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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?"
i personally think they are relying too much on gov contracts to fund them and they are losing there because of "cheap" windows computers.
They should acquire BSD, which will teach them how to continue dying... forever.
yeah fold NOW
$ strings FTP.EXE | grep Copyright
@(#) Copyright (c) 1983 The Regents of the University of California.
Apple is not what it once was marketshare wise, but it's still a cool company. Why does everyone want to kill these shrinking companies instead of letting them carve their own niche?
TW
Let's take a look at Sun history:
First they built "low-end" workstations. They managed to make a killing at this. Eventually PCs started eating their lunch. So they "reinvented" themselves as a server provider. They did quite well at this until PCs started threatening that market. Then they "reinvented" themselves as a complete solutions company. They did quite well at this until PCs went 64bit.
Now they are "reinventing" themselves as a Desktop provider. They are honestly working to produce one of the most competitive desktops on the market. My current testing of their desktop shows that they still have a little ways to go, but for a first release they've done pretty well. When you combine in the publicity their Looking Glass technology is bringing them with the technologies that Sun is obtaining from Microsoft (I've been told that the next version of StarOffice will have Access support), they are truly posed to begin doing to Microsoft what Microsoft did to them: Eat away from the bottom up.
Javascript + Nintendo DSi = DSiCade
Move over Apple, move over BSD! There's a new game in town, and its name is SUN!
Come on, guys. Everyone's been talking about all these guy's deaths forever, but they're still here. There's a market for all of them.
~Will
sig?
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!!!!!
I've worked with Sun hardware for a long time now (from IPC/IPX up through the E10K) and their equipment (sans a few exceptions) is incredibly awesome. It might be on the pricey side but for some reason, they refuse to die! I'm running two sparc20's and a SS10 at home and just love them. Sun's OS (using Solaris 9) is solid and performs well even on this old hardware. I personally think it would bad for business if they went the way that DEC did (worked with DEC Alpha and talk about performance -- nice ...). It's too bad that Sun hasn't tried harder to make their OS competitive with Linux, but then hey, the intel architecture isn't their forte.
"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?
Just a bit of info:
Sun's stock (SUNW) is now hovering at about 4.00 (down slightly today).
Here's SUNW over the past 5 years
Casual Games/Downloads
Sun insists that they won't sell Java to IBM. IBM is now quite dependant on Java and have all sorts of ideas for how they would like to change it if they didn't have to constantly butt heads with Sun.
So, okay, fine, IBM can just wait a bit and buy Sun for a reasonable price. That way, Java won't have been released into the public domain and IBM won't have to argue (as much) when they want to change it.
IBM has the most to gain from control over Java -- arguably Microsoft has more but for legal reasons they won't bother even trying to buy Sun -- so they'll be willing to pay the most, so they'll get 'em.
"Those who have never entered upon scientific pursuits know not a tithe of the poetry by which they are surrounded."
Well on a side note, how much this holds for everyone else I do not know, but the College Board (AP) (they do highschool testing for college level courses in highschool) is switching their cirriculum to Java, instead of C++. From this effect a lot of colleges are now switching to Java to teach programming. At my collge the intro level courses are going to be phased over to java sooner or later (I think its next semester actually). If Sun is really going to die, then a large amount of people have put support into their dying product. I think that even if Sun struggles hardware wise, that its Java platform will continue on. Think of Sega, they went from hardware and game manufacturer to just game manufacturer. Why can't sun do the same?
je suis parce que j'aime
Sun has something like $6billion in their coffers. At their current burn rate, they will be around for a long time. Their new JDE push (and associated service revenues) could be the thing they have needed to appease stockholders and get back in the game.
Of course, they could just take that cash, distribute it to their employees, lay them all off, then sell their receivables, contracts, and customer base to some other company *cough*IBM*cough*, then split that money amongst the 'execs'. There would be a lot of retired ex-Sun folks lounging around the pool.
One would need to see a lot more client/server integration, but I think if Sun/Apple (one of my labmates suggested Snapple) marketed enterprise solutions consisting of high-end multiprocessor servers serving Java apps to Apple workstations, they might really get somewhere.
