Slashdot Mirror
Should Sun Just Fold Now?
KE1LR writes "The Silicon Insider at ABCnews.com is taking the position that Sun Microsystems, creator of the SPARC architecutre and, oh yeah, Java, should just give up and close shop instead of continuing to wither. I agree that Sun would have to have to do something dramatic to avoid what is looking more and more like an inevitability at this point, but what could stop this slide toward the same fate as DEC? Might they have anything in the works that could save them? What could it be?"
How does folding the company stand a chance of increasing shareholder value? Would the board legitimately be able to follow this course of action?
Also do you think anybody would invite them to work at their company after that?
SURELY NOT!!!!!
"Sun is not coming back. It is a giant company without a business."
I think the article went a bit too far in predicting Sun's demise. Whilst it's true that the rating of their stock is poor and they have really failed in many areas where they would have liked to succeed, I'd say there are signs they may be coming back.
Now they have a collaboration of some description with Micro$oft; it's hard to get an ally with more punch than them, regardless of what you might think (or indeed Sun and Scott McNealy might think!) of them.
They finally seem to be realising that you can't have both the hardware and the software market. Look at IBM and Apple for precedents there. Sun has started a new price war on Linux and Windows on the x86 platform.
My operat~1 system unders~1 long filena~1 , does yours?
It's not as if a company with a market cap of of 13 BILLION dollars can just cash out and walk away from the table with 13 billion dollars.
Like is or not SUN, has to keep playing the game. It would loose even MORE money by trying to close up shop quickly.
A company has value for lots of reasons, besides pure, resellable assets: market position, reputation, etc.
What SUN needs is leadership like that which has helped Apple so much in recent years. If you look back far enough, you'll see a time when Apple was in quite a similar postion as SUN is today.
I'm not saying that SUN should start building sPods and sBooks. I think SUN needs to find its place in the market (hint: not the same place as Apple or Dell).
Life is too short to proofread.
The answer: because everyone loves the "zero sum game".
...), but are massively opposed to each other.
You see it all over the place now. Someone must win, and the other guy loses. This is what so confounds all of the pundits when Apple comes out with things like the iPod and dominates that market. In their mind Apple was supposed to just give up since they couldn't "win" vs. PCs.
Its this kind of simplistic thinking that even made Microsofts monopoly come about. Its why we have two political parties who sometimes do not differ one iota with respect to certain policies (DMCA, government spending, easy treatment of big business,
Everyone's got to be right nowdays, and that requires that someone else must be wrong.
Any pundit who makes his living predicting X will die, Y will go under, Z is now irrelevant, doesn't deserve to be listened to, they haven't thought hard enough to deserve it.
Because we all know that market cap is truly the way to judge the health of a technology company.
Forget the whales - save the babies.
and stopped wasting time developing and maintaining, for example, their own version of tar or find.
The versions of these utilities that come with proprietary Unices are, frankly, CRAP.
openssh is another one; think back to last year... and the flurry of ssh patches. Linux easy! Solaris hard! Go figure.
In the free world the media isn't government run; the government is media run.
Silicon Graphics, another early bay-area unix workstation success, was in a much smaller niche, even at its peak. SGI has been circling the bowl now since the late 90's and still hasn't gone away. They barely even lost any money last quarter.
Sun has a much more stable market of business buyers. They have to be selective to get back to profitability, but it's definitely possible, even without a radical change in market. People still pay big money for mid-range and high-end servers. People still pay big money for solid enterprise software. Business customers are willing to pay real money for real solutions. A company like sun just needs to make sure that it solves today's hard problems, and does it at a price that's similar to the competition.
A slump doesn't mean a fall. A re-org doesn't mean a death knell. Sun has lots of chances left to redefine itself, and figure out how to be profitable. They just might have to lose market share and girth in the process.
What exactly does Sun have to offer in such a merger? Sun's big attributes are UltraSPARC, Java, Solaris, and some knowledge about big server engineering.
Apple has no need of UltaSPARC, it's already made its deals with IBM for the PowerPC line, which is looking like a pretty good bet these days. Apple has as much Java as they need right now, I don't think Sun's Java expertise is going to bring much to the table. Solaris is of no use to Apple whatsoever really. Big servers - well that is something that Apple lacks, but they re beginning to make some slow but steady server progress on their own with the Xserve line - I don't think they are that desperate for a huge shot in the arm in the server market (let alone the conflicting chip architectures and OSs involved in expanding that way!).
No, it's Apple that has value to offer Sun, because right now Sun is making a bid for the desktop, and that is Apple's true strength right now.
That means there will be no merger. Sun might try buying Apple, but I think that would be rather too expensive for them right now.
Jedidiah.
