			193,515
Purchases of property, plant, and equipment		(35,270	)		(27,961	)
Proceeds from sale of property, plant, and equipment		47			13
Other assets		(5,759	)		(23,854	)

Net cash used in investing activities		(14,364	)		(102,395	)


FINANCING ACTIVITIES
Purchases of common stock		(95,056	)		(56,155	)
Proceeds from employee stock plans		52,286			45,068
Proceeds from other debt		1,467			428
Repayments of other debt		(2,114	)		(815	)

Net cash used in financing activities		(43,417	)		(11,474	)


Effect of exchange rate changes on cash		(34,015	)		(29,011	)


Increase in cash and cash equivalents		6,783			381
Cash and cash equivalents — beginning of the period		853,410			727,354

Cash and cash equivalents — end of the period	$	860,193		$	727,735


RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES
Net income	$	54,578		$	58,976
Depreciation and amortization expense		38,835			40,549
Inventory writedowns		13,891			10,259
Translation loss		16,010			18,684
Other non-cash adjustments to income		38,367			33,567
(Increase) decrease in assets:
Accounts receivable		32,194			83,969
Other current assets		(9,461	)		(13,053	)
Inventories		(10,860	)		4,407
Spare parts		(12,140	)		(10,837	)
Deferred income tax assets		584			(850	)
Decrease in liabilities:
Accounts payable		(8,731	)		(34,723	)
Accrued liabilities		(20,724	)		(23,509	)
Other current liabilities		(21,433	)		(16,870	)
Income taxes payable		(12,531	)		(7,308	)

Net cash provided by operating activities	$	98,579		$	143,261

STORAGE TECHNOLOGY CORP 8-K