It's a gamble, but Apple could only profit from it and Sun needs new ideas fast.
Sigmentation fault - core dumped
Thats good, lets not make java better than .net but let the courts decide. I love how everyone is against lawsuits and the government mendling in things until its apple,sun or whoever on the suing side.
Have you ever been to a turkish prison?
One out of two ain't bad.
Sun took a little bit of a beating because of cheap servers and cheap clusters. The ultrasparc is still a pretty bad-ass CPU though. Sun has figure out that they need to keep entry level server at around the $999 level and have done so for over a year now. With the new Opteron's and a metric ass-load of cash, Sun is most certainly not going to be another DEC. There are still DEC systems being made (just under the HP flag now), and you can still buy new Tru64, OpenVMS stations, etc...
If my company needs anything beyond the $600 and $700 range, I would recomend Sun any day of the week.
/* oops I accidentally made a comment, sorry */
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.
A company can survive without growing. Wall Street may not like it, but look at Apple, as an example.
Sun has a pretty cool niche - They produce some of the best server-class machines in the world. And I say this as a fairly vocal proponent of using commodity PC hardware whenever possible... I've had the opportunity to use a few decked-out UltraSparc boxen, and quite simply, they rock. A cluster of PCs can do the same task 90% of the time, but when you need high performance in a single box, you just can't do better (I also say that having used some of IBMs high-end offerings, and they just don't compare IMO).
So should Sun fold? No. They need to reprioritize, from growth to maintaining market share and quality. Not cutting costs, not appealing to more of shrinking market, but just doing what they do well.
As for the whole Java debacle... Well, if they can find a way to make money from it, okay. But if not, they need to stop flogging a dead horse, and just bury it.
Sure, Sun are in the doldrums.
Companies do not commit suicide - and the article acknowledges that. Nor should they; an investment in a company is just that, an investment. The job of the directors (unless instructed otherwise by the shareholders) is to run the company in as profitable way as possible.
There is no way that Sun is worth more as cash than as a going concern. Just not going to happen. The very closest you could get to a corporate suicide of the type that this article advocates is a friendly buyout of some sort.
Personally my money's on Sun making a comeback; they invest in brains and research to an extent that to me inspires confidence in their future.
That sort of pollyanna-ism brings in the readers though, so I suppose it's a good tactic.
D.
--- These are not words: wierd, genious, rediculous
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.
Unfortunately this is true, there seem to be an internal struggle between geeks and suits, as much as I admire the idealism of Sun they still don't get what the market wants, try to develop a database application with the latest JDK and you will be frustrated, the retarded complexity of Swing and sloppy sluggish end result, recently I regained a little faith of Java after giving up on it long ago, but still the productivity is much lower than comparable tools, the learning curve alone is a major demotivator and don't get me started on the J2EE platform, recently this struggle became visible when top notch suites and geeks walked out of Sun, it is a typical case of lack of vision, Sun is sending mixed messages some times the planning is good but the execution is shoddy at best and vice versa.
Hey,
I want to see the new CPU's they're cooking up before anything else happens. I'm tired of the clock-speed game and want some hard, real improvements in the way things are done. No one else is doing it (or successfully anyway, Itanium, for example).
Should they put linux on their new processors? To have any sort of wide acceptance, probably yes.
-m
http://www.invisik.com
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.
While Sun's competition all sell Windows as well as UNIX and Linux servers, Sun has refused to play in the Windows game. Sun was never big enough to compete directly with the ranks of IBM (AIX) and Hewlett Packard (HP/UX) on both the UNIX and Windows front.
Sun started as a specialist UNIX based Hardware vendor. A great majority of Sun's popularity thoughout the 1990s was directly attributable to the UNIX specialist hardware at a fair price. Specifically their small-business and department entry-level servers.
Pound for pound Sun Hardware is still cheaper than HP/UX PA/RISC hardware or IBM AIX Power/PowerPC hardware. HP/UX and AIX are also at risk, but HP and IBM have more than ample funds to cater to selling extrememly inexpensive Linux based servers. Blue and Brown both are willing to relegate UNIX to Large Scale installations only. Sun's 'entry class UNIX servers', once thier bread and butter, have now been outclassed by Powerful Linux solutions.
