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Ex-Sun CEO Warns Oracle of Death By Open Source
gearystwatcher writes "Former Sun CEO Scott McNealy talks to The Reg on where things went wrong, and acquisition by Oracle: 'We probably got a little too aggressive near the end and probably open sourced too much and tried too hard to appease the community and tried too hard to share,' McNealy said. 'You gotta take care of your shareholders or you end up very vulnerable like we got. We were a wonderful acquisition — we got stolen for a song at the bottom of the Dow.'"
Definitely, if all the valuable assets of your business is in software (Solaris, StarOffice, Java, etc) and you give away such software for free then your business does not make sense at all.
Ubuntu is an African word meaning 'I can't configure Debian'
Right, the only mistake Sun did was open-source too much. Like all the closed shop were doing wonderfully well too.
Thanks Sun.
I need another CEO job and I can't get one!
Have you fscked your local propeller head today?
"...while he's never read Atlas Shrugged, McNealy cites its author Ayn Rand as his mentor while he was growing up. Rand is a hero to those on the political right "
Interesting...
He who knows best knows how little he knows. - Thomas Jefferson
Sun's biggest problem was that its various flagship products were out-competed or unprofitable. On the high end hardware, IBM could build better mainframes. On the lower end hardware, Dell could build cheaper workstations and servers. On their Unix, Linux became as good as or better than Solaris. And Java, while nifty, had no way of turning a profit.
By open-sourcing its software offerings, Sun ensured that while its business was screwed, its legacy lives on.
I am officially gone from
> We were a wonderful acquisition — we got stolen for a song at the bottom of the Dow
Translation (spin removal) - I screwed up - and would now like to thank the Gods for my "golden parachute". Since I think a suitable time period has passed (hey, it's 2010 and people have an attention span of 2 minutes or less, besides nobody who will live much longer than another 2-3 years even knows who Bill Joy, or a SPARC let alone a 360 was), it is okay for me to now attempt to twist and distort history so the world doesn't remember me as "the bloke who fsked up, big time and killed off one of the last bastilions of real technical people who "got it"."
- Yeah, I fsked up BIG TIME, but you can' t prove it and my name isn't Julian Assange, so after tomorrow you won't remember anyway.
> with total knowledge of the company's inner workings and financial statements ...who ran the company into the ground.
> with no business/management experience whatsoever are.
Of course that is blatantly untrue. We are not without experience. We have
the most relevant experience of all. We're the ones who have been in the trenches
watching as Sun did this to itself.
We are Sun's customers.
Of course in your sort of MBA-cult mentality the actual customers don't care.
A Pirate and a Puritan look the same on a balance sheet.
That's strange. Red Hat does all via Open Source and is about to pass the $1 Billion mark. Sounds like to me McNeally was a very poor CEO and it had nothing to do with the things they Open Sourced.
My karma is not a Chameleon.
Right, the only mistake Sun did was open-source too much. Like all the closed shop were doing wonderfully well too.
The summary is incomplete. Somewhere else in the interview he mentions that one of his regrets is not open sourcing Solaris earlier, claiming it was better than, and could have beaten Linux. His point is that they didn't have a good business model and didn't make enough money from the open source, but he also clearly still believes open source can be profitable, and open source was the right direction for Sun.
I notice that your Slashdot UID is 1378985. You have clearly concluded that there are almost 1 and 1/2 million Slashdot readers, all of whom have no business experience and troll from their basement. This in spite of numerous recent articles about the fact that the mass of linux kernel and other major Open Source project developers are paid developers, many of whom work for very big name companies in the high technology industry. You have clearly forgotten who has the experience to analyze McNealy's position, and whom the guy without the experience opening his mouth out of turn is.
News Flash: There are many, many, many people in the world more qualified to analyze where Sun went wrong with their approach to Open Source than Larry Ellison and Scott McNealy, and some of them are right here on Slashdot. In fact, the decline of Sun could be viewed as specific evidence that there was a lack of understanding about Open Source on his part. HP, IBM, Intel, and many other big name hardware/software companies seem to have managed to keep on without losing their shirt in the process, for example.
Guns don't kill people; Physics kills people! - John Lithgow as Dick Solomon on Third Rock From The Sun
Google is doing it right. Its google-docs does not do much, in terms of bells and whistles it pales when compared to Ms-Office. But it is well positioned based on a simple truth. 90% of the people need only 10% of the features of full fledged Ms-Office. Give that 10% free and effectively deny Ms-Office the mind-share of 90% of the people. Force Microsoft to interoperate with a significant part of this 90%. Give customers of Microsoft some ammunition in price negotiation. Anything that will make Microsoft play defense in the Office arena, is the resource it can not spend in fighting Google. It is ably helped by Microsoft that has promoted to leading positions people who won the corporate desktop market. Like Civil War generals fighting the war using Napoleonic tactics against machine guns, or the WW-I generals fighting that war using Civil War lessons, the management of Microsoft is fighting the consumer market war using corporate desktop war tactics.
