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Sun Microsystems, a CEO's Last Stand?
pillageplunder writes "Businessweek's cover article is a sharp look at Sun Microsystems. The gist of the article? That its fall can be laid at the Feet of its CEO, Scott McNealy. Overall, a balanced read, one that does a good recap of the the high and the very low low's that Sun has reached under McNealy."
This is starting to get as funny as "This is the year of Linux on the desktop," but while we get those articles once a year, we get Sun-is-dying articles on a monthly basis. It isn't going to happen anytime in the near future guys, no matter how many times you write articles that lack any supporting information in the hopes of someone viewing your BusinessWeek site.
Interested in open source engine management for your Subaru?
At the various conferences and other tech events I go to, I've met many Sun and Microsoft employees. One thing that really strikes me is that I've yet to meet a Sun employee younger than about 35, but I've also never met a Microsoft employee (other than an executive) over 35. I think this creates problems for both companies.
It makes some broad brush statements about Java facilitating sales of Sun's big boxes. This just isn't so. Java had nothing to do with it. There was a time, early on in the commercialization of the Internet, that you bought Sun if you wanted a reliable web server. That's what sold Sun boxes. This is long over, however.
IBM Global Services pulled the plug on its Sun hosting somewhere around June 2001 - that was the first sign of things to come. A whole side of a huge server room populated with disconnected Sun boxes waiting for collection and ultimate resale, i'm sure. Did not bode well for Sun.
The Army is not using Sun boxes for critical systems anymore - the last dozen-odd projects I have seen have been Win32 or even Linux in basis. Lots of junk Sun equipment floating around, whether on Ebay or in storage closets.
The company is ultimately dead unless it reinvents itself - that is true enough. Saying that Java or R&D expenditures have anything to do with it is sophistry. The elimination of the value added associated with Sun's gear in real world applications is the reason why the company (as currently constituted) is doomed. There's just not enough difference between what they offer and what is offered for a much lower price point by other vendors.
They do have many quarters worth of cash to lose, of course. It isn't going to happen tomorrow, but they are rapidly becoming irrelevant, even if they still exist.
HBI's Law: Frequency of calling others Nazis is directly correlated with the likelihood of the accuser being Communist.
I work in an environment that has roughly 4k+ UNIX servers, 90% of them are ALL SUN. I don't see them going away anytime soon. More Slashdot FUD Please.....
They have $7 BILLION in cash in the bank right now, have a strong R&D budget.
Take a look at their P&L's. Seven billion doesn't last that long with a company that size if you're not making money.
They're not going anywhere. Either is McNealy.
That's exactly the problem, if you read the article. I hope some of that new research on running multiple tasks simultaneously works out for them.
However, I think a billion spent on cluster computing would be a better bet. I think they were going in the right direction with the hot desktop switching. They just need to take it to the next level. A PC is more than a screen and a keyboard+mouse.
We have scanners, CD burners, webcams, and all kinds of other peripherals we want to use. Give me all that, and give me reliable access to my applications (office, ERP, calendars, development tools, etc. served off off a big fault-tolerant cluster) and now you're talking.
Sun will ultimately go out of business if none of their new projects is a big success.
But they have A LOT of innovative new projects and they have the money, time, and culture to start a lot more. Betting against all of them seems unwise.
In related news (for real), Sun's COO Jonathon Schwartz has just recently started his blog.
Bruce
Bruce Perens.
The company I came to work for in 1994 was a training partner with SUN. We taught SUN classes; system admin, maintenance, some programming, etc. In 1995 Java came on the scene and we ramped up to teach that too. The demand for SUN instruction boomed so much we eventually branched out into 8 other locations around the country and the money was just pouring in. We almost had to beat back excess students with a stick. SUN also had their own training centers, but we (along with other training partners) got a lot of the overflow, or students who couldn't travel to SUN sites. (SUN did certify us as qualified instructors, if you must ask, and we often travelled to teach in their centers).
When the dot-com bust came, it came hard on training. Nobody wanted to learn any more. Most all of the training partners folded, and SUN absorbed a few of the more profitable ones for itself. Eventually, SUN divested itself of the education part and sold it off to a 3rd party named Accenture, while keeping only 3 centers for themselves (San Jose, Broomfield CO, and Burlington MA). Accenture has many of the other former SUN sites, and there are still a few struggling and starving training partners waiting for an upturn.
The demand for training is ever so slowly and painfully rising, about as fast as SUN's fortunes are now. But the heyday of the late '90s is long gone. And most of the instructors I personally knew were either released or they quit. These were some mighty bright people, too-- it was hard to see them go.
My outlook is wait and see. I myself am hibernating while teaching at a local technical college. Maybe things will get better, maybe they won't. Time will tell.
Distribute all the cash and sales proceeds from their stuff to the employees and shareholders and then just close down. Then people can get back together and do something more promising. Why let good money go to waste.
Most computers are workstations and Sun's workstations have no chance against Dell. Apple is a "higher-quality" niche player, spends good money on R&D and has a good head start. What is Sun going to offer to get even 1% of the market?