Smartly Sun now also sells Linux based servers - but their servers do not have the assumed Windows/Linux flexability of the commodity hardware servers sold by the competition.
My point is - Sun is dying because of IT purchasing agents, like me, who are not willing to buy vendor lock (lock into Linux / lock into Windows). Because Sun isn't prepared to play in Windows, they suffer.
I agree that Windows has something to do with it, but I don't think it's as direct as you propose.
Kinetic stupidity has a new brand leader: Allen Zadr.
This is just false.Well part of it.
There top of the line workstation is the Tezro, a quad processor 800mhz MIPS proc system, as far as a 'desktop' is concerned.
Then there is the Onyx4 Ultimate Vision , used heavily by high end post production houses for 4k Digital Intermediate work, as well as research and gov'ment agencies.
The part of them dumping most of their bldgs in Mtn. View. well yea..
thanks to piss-poor-mgmt....
When I was learning to drive, a thing my driving instructor said to me has always stuck with me. He said the thing that causes most driving accidents is indecision.
I think companies like Sun (and Corel and others) start to fail when they become indecisive. They need to decide on their path and stick to it, rather than dressing up in a penguin suit one day and mocking linux the next.
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.
What about these possible scenarios:
Apple is definately making moves into the workstation/server space and OSX _can_ play there. Perhaps Apple could buy what's left of Sun in a year ot two (when there's much less than there is now) for firesale prices. This would mostly be to gain acess to Sun's sales channels and some engineering resources.
Or, more likely: IBM buys Sun and then takes Java in the direction it wants to take it. Of course, they also would probably want to wait for a lower price, so don't look for this to happen right away.
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.
I like Sun's massively parallel Niagra architecture. Each chip runs 32 threads in parallel with an impressive 80% efficiency in pipeline usage.
If they can get this off the ground, it'll be great for servers.
Unfortunately, it's lousy for single-threaded compute-intensive processes like chip synthesis and simulation tools which are what I need.
It's interesting that they are kinda going back to the mainframe mentality where I/O and over-all throughput are more important than single-threaded performance, but with the way servers are going, this, I think, is really what is needed.
I'd rather see Sun completely re-assess their position and find out how they can leverage their core strengths (technology innovation, experience at the server side of computing, understanding of how to use the network as a computing machine, etc.) and implement a new strategy based on those strengths.
IBM re-invented itself. Apple re-invented itself. Sun is capable of doing the same.
Read the EFF's Fair Use FAQ
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.
Sure, they're still looking to finally validate the whole 'we can provide you with a SmartTerminal' concept they came up with years ago, and they're still pushing at the low end desktop, but I'm guessing that's not where the real money is --
They own what's now JavaOne, which was SunOne, which was iPlanet, which was the Sun/Netscape Alliance products. iDS (iPlanet Directory Server) is a very good directory server. [okay, there's a few nice features in OpenLDAP that I wish they'd implement, such as being able to request '+' as an attribute list], and iWS [iPlanet Web Server] is a very stable product as well. I've never played with a production install of iMS (iPlanet Messaging Server), but it has the robust MTA from Sun Messaging Server [which was PMDF, a while back], combined with the message store from Netscape's mail server.
AOL may still hold the name 'Netscape', but that's just for the desktop products -- Sun basically owns the server products. And let's not forget the money they make from Solaris [which again, is a decent product, although I've only used 2.5 to 8... my only real complaint was the lack of support for group quotas]
And the reason that people buy Sun software when they can run NetBSD on the same hardware, with other open source applications? Because they can get support contracts -- SunPS [Sun Professional Services] will do just about everything for you, so you don't have to concentrate on the IT side -- you can just hand it over to Sun, and focus on whatever it takes for you to be a company.
Sure, there are applications where information can be well distributed over a cluster of systems -- but not every problem is unique. Some companies, for whatever reason (even if it's just management's penis envy), are going to go for big iron.
This report said that Sun was decreasing in revenue -- never did it say they were losing money. There's no reason for a company to kill itself off when it's still making a profit.
