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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."
Sun will be fine. After the exit of the two companies mentioned in the story, they are the 64 bit and high end market provider now.
//Netmar uses sun machines. www.netmar.com
Seriously. If you want to spend $5000, $8000, or even $75,000 on a computer, you can go to Dell. But, if you're looking to drop $1.3 million on a computer, you go to Sun.
For anyone that has used sun hardware, we know. It really can't be beat. The stuff is fast, scalable, and bulletproof. Sun OS is about as stable as they come.
~Will
sig?
I've been an avid investor and it is my experience that the financial firms such as MerrylLynch, PriceWaterhouseCoopers and others have their own biased stance. They are either flogging a company so that a competitor will rise in value or just are simply wrong. Furthermore, I think you're describing Merryl Lynch's business model here. Marketing is how financial industry make money, hell they can sell you paper for your dollars, they gotta be doing a great job of marketing. Who's Wall Street to talk about substance? The whole financial industry is operating on hot air. Oh wait, hot air actually has some value.
I mean... let' run through some arguments here:
1) if they are so good at analyzing the market and which company will do good / do bad, why arn't they sitting around with billions, but instead slaves away at financial institutions?
2) how many analysts spoke out at the beginning of the dot com bubble insightfully? (i.e. "this won't last?") IIRC everyone, yes including the analysts, were basically like "hey everybody what a wonderful opportunity! buy buy buy!"
3) AFAIK analyst predictions on stock / company performance has never been any more accurate than random guesses or predictions from a layman (within error tolerance) - I believe the reference was fool.com;
so, can anybody GIVE me a reason why market analysts should be trusted for their opinions? Besides that they went through a couple years of economy schoool (which, according to my acquaintance studying economy, is mostly like astrology)?
My life in the land of the rising sun.
Dell really represents a different market. They're a desktop provider first and a server provider second. Sun are the reverse.
I think Dell and Gateway's biggest success has been in pretty much cloning the IBM of the 80s, only at a fraction of the price. When you were buying IBM, you knew you were buying hardware that would last forever along with full support for as long as you were willing to pay for it.
Dell did exactly what IBM did, but did it with the same cheap parts you could get from anyone else. In the desktop market, you can get away with this much much much more than you can in the server market.
Both SGI and Sun were killed (past tense) by commodity hardware that was "good enough" to take away their sales even before they stopped innovating. In SGI's case, they panicked believing Itanium would come out in 1997 and kill them. They tried to switch to commodity hardware but couldn't stomach it and the dithering ate away at them. Itanium still sucks to this day (but MIPS could never break 1Ghz...).
.com boom of 2000. Now they're getting killed by Dells at the low end and grids at the high end. They have a huge number of employees because the company is feeding off historical service contracts (the same thing that's keeping SGI on life support). Sun needs to shrink, simplify, and focus or they'll be dead in 10 years also.
Sun fell down on the workstation side a long time ago, but their servers were hot thru the
Solaris is critical to why users like Sun. Being late to Linux is unforgivable both because Linux is a kissing cousin to Unix and because Linux is a disruptive threat to Microsoft.
Sun needs to convince users that Linux is a subset of Solaris and push two messages: (1) if you're doing Linux, go to the Unix expert, and (2) use Linux on the edge, but when you need mission-critical capability it's time to graduate to Solaris.
That's incredible. Since when should a technology company be worried about disrupting a competitor? Nuts. Sun should make all the money it can and if it does so by taking share from a competitor's inferior offerings, that's great. Merrill Lynch is attempting to halt technological progress in order to protect it's worthless Microsoft holdings. This is ass backward, they should be looking out for their investors by urging them to sell Microsoft.
Friends don't help friends install M$ junk.
- To benefit the analyst (bonuses etc.)
- To benefit the bank or banking clients (see point 1)
- Publicity
The good of the standard investor or the company being invested in doesn't even come into it. The fact he's made this an open letter means he needs Sun's stock to move for one reason or another.