Now the problem is that people want servers to be extensions of their workstations, not something totally different. Same UI for management, interoperable applications from the same vendors, one place to call for support and so on. Windows-based servers and to some degree XServe fit this model well. I wonder how Sun will address this problem. Even IBM better make sure that their Linux servers remain cheaper/more stable than Windows. You know, you could just run Apache on Win server and firewall everything except port 80. Instant security! I am sure Linux is currently better at multitasking/SMP but on the other hand driver support sucks (want to do some server-side rendering using your ATI video card?) and Microsoft will not sit still forever on performance.
One thing I don't get about Sun is how they operate in the PC market. They got the high end, workstation market nailed down during the Internet boom, but one would realize quickly that Sun would need a strategy to deal with the PC market. PC performances approach much faster to what a workstation is supposed to be a few years ago than workstation performances do to the next level at fractions of the cost. It should have been done a long time ago. Not seeing that is pretty myopic of McNeal, I'd say.
Not only that McNeal failed to make good strategic alliances. He is too preoccupied with Microsoft. Does anyone here realize that when a company is preoccupied with MS, they lose? One loses the focus one needs to innovate and instead, tries to survive by cutting costs something the likes of Microsoft and Dell can easily deal with since they have the volume. I thought a long time ago that Apple and Sun should have made great partners since some of their philosophies were similar. But, as much as McNealy hates Gates, he views Apple-Sun alliance as cumbersome. Notice how Sun release JVM for Wintel and not for Mac OS X? Star Office for Wintel and not for Mac OS X? You'd think that when you are threatened by microsoft, you'd need as many friends as you can gather.
I was there when the stock quadrupled in value, split and quadrupled again and split again. I even made some money along the way. Some of our machines were big hits and we helped change the industry, if not the world in sorts.
I was also there for the big turnaround, When we, the design engineers didnt' deliver such hot products as we did in the mid 90's. There is a lot that contributed to that, but I won't go into my opinions on the matter.
I just want to say when the economy and market turned vicious on us, McNealy stood up and said "look, you guys invested alot of time in this company and brought us to where we were. Now we're here, the market isn't right, you guys have developed the best machines you could, but the market isn't right. But I'm not going to let you sit there and cry. Sun's invested alot in you, Sun's invested alot in R&D. Sun's going to protect it's investment in you and protect it's investment in R&D. You are Sun's richest resource and R&D is our future. We have umpty ump billions in the cash and we can hold out and forge ahead with no layoffs and continue our R&D".
That was before the first RIF 3 years ago. Since then Sun has had 5 RIFS and I can attest that every RIF'ed employee over that time, was RIF'ed grudgingly. Every project that was cancelled -- was done so because our executive management felt it wasn't going to meet the market demand or window. And I've no reason to doubt them. I didn't doubt them when we where high flying, and I'm not going to when times are tough.
Management that recognizes that I've made investments in them, as well as they've made investments in me and treat me like an asset -- is the type of management I want to work for.
So eat your hearts out. I work for a CEO that smart and daring and willing to take risks and make good gambles, while at the same time doing his darned best that I have a job with good benefits and strong and healthy corporate culture.
OTOH, people like us are viewed as "resources". Therefore, we can be replaced, upgraded, downgraded, or simply pitched out like used up garbage. We have the skills, but not the connections. The people who have the connections frequently don't have the skills to evaluate OUR skills because they were hired, again, because of their little piece of paper rather than promoted because of what they proved they knew.
And yet because of business you can get a job that pays $75,000 a year, have cheap commodity hardware to play on, and live in a world largely shaped by the efforts of 'people like us'.
Look, of course business has a tendency towards evil. It's sad that the most altruistic and non-money-oriented people don't get paid more, but the truth is as immutable as a physical law: People with lots of money and power are generally that way because they pursue it. Sure they need us to have power, and it's a bit of a good ol' boys club, but we are all complicit because a) we are not so power hungry, and b) they give us cool stuff.
I know it's frustrating to be viewed as nothing more than a cog, but don't let it bother you. The powerful few view everyone this way, and why not? They couldn't run a business if they took the time to know how to evaluate every type of employee. You can take consolation in the fact that they are no more likely to be happy then you are, and probably have a much higher stress-level. They are surrounded by sharks day in and day out, and may have a very difficult time discovering who their true friends are (if any).
Bottom line is, we didn't choose this career for money and peer recognition is more important than manager recognition anyway. If they knew what you knew they wouldn't need you, so be thankful you have a job doing something you love. This is a pretty unique time in history as far as that goes.
Ultimately, Sun is doomed. It has carved itself out a niche between IBM's big-iron machines and Dell's cheap-iron ones, but the gap in which Sun lives is rapidly narrowing. Even Apple is taking sales away from them, and if that happens, you know you're in trouble. As for Java...well, it's a good language and portable, too, but the coming onslaught of .NET is only going to hurt Sun more.