Coming back to Sun, it was effectively done in by amortization. The cost of development and research of intel chips was spread over so many more customers compared to the sparc chips. The same way cost of development of Windows was spread over a much larger number of customers. When there is an order of magnitude difference between you and your competitor in terms of potential for amortization of cost of R&D, you should have the vision to react early and react decisively. For all the high salaries paid to these MBA types, they did not see it coming.
I'll grant you I am Monday-morning-quarter-backing. But I not getting Sunday-after-noon-quarterbacking salaries either. Scott McNealy got paid to see this coming. He failed. Miserably.
sed -e 's/Chuck Norris/Rajnikant/g' joke > fact
It seemed to me that Java was one of Sun's biggest problems. Sun managed Java badly, and that bad management was very bad public relations.
I'm not an expert and I don't follow these things so take my opinion as is.
I remember people talking in the early 2000s when Sun was trying to be the "dot in the dotcom" that Sun lost to linux. Many companies simply didn't need a big Sun box and now that they could get something unixy on a box more appropriate to their business that is what they did.
That could have happened if a proprietary business one day saw a niche for a unix operating system on a small machine.
Sun was all about selling big machines and their OS for those big machines.
Aside from that, I think he has a good point about thinking carefully when aiming the open source gun.
Many companies make it hard to buy something...at least for programmers.
If somebody can download something for free and have it work fine, they will not bother to go through the channels in their company to get them to buy something.
Sun succumbed to the same thing that felled SGI, namely the boom in commodity computing. Sun made some really great products, the problem was that they also that made products that were really expensive. Back in the day when the difference between the high end and commodity was significant enough that a lot of companies were willing to shell out the money for the primo shit. However so called "commodity" computing(both hardware and software) has eventually caught up and a lot of companies could no longer rationalize the difference between Sun's stuff and the much cheaper products.
For instance 2 years ago we were looking for a new RAID and were considering Sun's ZFS storage appliance but the $10k for 2 tb was just waaaay to much money for the tiny extra bit of redundancy we could get. It was cheaper to just buy a much bigger raid, split it in 2, and do an rsync. Not the greatest situation in the world, but ultimately it saves a lot of money. Sun just could not compete for anything but a relatively tiny niche market while having massive amounts of capital tied up in labor and facilities.
Monstar L
Oh, my bad, turns out that the muppet in the summary actually is McNealy not Schwartz. Sorry. Now that's even more fun. As I was saying, McNealy is the guy who was just foaming at the mouth against Microsoft and was having split personality fits about Linux and OSS, while Sun was pretty much imploded. There were people jumping ship _because_ Sun had abandoned almost any pretense of having a product to sell, and was just telling everyone why they should give it money to fight Microsoft.
And who alienated the very same OSS gang he now talks about, with his schizophrenic swings between professing his love for OSS and Linux in the morning, and foaming at the mouth against it in the evening. I don't think that guy ever really either understood OSS or embraced it half as much as he tries to make it sound.
It's like, dunno, take my criticism of Schwartz above and make it times ten.
A polar bear is a cartesian bear after a coordinate transform.
Red Hat does quite well giving away its open source OS and apps as fast as it can. That's not what devalued Sun.
What devalued Sun was that its CEO, McNealy, was unable to run such a company. He kept proprietary products like Solaris propped up for years longer than they had a market among competitors like Windows and Linux, even as primary competitor IBM deprecated its proprietary OSes to embrace them both. Then McNealy punted on Solaris, opening its source only when there was no demand for it. Sun's Solaris business didn't get taken by competitors copying Solaris' source or anything like that. In fact, opening the source kept it going for years, even if it was too little, too late to save it. Especially with the CEO failing to actually embrace open source, but rather seeing it as a dumping ground for nonproductive assets instead of a hothouse to grow those assets into productive centers to be monetized.
McNealy is like any failed CEO whose failure was trying to control something better developed by letting it go more: blame the "liberals" ("liberal" means "free from control"). If McNealy can blame open source for his own failures, he might find new income from the many other incompetent businesses that need a scapegoat like open source to hide their own failures. And in today's corporate world, especially America's, there is no higher demand for anything than for a scapegoat.
--
make install -not war
So when he said "We probably got a little too aggressive near the end and probably open sourced too much and tried too hard to appease the community and tried too hard to share" he was just lying like a weasel, as his contradictory hindsight also says he should have done more of what he did "too much".
Open source wasn't the problem, as he freely admits. Doing it too late was the problem. By the time it was "near the end" it was too late to "take care of the shareholders" by doing anything different. Open source was the only thing keeping Sun relevant near the end, and therefore the only thing taking care of the shareholders.
McNealy screwed up, as everyone watching Solaris sink could tell. He should have opened the Solaris source, ported it to Java running on every CPU but optimized for highest speed on Sparc - and then maybe Xeon. Should have made Java applets actually work on every CPU/OS/browser, the way Adobe did Flash, and bought Macromedia instead of Adobe getting it - or just competing with it. So many things he could have done if he'd managed for the 2000s instead of the early 1990s. Now he's just a whiner whose day is long gone.