Craft Beer Programming T-shirts
Sorry, it's not just that PCs are cheap. IMHO Sun has forgot how to design a CPU. Or a chipset. Sorry, 1.2 GHz just doesn't cut it, no matter what IPC you have. Doubly so when the best you can offer with that CPU consists of:
- SDR RAM in an age when everyone's moved on to DDR
- 32 bit memory bus, when even the original Pentium in the 90's had a 64 bit bus
- crap outdated components and cards at ludicrious prices (E.g., is that an ancient ATI Rage that they're selling for almost $500? Well, gee, in the PC world you can already get a GeForce 6800 for that kind of money.)
Sorry, Suns just don't cut it. You'd need somewhere between 8 and 16 of the latest UltraSparcs in a box, to even touch a cheap 4 way Xeon for a server. And you can check out for yourself what the Sun would cost in that configuration.
Charging that kind of ludicrious prices was justifiable when they at least had the bang to claim _some_ advantage over a PC. Not when a Pentium 4 or K8 or G5 (pick your favourite there) is running circles around the UltraSparc.
Sun has fallen so far behind the technology curve, it's not even funny. And firing most of their R&D stuff doesn't give me any confidence that they'll spring back to having a competitive computer any time soon either.
Honestly, I just can't recommend a Sun with a straight face any more. Do you want a unix-y workstation? Get a cheap PC, install your favourite linux distro on it, and there you go. It'll run circles around a Sun. Do you want a RISC Unix workstation? Get a Mac. (And I'm not even a Mac fan.) Do you want a Unix server? Same thing.
Will they die? Strictly speaking: probably not. They can always turn into yet another Dell, packing together PCs from components made by others.
But it sure won't be the same Sun. In a sense, the old Sun as we knew it, _will_ die. To be mean: and in a sense, good riddance.
A polar bear is a cartesian bear after a coordinate transform.
These guys are not selling dog food over the interweb-thingie. They have been around for ~22 years, and have a rather long history of building extremely robust hardware in the server space. (I specified server space because the Ultra5/Ultra10 and the low-end Blades are not great.)
No, I am not a Sun fanboy; I like most of their hardware, and I like Solaris. I just believe that people shouldn't treat Sun like the flash-in-the-pan goofy "technology companies" that made the bubble possible.
I want to drag this out as long as possible. Bring me my protractor.
Sun's biggest competitors are IBM and Hewlett Packard. Apple computers use IBM PowerPC chips. -- It's the same reason that Burger King restraunts started selling Coca-Cola products when Pepsi purchased Taco-Bell and KFC... Buying from your competition is bad business.
Apple is a desktop provider first. Apple sells servers as well, but only because of the demands for such hardware from companies that have standardized on Macintosh. Sun is a server company first, they have never had the capability of dealing with the commodity business of desktop hardware. The priorities of these two extremely different companies would never mesh. Thus the Culture would always run amok with the competing priorities.
Kinetic stupidity has a new brand leader: Allen Zadr.
AMD64 and Itanic are threatening Sun's bread and butter. That's why they're trying to get their ducks in a row so they can attack the low end. Managers usually want to stick with a single provider for all software and hardware. If Sun can provide everything top to bottom, they'll be a much more attractive option.
Javascript + Nintendo DSi = DSiCade
Because Sun isn't prepared to play in Windows, they suffer.
That is like saying "because Ferrari isn't prepared to build economy cars, they suffer". You seem to be missing the point: Sun's real market is not the commodity-server area where Windows is popular. Sun shines* in the area of 8+ CPU machines that actually have to a) bear a heavy load and b) stay up while doing so.
* D'oh.
I want to drag this out as long as possible. Bring me my protractor.
It's not about speed. It's about reliability.
-30-
a rather long history of building extremely robust hardware in the server space.
The article actually mentions a specific moment when the author understood that Sun has no future. It was when listening to a story about a tour of Google facilites -- the Google CEO pointed to the rows and rows and rows of cheap and semi-obsolete hardware which is Google server farm and said that Google will never buy expensive servers again.
The MRCH (Massively Redundant Cheap Hardware) approach is BOTH cheaper and more reliable. Sun IS screwed.
Kaa
Kaa's Law: In any sufficiently large group of people most are idiots.
Can your cheap 4-way Xeon dynamically remove a failed processor from the running system? Can it dynamically remove a memory bank from use if it fails?
Of course not.
However, how many customers actually need this? Can a Linux cluster do as well? Because with the cluster, you can swap out entire computers without taking the cluster down.
So the question is not whether one Xeon PC can replace one Sun server, the question is whether cheap commodity hardware (probably clustered) can replace a Sun server. When you add up the hardware, the electricity, and especially the salaries of the IT guys to maintain it, is the cluster a better deal than the Sun server? (I don't know the answer for sure, but I'm guessing it probably is. Consider Google and their massive farm of cheap PC hardware.)
