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Merrill Lynch Rips Sun
cosjef writes "In an open letter to Sun, an analyst for Merrill Lynch tells Sun to change or risk adding itself to the junkyard of formerly-great technology companies like DEC or Data General. The letter even recommends taking the helm away from McNealy, whose 'brash and contrarian personality have been synonymous with the company's image and success. Unfortunately, the act is getting old.' Sun's mistakes are well documented, but the biggest one is believing that what made them successful in the past would make them successful in the future."
Newsforge
The Inquirer also has an article predicting the doom Sun. It references an article by Eric S. Raymond at Newsforge found here.
This guy has a reputation for doing this sort of thing, and more people need to know about it.
My alma matta was one of the largest Dec Sites in the country in the early 80's. All the universities infrastructure systems DEC systems and their was a mandate that all incoming students by DEC PC-350's. The net effect was there was no way to avoid the product line.
Funny thing was while some of the equipment (VAX-xxxx, PDP-11 series) were excellent, most of it was an incredible pain. The PC-350 were based on the PDP-11 architecture but wouldn't run any of the common PDP-11 operating systems. Whats more the 350's couldn't even format their own floppies. The mainframes (DEC-10,DEC-20) while solid systems suffered from unique features, 36 bit word size was my favorite.
Anyway, at one point Ken Olsen, the then CEO of DEC came to give a speach/pep talk about the great advances we were making and how wonderfull DEC would be in the future. In his q/a session he had 3000 angry engineers asking him how his company could foist off pieces of crap like the 350. His response was that we lacked an understanding of how his business worked.
DEC is but one. Technology companies must understand that they are about serving customer needs, not their own arrogance. I can go down the list of for days citing companies that either felt they were successfull so nothing could happen, or they were unique and nothing would happen, or they were just plain arrogant.
Scott Mcnealy has always been on the plain arrogant side. Suns products have always been priced very high, and they have never been willing to make the effort to penetrate mass markets. The funny thing is I really love their equipment, the same way I really love apples. The problem is I can't bring myself to buy it or recommend it in most circumstances.
eh? Are you talking about on a %-age-of-revenue thing, or in absolute terms? I think Apple spends as a % of revenue quite a bit because they're using non-standard hardware, and so can't leverage off other's work (their Q&A, testing etc. also costs them more).
On absolute terms though I wouldn't be surprised if Dell spends more than Apple - their revenues must be significantly bigger (their profits definitely are...).
But I distinctly remember in one interview Micheal Dell himself saying that one of the reasons for Dell's success was that they didn't spend anything on R&D (this was in their much earlier days) and (together with other factors) as a result would always have better margins than everyone else. Some of my engineering friends have always felt this distaste for Dell ever since then.
Anybody out there have a link to an archive of this or anything?