--
make install -not war
I don't think it's even about rich or non-rich. What Ayn Rand does isn't as much a defense of being rich, as a defense of psychopathy and of not giving a damn about the others or their well being.
And while in her writing she does somewhat tone it down, in her diary she was going all fangirl over people like William Edward Hickman. That was her ideal of superman and she loved a quote from him saying "what is good for me is right."
Just to make it clear, what William Edward Hickman was famous for was kidnapping a schoolgirl and mailing her father taunting ransom notes signed with names like "Fate" or "Death". Then when the father came with the money, and thought he saw his girl sleeping in the abductor's car, she got thrown out of the car... dead. Hickman had cut off her limbs -- by his own testimony, _alive_, as the blood was coming out in small spurts, i.e., the heart was still beating -- hollowed out her torso and strewn her inner organs all over town. Actually living out an earlier fantasy he had told a former accomplice about, to take someone apart and chuck bits of them all over town.
Ayn Rand thought Hickman was some kind of dashing romantic adventurer whose only "crime" was rejecting the unreasonable conformism of society. (Like, you know, not taking live children apart.) She pretty much foamed at the mouth against those boring sheeples who dared so self-righteously criticize her hero. A bit later she blames society for basically not offering him anything better to do than gut and dismember a little girl. I mean what was the poor guy supposed to do? Get a boring job and a boring wife and all that? No, really. That's her justification for Hickman.
And really, that's what her writing is about. Even the economic angle is Bullshit with a capital B. I mean, her utopia needs an infinite free energy source to even function. But she manages to do a heck of a job in lionizing the psychopaths who doesn't give a damn about anyone else, and calling those "statists" and "collectivists" names, and fantasizing about their destruction.
Now consider that a large number of those at the top _are_ psychopaths. See, for example: Is Your Boss A Psychopaths?
If you were one, wouldn't you just _love_ a philosophy that says it's just normal to not give a damn about anyone else, and that it's an _objective_ (or Objectivist) fact that it's all about caring for number one?
A polar bear is a cartesian bear after a coordinate transform.
Actually Alan Greenspan knew her personally, and was part of "The Collective" when she was still living. He didn't become Fed Chairman until five years after her death. There are a lot of Objectivists who called him a sellout for being party to the fiat system, and his response was that he "had to make compromises." Saying that Greenspan was "a big fan" of Ayn Rand is simultaneously an understatement and an overstatement. The relationship is/was a lot more complicated than that.
IBM's success with Java pretty much proves that it was Sun's management of java rather than Java itself that was the problem. On the same note, IBM's success with Linux pretty much proves that McNealey's whole rant makes little sense.
Hah, McNealey's blaming FOSS for his own management shortcomings. The bad thing is people not in the industry (not in IT and more in Financials) will read this crap and come to the conclusion that FOSS == BAD for Business. I think its more a case of McNealy == BAD for business.
Python: 'And then suddenly you have a language which says "we're all stuck with whatever the whiniest coder wants".'
Did anyone ever try to buy things from Sun?
No other company I ever worked with made it so hard. Unless you were a megacustomer, it was actually fairly difficult to actually buy anything from them.
In contrast, buying RedHat on the small scale is click, click, done.
Here's a summary of Ellison's rant on why Sun died, notice the complaints are mostly about sales and engineering decisions, open source had very little to do with it:
http://blogs.barrons.com/techtraderdaily/2010/05/13/oracles-ellison-sun-execs-were-astonishingly-bad-managers/
Blessed are the pessimists, for they have made backups.
IBM has seen open source as a means of creating "solutions" for customers not a money maker in of itself. Ibm views linux as a sturdy and inexpensive tool that it can spend money to become very expert at. Sun sells expensive tools, IBM sells solutions to customers needs using inexpensive tools. That is why IBM is very very rich.
Interestingly, IBM and Oracle got more value out of using Java than Sun did by writing it. That appears to have been one of the decision points for Oracle.
One of the extra advantages of Linux for IBM was that it offered a new OS for the 390s, and of a very popular flavor. Sun already had a Unix OS for SPARC, so they didn't get the added value.
Sun was, IMHO, always a "BSD vs Bell" shop: they understood the struggle to free BSD, and learned how to deal with Bell and the commercial world, but that's where they stopped.
--dave
davecb@spamcop.net
Just because IBM has a lot of open source support doesn't mean they don't sell a lot of commercial software (like Dassault, a partner they had invested heavily in for a long time)- they have gone from a mostly hardware company to mostly a services company with hardware offerings (HP is similar now that they bought EDS). Services and support is the real cash cow for them, as it was for Control Data back in its day (before their management put the company in a tailspin of spinning off profitable divisions to keep stock above junk status... and gee, EDS did that too...).
he
Well Ellison gets one thing wrong. It wasn't 12 inches of cooling fans, it was 12 inches of solid copper heat sink topped by a fan. Sun took a failed Darpa project and tried to make it into a commercial venture. I was ready to dump my life savings into Lambert stock.