Sun's got enough arms out there, that I'm guessing they will never completely fold. They might cut off a part that they don't think they can save (like the SparcV development), but so long as one segment still makes a profit, they should stay in business.
[if for no other reason than we don't need all of their engineers fighting with the rest of the currently unemployed people for jobs]
Build it, and they will come^Hplain.
So I read the article, and was puzzled why a Forbes editor would ask a company with 13 billion in market capitalization to just fold up shop. So I googled on the author, Malone, and found some interesting gossip. He evidently went to elementary school with Steven Jobs. When Apple was on the outs (remember when Malone suggested Apple should just fold up shop?) Malone wrote a slanderously nasty book about Woz, Jobs, and apple. Here's a sample of from a web page that corrected some of Malone's numerous mistakes:
Malone, the editor of Forbes ASAP, reserves his most caustic remarks for Jobs, with whom he attended elementary school. He asserts that by the age of 19, Jobs had been ''involved in numerous felonies'' and was a drug user, bulimic, liar and cheat -- and went downhill from there. As the head of Apple, Malone says, Jobs was ''a lunatic megalomaniac,'' ''an executive horror and spoiled brat'' who was ''smelly,'' ''paranoid,'' ''vicious and belittling.''
http://www.xent.com/FoRK-archive/apr99/0054.html
Wow. The guy is a total tool. It's not like he wrote just one bad column in his life. Just going on what google kicks up, it seems like every week we puts his foot in his mouth. But I guess it's like Rush Limbaugh or Howard Stern. People don't necessarily like or agree with them, but tune in to listen to them make a complete train wreck out of journalism. It must be the same thing with Malone.
I guess it's one way to make a living. It probably pays better than other media-stunt professions like hosting Fead Factor, denying the moon landing, or mongering JFK conspiracy theories (or more recently, 9-11 conspiracy theories).
Just because a company is down-sizing or having to change with the times doesn't mean its going out of business. The server market has changed a lot in the past few years and Sun is just having a few re-building years. I think its way too early to say they should just close shop. Last I checked people are still buying their servers.
I was at Sun back in Feb. of 2003 and pointedly asked the speaker these questions - where were they going, what new products did they have and how were they going to deal with the rise of cheap servers/Linux.
After hearing the speaker waffle on about MadHatter, thin clients, new opportunities and that most-hated MBA word (and I'm an MBA) "monetizing" for about 10 minutes, I realized I already knew the answers to my questions.
At the short and informal reception following the speaker, an engineer who had sat on the panel (but didn't say anything during it) button-holed me to tell me that I had hit the nail right on the head - he said virtually all of Sun was trying to figure out the answers to my questions and as yet they did not have any answers.
Not much is sadder than the rusting hulk of a once great company in total denial.
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.
After getting hammered by the PC market, the comparison of Sun to DEC is a good one. They both were competing with Intel. DEC ended up selling the alpha to intel and having them produce it, ending the competition and settling a lawsuit over IP. The alpha was a great chip, too, but it's dead now.
Sun is also competing with intel and it's hurting them just like it hurt Apple. Businesses realize that they can buy 5 PC's for the price of one Sun, so even the awesome support sun offers pales when compared to the bottom line (provided you're saavy enough to swap a DIMM).
There is one hardware product that they will continue selling, IMHO. Sunrays. These machines rock. I'm using one right now. The footprint and lack of fans are awesome... my office is so quiet I can hear the fans in the machines across the hall and I barely even notice the space it takes up (about 12" x 6"). But this is not going to be enough to keep their thousands of employees.
Sun aquired Cobalt and their line of 1U RAQ servers and the Qube boxes, but has now EOL'd them.I don't think Sun knew how to market these after they aquired them.
Big MISTAKE, BIG!
I've been picking these things up cheap on EBay to do various things like web development, back up web, my own DNS server w/edited records to kill spam/ad/malware etc., email etc..
By developing a MediaQube Sun could come in put a box in the home with:
NAT
DHCP
Personal Email server
Personal Web server
HOME Video server
HOME Audio server
DVR backend with compatability to MythTV/KnoppMyth, those Happauge set top interface boxes
VPN for telecommuters and remote workers during imclement weather, part time workers
Home file server (NASRaQ)
One little MediaQUBE that even the clods at home can install & maintain and they could oust sleaszsoft and others media PC's.
