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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?"
They should acquire BSD, which will teach them how to continue dying... forever.
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."
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
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.
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.
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.
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.
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.
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).
It's not about speed. It's about reliability.
-30-
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.
Sun is a Unix vendor. SCO is suing people with any connection to Unix. Linux, because it resembles Unix (plus some spurious claims about code in the kernel); IBM because of AIX; Daimler Chrysler and Autozone because they used to use Unix systems and ported those systems to Linux.
Right now there are two mainstream platforms: POSIX and Windows. SCO's actions may be primarily directed at Linux and GNU/Linux, but do not for a second believe that SCO isn't harming the entire POSIX sphere, and that includes Sun.
You are not alone. This is not normal. None of this is normal.
Just MHO.
Check out my sci-fi/humor trilogy at PatriotsBooks.
"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."
Actually, they do. Sun just certified one of their x86 servers with Windows
, and announced plans to certify ALL of their x86/Opteron hardware to work with Windows.
IMHO this could be the thing that saves Sun, because one reason many people stick with Sun is the quality of Sun support, which has always been some of the best technical support available. Now you can buy your Windows/Linux/UNIX hardware from one vendor, and know that you will get great support with a fast turn-around, and not end up on the phone talking to Apu in Bangalore.
Of course, given that some companies are opting to just make all of the x86 hardware disposable due to low per-unit costs, this might be a moot point. But then again, when a strange problem pops up in every machine in your 1,000 system cluster, you probably don't want to be dealing with a vendor who has cruddy support services.
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.
Just a back up to the pp.
Apple doesn't scale because you can't put a large number of chips in the same box. x86 isn't as limited, but it's not great either.
As you add processors, there is a diminishing return on inverstment with each one. iow, two uniprocessor boxes will be able to do more work than one dual box, however they cannot operate on the same data at the same time (I know beowulf, etc. give me a break). In some cases, one box with n chips will outperform a box with n+1 chips.
On Sun hardware, this difference is less than on apple and x86 hardware.
Sun's architecture is designed from the ground up to have a bunch of processors in the same box. This is part of the reason that their uni boxen are unimpressive performance wise. Scalability sometimes hurts small scale performance(Think using Oracle/MySQL/PGSQL for a table with 100 rows. Sorting and binary search would be faster).
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.
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 =
Ok, so let's compare. Let's compare a Sun Fire V440 and a HP DL580 G2. Let's assume each is equipped with 4 top end CPU's, 8GB memory, dual Gigabit NIC's, 2x36GB disks, and a DVD-ROM drive on each -- sounds like a fairly standard server configuration to me.
Price
The V440 is more than 50% less!!!!!!!!! Ok, let's go to performance. Going to use the SPEC CPU2000 info for the DL580 G2 3.0GHz Xeons and going to use the Sun Fire V250 config mutltiple by 1.8 (since Sun has not yet releaed info on the 4-way V440 with the same 1.28GHz US IIIi CPU's tha the V250 has). (Listing below represents Cint2000/Cfp2000/Cint2000 rate/Cfp2000 rate).
Performance
Hmmmmm....two things jump out at me here -- the UltraSPARC IIIi is lousy at integer math, while the Xeon is lousy at floating point math. Either way, the 3.0GHz Xeon, which represents a clock speed difference of 234% greater than the US IIIi, only performs better than it by 28.7%. Increasing the CPU to 1.7GHz or going to US IV CPU's as Sun plans to do with the upcoming V490 will close the gap.
So overall, for 109.6% of the price of a V440, you're only getting 28.7% of the performance. Umm....what was your original point?
Rule #1 -- Politics always trumps technology.