And even if the Sun server is still slightly cheaper this year, will it still be next year?
The 90's will never come again for Sun. Either they need to find a different way to make lots of money, or they are toast.
steveha
lf(1): it's like ls(1) but sorts filenames by extension, tersely
He spelled McNealy's name 'McNeely'. Like ten times. If the author couldn't even get the name of a corporate CEO who has been prominent in technology for the last two decades right, why should I give one whit what he has to say about anything?
Maybe it's time for a certain broadcast news organization to 'just fold now.'
Everyone will start to cheer when you put on your sailin' shoes.
I'm not disagreeing with you, but I think you missed what people are looking for.
Wall Street is looking for ROI. That's it. You're in niche market which is static? Good - maximize profits and spin off dividends, lots and lots of bug fat dividends. Or provide ROI by an increasing stock price.
Micro$oft, when growing, didn't pay dividends - but was well beloved because its stock price kept increasing. Now that its stock price is no longer ballistic it is going to have to start paying a dividend (start paying out some of that billions it has as a war chest) in order to interest investors. (yes, I know, MicroSoft is doing so)
Some of the darlings of Wall Street are utility companies. They're not growing - but if run well they spin off money hand over fist. Large, consistent dividends for all. Investors love that.
There are many thousands of niche companies that aren't going anywhere (I've worked for quite a few) They aren't growing; fixed set of customers; their stock price isn't going to go ballistic; but they're *consistently* profitable.
And that is what Wall Street wants. No unpleasant surprises. Pleasant surprises are always welcome. Return on Investment.
SUN has a niche. A very profitable niche. But reality is that the niche is under assault from many sides (HP, IBM, Dell, Linux, ya name it) The niche isn't growing; the niche may be shrinking. SUN - in order to attract investment - is going to have to (a) prove that it is well protected in its niche (which is probably no, but can be debated. On one side we have WANG and DEC; on the other side we have IBM still making lots of money off of Big Iron) (b) return something, be it increasing stock price or dividend from profits, to investors.
I agree with others - people have called SUN dead before and it has made a comeback. As Andy Grove would say, SUN seems to be at an inflection point. I think what many of us are noticing is a lack of a consistent vision or plan - a lack of "THIS is what we're going to do!" Their plan seems to be more a Flavor of the Week. People at SUN may disagree, but from out here in the grandstands the perception is that y'all are doing a lot of flailing around.
Yes.. and on that side of the board, they have IBM mainframes beating them. SUN's niche has been between these two extremes of cheap, unreliable commodity hardware, and expensive ultra-reliable mainframes.
Unfortunately, this niche is disappearing as the PC's get better and more reliable, and the mainframes have gotten cheaper and started to move into the old UNIX-server market.
(Linux/390, anyone?)
Sun has been hammered relentlessly for the past 2 years by the tech media. I dare somebody point me to an article with a contrarian view: that Sun will emerge again. But notice they're all saying the same things over and over. In fact, they all seem to be repeating one another.
... CRASH!
When conventional wisdom is 100% in the same direction, it usually ends up wrong. It's like just when everybody thinks the stock market is going up forever and all the amatures hop aboard,
Research shows that 67% of those who use the term "research shows", are just making shit up.
WHO CARES? My load balancer automatically detects a dead server and routes requests to another one. Then I go find the dude hardware, pull it out of the rack, and throw it into the garbage. For $4k I can replace it.
By the way, using a larger number of cheap boxes gives me on average better performance and better scalability. The age of Le Grand Box for most business uses is dead.
Sun may be presiding over a declining hardware empire, but it retains an advantage in the growing software market that is based on identity management. Specifically, Sun inherited the Netscape LDAP product line from AOL, which evangelized the commercial adoption of LDAP. Yes, Novell's directory server is a strong competitor, but Sun has the other end of the end-to-end solution: the identity client: Java smart cards and JVMs on mobile phones.
Are there quality gaps in the Sun software stack? Yes. But there are two solid anchors in that stack: licensed JVMs on mobile identity tokens (cards, buttons, passports, phones) and licensed directory (LDAP) servers on the back end. Revenue generation from those two anchors will be sufficient for Sun to (gradually, painfully) upgrade the rest of their stack.
Not to mention OSS Java application evolution, which occurs despite Sun, but which value does eventually accrue to Sun. The academic penetration of Java has seeded a generation of bright ideas to be delivered via OSS Java. Those ideas may yet migrate to C#, but for now, the incumbency advantage goes to Java. If Sun R&D can escape NIH, the best of the OSS ecosystem would find a JCP path into their products.