Homes are becoming more and more reliant on some of the same technology that business has/now relies on daily. Especially as more and more homes move to broadband cable or xDSL access.
Put some of that brain power to work along with some decent Happaugge DVR350 cards, a decent DVB card for DBS DishNetwork users and this machine could rock. Simple plug up the connectors, and setup via the LCD like the RAQ/Qubes.
It also serves to get Johnny and/or Janey learning Linux! As mom & dad are going to turn it over to them to admin, unless their here already. Sooner or later they are going to want to learn its inner workings and tweak it. So they learn Linux and don't get sucked into the wimpdoze spell.
Recite after me:
MediaQube, MEDIAQube.
1311393600 - Back to Black
A fair enough assertion...what I meant was that, in a competing captilistic society, success is determined by acquiring wealth at a greater rate than your peers/competitors. If all peers accumulate wealth at the same rate, then wealth isn't really wealth...because you have not distanced yourself in any measurable way from your competitor. If you don't acquire wealth as fast as your competitor, eventually all resources will be poured into them (due to their larger ROI), and you will cease acquiring said wealth (cease making more than you spend). More wealth, in this context, is having more tangible assets than your peers.
That is the logical extreme and Corporate Darwinism in action. Of course in a large enough market, there is room for those that don't do as well as others, so long as they acquire wealth, as you pointed out. I was simply trying to explain the general mentality behind it.
Their customer support sucks. I say let Sun evaporite in a wave of Hawking radiation.
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.
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.
(and I suspect, soon, Motorola)? Motorola? Motor-ola?
They are leaders in embedded tech. What does the idiot think? That because Motorola is going to go broke because Apple is shifting a small volume over to IBM (lets face it, its a small volume, they're great but 5 million CPUs/year is a drop in Motorolla's bucket.)
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
Google spent... oh, roughly $100m in software development getting to the point that they were saving enough money by using the distributed low cost low reliability PCs. That is a huge barrier to entry on such largescale clusters.
And Google is in a business where a little data loss in the searches is not going to seriously harm anyone. So they operate slightly lossy. They admit this pretty explicitly; one of their people, Anurag Acharya, was an invited speaker at the second Evaluating and Architecting System dependabilitY symposium in 2002.
Neither the software investment to make reliable distributed apps nor the lossy data model are acceptable to typical business software. Do you want your bank losing 1-2% of your deposits, or having a consistency check error balancing your account at the end of the month? How about Amazon randomly deleting or inserting a few things from your orders...
And even where there is off the shelf distributed software like Oracle RAC, it's such a management and performance hit that people typically go back to buying larger single system image servers after testing it out... ask Oracle what percentage of their sales are RAC versus straight Oracle 9 some time.
There are applications... web farms spring to mind... where the Google model is a natural fit for the problem set. Strangely, that particular answer was well known five years ago, because people are not stupid.
Until every major business application is naturally and easily distributable larger servers will continue to sell. The software is just plain not there yet. Things are trending that direction; in ten years, the current model is in real serious trouble. Maybe sooner. But now? Don't believe dumb hype.
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.
Apple has moved into a post-Microsoft era with succesful consumer media products. There is absolutely no reason for these firms to merge.
I think it is important to see how Sun is doing comparatively...Sun's BETA vs. the S&P is 1.72. That's pretty good. Since the beginning of the year, their adjusted beta is 1.79.
They haven't had a profitable quarter since Q402, but they did breakeven in Q203 and Q303.
They have $3B in cash and marketable securities. They have $2.3B in accounts receivable. Not bad there either. They have $6.4B in total liabilities, but only $1.5B is long term debt. That leaves $6.4B in shareholder equity.
Their price/sales ratio is a measly 1.2. That's pretty low. Maybe the market is underestimating their chances? Or maybe it's the negative sales growth that is scaring people away?
