Vintage Clothes

Cringley had some insight in Feb 2003 on this.

How to Avoid the Almost Certain End of Sun Microsystems :
http://www.pbs.org/cringely/pulpit/pulpit20030213.html

What to do if you’re Sun? Quit.

Liquidate the company, sell the assets and turn over the proceeds to the shareholders (minus generous payouts to the employees — along with rights to any patents they had anything to do with).

Why continue a losing fight until the $6B in the bank is gone out the window? If you have nothing better to do than go home, then you should just go home, damnit!

Will Sun fare any better than Netscape (whose best product has been released open source and free to consumers)? Java = free application platform that will not produce revenues or profits to the levels needed by SUNW to survive. Better to call it a day with your head held high rather than continue to fight until you are overtaken by rivals (for sports reference, see Holyfield in boxing).

AC: The founders at the helm comment was regarding equity investment and the problems that come with it, not a way of saying the Sun will be alright because their founder still heads it.

AP: You would make people work with Office/Windows XP on a 128Mb machine!? You massochist! OK, so machines can be had cheaper. But buying costs is only part of the cost to operate them. For a small set-up example I gave, that probably wouldn’t make much difference as you still need 2 support people to cover each other. But if you have a 1000 workstations, paying $500 more per WS, so $500,000 extra investment. But instead of 20 IT support people, you only need 10; you’ll make your money back in the first year. And while the hardware depreciates in the next two years before replacement, you save $1M! Makes perfect sense to me…

And even for smaller companies, you do away with the headaches of virusses and people running everything they want left right and center and wasting productivity.

Bas: I like that last expression. The shareholders are indeed obsolete in the United States because now we’ve figured out ways to pay all of the profit to the managers

AC: Just that Linux servers serve you fine, doesn’t mean they do for everyone. Some apps simply do run best on massive 64-way multiprocessor machines that support terrabytes of diskspace and 64GB of RAM. And once you are in that business, you may as well go all they way and have all services running on one platform.

While you can say that distributed computing is more effective, you are probably right. But you can buy a machine described above, install Oracle on it an run happily, reliably and supported. For distributed computers, you are on your own. That is nice for scientific projects, but not for most businesses.

Not that Sun’s machines are mainframes, but I remember a quote from someone countering an argument that mainframes are obsolete: “Mainframes are being used by thousands of obsolete companies, serving millions of obsolete customers and making obsolete billions for their obsolete share holders” (or something to that effect)

Hey Philip, great blog. I’m one of your frequent readers. Well, would you be so kind to change your RSS feed in that the links would direct to your post instead of a link mentioned in your post? I just clicked the link for this post in my RSS aggregator (RSS Reader for Firebird, btw) and I got directed to the NYT website hehe… Well, just wondering… Keep up the good work

what is the business need Sun fills with new boxes? what is the new stuff that Sun releases the everyone wants, but no one knows they want? Philips is making the number 2 argument, others (jerome etc) are talking about the first one. Sun probably needs to do both.

As to business needs, Sun needs to implements SOLUTIONS that allow corporations to reduce their staffing levels while providing the same or greater service levels. This is what java is supposed to do. More and better programs written by fewer programmers. (personally I find python is way more efficient for my productivity than java ever was). Sun needs to do more of this. No corporation is going to choose an option that requires hiring people, but many will choose options that allow them to downsize.

as to the “new stuff” approach I think Philip is close here. Sun is “big iron” No one I know buys Solaris unless they are a corporation. I know of no small businesses that do today…but I know of a few that have gotten rid of Solaris because Linux is equivalent and cheaper…in fact, Linux is probably better because it has a faster development cycle.

so my solution would be to ‘zig where they zag’ (dw trdmrk) Sun needs to target the “young entrepreneur/college student” market. Provide tools and technologies to this group of people to let them develop businesses to eat the lunch of the older more established companies.

for example: If Sun has lots of installs in banks/cc companies (which they do) then Sun should know lots about this industry. Wh y not setup some Sun servers that handle all the regulatory requirments for doing banking transactions, provide all the tools to interface with “SunBank” and then release software at colleges to let students setup their own “microbanks” ala mini paypals. Sun provides all the application interfaces, and stores the money, but the minipaypals handle the transactions…even micro transactions. Sun charges penny fees for transactions. A student charges penny fees for transactions. And we’re still in the realm of real micropayments…at micro bank levels…in universities where micropayments would probably be very successful.

you know if you could order a pizza through your browser and pay for it through your dorm rooms bank acct that also donates a penny to “insert college charity” when the transaction happens college students would do it.

anyway, that’s just an idea…distributed banking, running on Sun hardware with Sun api’s. the point being you have to get “cool new” abilities to people “without” abilities but “with” drive and ambition. look what college students/peer to peer did to the music industry? what do you think peer to peer banking would do to the banking industry? People who don’t know what they are doing come up with great solutions to problems…isn’t that how Sun got it’s start anyway?

-calvin

We’re ripping out Sun boxes and replacing them with Pentium-4’s running Linux. New Sun boxes and Solaris are prohibitively expensive. The “lintels” run us about $800 each. Comparatively, benchmarks rate the P4s as about 25 times faster than our old Sun boxes. We could never afford Sun boxes as fast as the P4’s. We’re happy as hell in Lintel land.

“Come to think of it, what do many succesfull tech companies (MSFT, Oracle, Sun, Google, Yahoo, Amazon) have in common? They all have their founders at the helm, not some hired MBA yealding hotshot navigating the company from quarter to quarter, maximising the value of his portfolio. (I believe the owner of this blog can testify to what a bad idea that is)”

What MSFT, Oracle, Google, Yahoo and Amazon have in common is that they have products/services that large markets want to buy. Sun does not seem to be able to make that claim anymore.

Java is so fragmented and has so many different implementations that its cross-platform abilities are rendered irrelevant. Besides, it is notoriously difficult to make money out of programming tools – particularly when you are giving them away for free and they don’t require the purchase of your software to run them like Java (use Microsoft.NET as a comparison).

I can’t speak much for their servers, but it doesn’t seem likely that Sun will be able to compete with PCs running Windows 2003 Server or Linux, except in a few big companies that are diehard Sun customers.
Ie this news just came in to me: “Friday morning, Hewlett Packard (NYSE: HPQ) announced that it would pay Sun customers $25,000 to switch to HP computers running Linux OS freeware.”

I agree with Philip – it is not clear how Sun’s current market valuation will be maintained without products to sell and interested markets to buy those products.