You are wrong about what makes SUN money...

Think about what you said...

"what actually makes Sun money - or presumably would - would be delivering its xVM Server variant of the Xen hypervisor for the Galaxy machines, and demonstrating that xVM is cheaper and better than the ESX Server and Hyper-V options."

If xVM is cheaper and xVM costs SUN to develop, then it would cause SUN to LOSE MONEY!

Now, xVM's N1 based management seems to be compatible with VMWare and HyperV - so there seems to be very little concern with what else is marketed.

VMWare and HyperV has more visibility in the SMB market, so less confusion from a vendor may actually translate into more sales in the short term (i.e. pick between 2 rather well known options than 3 options where one is not so well known.)