Sun is usually bought for the high-end servers where Linux is not considered a good substitute. I like Linux, but if I need a 64 processor machine with over 200gigs of RAM, I'm buying a Sun. In fact, that's exactly what we use at my firm. We use Linux boxes too, but those are for smaller tasks. The majority of the heavy lifting is done with large, expensive machines like Sun Fire 15k machines. When we have a system problem, we need the machine backup pronto and it really needs to be able to handle the crisis. Suns do that well. So we continue to dish out $3mm per machine and have about 300 Suns in each datacenter. We have other vendors as well of course and quite a lot of other machines, but the Suns aren't going anywhere.
Now, I'm one of the first to say that Sun is losing a very large share of its market - the lower end. They just can't offer price-competitive counterings to Xeons and Opterons.
However, they've still got the most lucrative part of their market, the ultra-high end. With their big models starting out at about a million bucks (and that's FAR from fully equipped), they've still got plenty to keep them going.
There are still lots of apps that don't cluster well, so a room full of PC's just doesn't cut it. and there are still companies willing to shell out for the hardware they need. Sun will have to scale back on the low end, there's no doubt, but that's not a problem for them. They've always preferred to make a large profit margin on smaller volume.
steve
Oh, you're not stuck, you're just unable to let go of the onion rings.
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.
I don't know if Java is a relevant source of income to Sun. I would think rather that it's a drain. It may be that the only value Sun gets from Java is brand name recognition. That in itself is worth a great deal, as it helps you sell other things that aren't a drain. However, that is only true if a competitor doesn't come along to duplicate and improve the Java technology with a catchy, if familiar, name to developers. Also, it wouldn't help if they do you one better and actually establish the clone as an official standard. If the clone should become a standard, it's entirely plausible that Open Source implementations would arise, giving developers Java without the name.
What would be even worse is that if those Open Source guys happen to decide to use the same bullet-proofing that allows the Linux juggernaut to currently cause havoc with Sun's UNIX businesses. You know that killer app that isn't an app, but a license called the GPL. We know the GPL eats competing proprietary licenses for appetizers, and the products attached to them as entrées. I think Sun's main competitor (now bosom-buddy) called it a virus, and are clearly afraid of it as they're the next course on the menu.
No, as long as those things don't happen, Sun should be able to continue on as it has for the past several years without worrying about their product being usurped from under them, and under a different name. No point heading off the disaster as long as such clearly ridiculous fantasies don't come to pass. Even if it would really cost them nothing (just save them a bunch on development and administration cost), and they would still be able to retain the brand name (the only value Java adds to Sun) while Open Sourcing Java.
If they GPL/LGPL'd it, their fears of permanent forking and the product being locked into proprietary platforms would all vanish. And, similar to Linus, they retain brand name, copyright,trademarks and control over the name. The JCP process would remain the defacto standard.
= 9J =
Look, if you don't like SUN sell your stock in the company. Sun has owners/investors, it's up to them whether or not they still want to invest in Sun and they can decide on an individual basis. It's called the stock market.
Calls for a company to fold are FUD, pure and simple, usually this FUD comes from someone who doesn't have a cent invested in the company and therefore no direct meaningful interest or someone shilling for the competition.
They said the same thing about Apple just before Steve Jobs brought them back from the dead.
If you want Sun to fold sell your stock and go away quietly, if you don't own stock then what is your real motivation in wanting them to fold? It certainly isn't the financial interest as an investor which is the only legitimate cause for the call.
big iron box mainframes are still sold because clusters of smaller machines don't have the sheer transactional IO that some jobs require. Financial services come to mind. Not much CPU power is required (mainly just some simple math), but when you need to reliably and quickly update millions (or billions) of small independent records, you need serious IO channels to and from memory, a huge disk-buffering system and dedicated hardware to maintaining transaction integrity. All that is better done in a big box where the IO channels are short runs (and in fact, may be all but impossible to do it any other way)
Clustering work well on big CPU intensive jobs that can be parallelized and you're generally doing more CPU work than IO.
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If I want to grow to a 12 or 16 way machine, from Sun, I have to BUY a 12 or 16 way chassis. Even with 2 or 4 CPUs.