This means that Sun no longer has an edge it can use to drive a wedge between Dell, Microsoft, Apple and IBM, all of whom are rapidly closing in on it like a pack of wolves. Ultimately, Sun will go the way of Netscape (except that in Sun's case, it will be the rest of the industry crushing them instead of just MSFT). If they're smart, they'll open-source Java, because that's the only way I can think of for there to be something left of them once the company is gone.
I'm just waiting for the inevitable comparison of a company that went higher and higher up-market until there was nowhere to go.
In the meantime, the lower, broader-based competition ate their potential market by coming out with new competitively attactive, but not forward looking, product.
So called innovators in computing are just commiditizers. The difference is that now the time gap between innovation, read profit, and commodity , read cheap-ass knock-off, is shrinking (which USED to be the purpose of a patent system.)
Sun is not a viable company in the long term unless the do what Apple did and head in another direction.
MSBPodcast.com The opinions expressed here are my own. If you don't like 'em... Think up your own stuff.
"Solaris is still superior to Linux in many ways, but Linux is just as good or better for the vast majority of the market. If they were priced equally (TCO- admins, hardware, and software combined), Solaris would still be holding on. They aren't. It isn't."
Eh? Have you actualy priced Solaris vs. Linux? If you want to get a supported distro (which you *need* if you're running something like Oracle, otherwise you can't get their support), Solaris actually costs out cheaper. And TCO is generally in Solaris' favor, too. In fact, if you get an un-supported distro, TCO probably tips immediately over to Solaris.
I expect to get a lot of pushback on the last -- "but I download Linux and it magically works on my iron for my app!" It's not been my experience, nor has it been the experience of much of anyone in the real world I've talked to. Much hand-holding, tinkering, downloading, recompiling required. When was the last time I had to recompile a Sun kernel to get something to work? 1992?
I suspect my story isn't that much different from a bunch of /. readers:
... there's some feedback for you, Mr. McNealy.
... McNealy should've seen this coming, once NT boxes started eating SGI's shorts. It was clear that as soon as PCs and even Macs started to leap-frog UltraSPARC in the performance dept. that his on-the-user's-desktop Workstation business was toast, and that low-end much-cheaper PCs that ran anything close enough to Solaris (read: Linux) to "get the job done" ("works well enough") would eat his shorts in the low-end server dept.
I work at a U.S. Government lab. Starting 11 years ago our Section's main product, a huge image processing package used at the lab and elsewhere, was originally ported from VMS to UNIX - first to SunOS 4, then of course to Solaris 2 and IRIX and HP-UX.
Over time, the IRIX and HP-UX ports were dropped due to lack of demand, and of course sooner or later a Linux port emerged as we saw demand for it from our customers. In the course of these 11 years we've gone from being a mostly-Sun shop with an SGI or 3 and an HP-UX box to having probably tripled or quadrupled in size - with mostly Linux servers and Linux-based RAID boxes nowadays, with the remainder being Suns (and 2 Xserves).
To me, Linux on commodity PCs is the Windows of the server room - it's not necessarily the prettiest, it's not necessarily the most robust (we're having problems with our 3Ware/Linux-based RAID boxes losing power supplies - gee, our NetApp never did that), but it's the cheapest and it "works well enough" for most needs that it's the clear default choice unless requirements dictate that we need something bigger.
5 years ago we went through a "Desktop replacement" where we replaced everyone's SPARCstation 10's and 20's with Ultra 5's. Some of those boxes are still in daily use now. But in the meantime, everyone's gotten their own PC or Mac on their desk as well. It's time to get rid of the Ultra 5's for good, and our solution was - don't replace them at all, just get rid of them.
So, we're moving to a server farm based solution - you want to build your Solaris port of your code? OK, log onto our server farm, run it there, if it's X, run it there and pop the window back up on your Mac running OS X's X11 or on your PC running Hummingbird or whatever, we don't care. We started looking into the Grid Engine stuff, but it's too loosely-coupled for this kind of thing - we want the rack of SunFire V240's to look like one computer for "logging into Solaris", as viewed from the desktop, and we were shocked to learn that our Sun software field engineer had never heard of Sun Cluster being used in such a manner - what, you mean you're not running some "service" that needs to be persistent and HA? You just want all these machines to look like a single Black Box? It totally threw him off
Anyway
People don't have allegiances to companies - they have allegiances to solutions that have software that "works well enough" and at the lowest price point where they can achieve their goals, hardware and software-wise. In that sense, I don't think McNealy could've done much - there's simply no way he could compete with the oncoming PC/Linux juggernaut. It satisfies peoples' base requirements too well now. He can't compete with Dell in price because of margins and their off-the-shelf-ness.
What annoys me about the article itself, however, is that it lays the blame at McNealy's feet for all of this - not once does it really get into the whole issue of what the *customers* want, what the customers (of all computer vendors) decided they wanted to buy. The article (as they all do) spends too much time talking to ex-company execs and analysts - what was there, maybe one quote from an IT manager?
In other words, the article seems to be all about how Scott f****ed up - but to me, from where I sit, the vast majority of the reasons for why things are the way they are were things that were beyond Scott's