I can’t quit thinking about Sun after last Thursday’s (Oct 30, 2008) news. Listening to Elgar’s Ninth Enigma Variation (Nimrod) has provided me with a soundtrack for my thoughts. I’ve written about Sun, a company I deeply admire, in the past. Jason wrote about Sun’s ability to create amazing products, but inability to ship them. I’ve compared Sun to the god Apollo, in a post that some at Sun claimed I wrote after eating magic mushrooms, to beautiful Apollo up against the Leviathan and the Juggernaut as they build their gargantuan data centers down-by-the-river.
Last Thursday (Oct 30, 2008) Sun announced a loss $1.7 billion, most of that in accounting write downs (for acquisitions). The good news for Sun is, just as much seems lost, the wizard of hardware has departed, the red ink is piling up, financial sector customers are sick, not to mention the economy, the entire game of “vertically integrated systems company” (“VISC”) is shifting radically. Yes, radically as is “radix” from the root. What an opportunity! and happy timing!
It won’t be possible to acquire or open source or lead the company out of the funk unless Sun embraces its path on the axiomatic history of successful companies: it has created, it has improved, it must now destroy. Why own a database company? The database is dead. Destroy. Tape? Tape is dead. Destroy. Java? Java is dead. Destroy. Servers? Who buys servers? Dead. Destroy. The list is nearly endless for Sun since it is a collection of so many important baubles from its first incarnation as a VISC. “Young, you’re crazy. That’s not a rational position. We made X on Java in FY2007. We made X on Database YTD FY2008. We made X on Tape in Quarter over Quarter in 2007/2008. We made X on Servers, and see the business growing in 2009.” I understand all that. So, sell it. But it is dead to Sun. You can’t truly create until you have destroyed. Nimrod came down from the mountain / with a sword made of flame / He smote down all his children / and his children grew again.
Now then, having destroyed, create. It will be very exciting. Psst: you’ll be a startup with billions in the bank. Sun did $124 million in software sales in its first quarter of 2009 with tremendous growth. Focus on that. Become a $500 million dollar growth business. It also mean shrinking down from 34,000 employees…by a lot. I don’t see how the market can punish Sun for taking this tack. The share price has been destroyed already. If Sun did something like this, wow! What a move! Sun can kick ass again. Sun can outwit Leviathan and Juggernaut.
P.S. There’s likely no iPod business out there to save Sun. Those are lightning strikes.
8 Comments
I agree, Sun should sell some of its most successful product lines while they are still able. If they bank that money, they can once again invest in creativity and innovation. Diversification is great, but not at the expense of this company’s long forgotten core purpose and identity.
I agree, Sun should sell some of its most successful product lines while they are still able. If they bank that money, they can once again invest in creativity and innovation. Diversification is great, but not at the expense of this company’s long forgotten core purpose and identity.
> compared Sun to the god Apollo
I’m starting to compare Sun to Apollo, Inc.
So let me get this. The solution is to take a struggling $13 billion/year company and turn it into a $0.5 billion/year company that you hope will grow?
It saddens me to see Sun in this position. I have worked there. I know their stuff well. I am a Solaris fan all the way – Zones, ZFS, dtrace,x86 or SPARC – you cant find any other platform that is as good right now. Yet they struggle.
Maybe I don’t get the whole picture but they seem to have spent the last 8 years trying to buy their way out of trouble and seem to have this fixation on jumping ahead of the next big tech wave. Which would be fine if they ever caught it.
Cobalt, MySQL, StorageTek – Sun didn’t need to buy any of them. By my figuring thats $11B that should have meant SPARC would be on par with POWER6 by now and their x86 range taking a bigger slice of the pie.
I really think their aim ought to be putting the effort to get their core product – hardware + Solaris – up to speed vs IBM. I work in a price driven shop – cheapest solution wins – AIX DLPARs and VMware Linux own the place right now – we only see a Sun solution when the application requires it – and even then they still try and make it go on AIX. Zones have only just got in the door, but the price of SPARC kit (Solaris x86 isn’t considered) means its hard to justify that solution.
I hope Sun pull through this but I am not holding my breath.
My experience is that no customer considers HPUX on anything an option. The M series is a solid performer that doesn’t need hand holding like the P6 (which seems to be great at benchmarks but pretty ordinary in the real world).
Couple that with the realisation that Linux isn’t the answer to all things in an enterprise and Solaris/SPARC and for that matter Solaris x86 has a solid future. We just need Sun to focus and the long overdue org changes they are making should support that.
Dave, rather than focusing on Sun, why don’t you focus on fixing your own business. Your employees are convinced they’re about to be laid off, your investors are totally pissed, and you can’t get credit if your life depended on it. Perhaps you could explain that on your blog?
@Alick
Huh? There’s not a single employee that thinks they’re going to be laid off (we’ve been hiring), there’s no investors that are pissed because … there’s no investors, Joyent is employee owned.