Linux clusters are a great marketing word, but if you have a cluster that can do what my 12 and 16 way Oracle servers can do, let me know.
"Linux CLusters" that I've seen were all MATH clusters.
I expect that the SPARC will die and sun will be offering 4 and 8 way Athlon64 boxes REALLY soon.
Sun has (cray derived) backplane switches (not available on PCs), TREMENDOUS I/O possible. and finally some decent PCI, but even on a lame PCI E4500, I have SEVERAL separate Busses. My 4-way Intel boxes have, er 1 PCI buss. great.
Ever pull a processor board from a running PC? and it kept running?
Me neither.
Now sun's competition on cool features is SGI. Take a gang (32 of, max) 4-way SGI's and join them into a single box. scales a LOT better. But SGI isn't going to kick anyone's ass.
Won't the world be boring when nobody innovates in computers. When "BIOS"s are how people think computers should boot. (and mcneely might eat in a New Deli, but it might be in New Delhi)
Why does nobody mention the high end stuff that Sun has like the E10K's or E12K's, There are some very demmanding applications that require loads of memory and processing power that I would just _not_ trust linux with. I work for a telco equipment manufacturer and we use these babies for a lot of the accounting and billing stuff, one good example is an E12K with 10 gigs of ram and something like 132 CPU's which can handle over 1 million prepaid call authorization transactions per _second_ for a mobile phone network. Try doing that with a Linux cluster, not to mention that Sun has some pretty good support options, altho expensive it is something Linux largely lacks, that thing called accountability that managers like so much. They may have lost it in the lower end but there is still a big market for the higher end and Sun's hardware is pretty sweet. /g.
Finally Apple is not the company slowly dying...
Why doesn't anything interesting happen when I have mod points?
I worked for Sun for a while last year as part of an internship.
I saw a lot of problems, and they still have a lot of dead weight in terms of staff, but they really do seem to have a plan.
The N1/Grid stuff is a big part of where it is at. Grid in particular, since it works NOW it great. It's also open source. (Search for Sun Grid Engine)
Perhaps the most iumportant thing though is that Sun is the only major company with multi core CPU's in the pipeline.
It takes a long time to design a chip and get it into production. Sun are the only big company that is pushing for multi-core architecture. 32 systems on a single ship makes the price suddenly insanely good. And Sun are hte only ones doing it.
N1, Java, the Java desktop,multi-coreCPU's and Grid are the main reasons why Sun is going to stay around.
At the same time, they perhaps need to pay a little more attention to their engineers and the fact that they may need some help with understanding what it is they are supposed to be developing.
I attended a meeting with Johnathan Schwartz, then head of software (he's been promoted now.) and a bunch of engineers in Menlo Park. One guy asked about Sun's fiscal policy - what kinds of things should we focus on? What kinds of things are most important to our customers?
Mr. Schwartz's answer was "You don't need to worry about that." and then said something to the effect of (not a direct quote) "Just do your job, leave the rest of it to us, focus on whatewver your manager tells you to do."
The emphasis was on having the engineers build great systems, not on having the engineers build great systems that make money.
*sigh*
Lots of incompetence in my time there, but lots of amazing engineers as well. If they would simply stop isolating engineers from business descisions, Sun could be great again.
Fujistsu has a large stake in Sun and has bought other Sparc companies (Ross Technologies, and HAL)... and I think Amdahl. Fujitsu also builds super high end servers (128+ processor).
But... Sun has a great track record of bouncing back when everyone thinks they are down for the count. In the early 90's things did not look good and the company came roaring back in the mid-to-late 90's.
I think the article was poorly written and provided no data to back up the authors position
GigantanKramePithicus
If you remember. Not everyone at DEC lost their jobs. No no reason to fold - someone will buy them.
Give a man a fish and you have fed him for today. Teach a man to fish, and he'll say "WHERE'S MY FISH, YOU IDIOT?"
I'm going to assume the Extra Large 440 here with the following specs
Sun Fire V440 Server
Dell PowerEdge 6600
Total Xeon based savings in our little HORRIBLY INACCURATE study $50,449
However we all know that most people buying Sun software don't care about the price so there is no point anyways.