Sun's current cost structure doesn't begin to be supported by revenue. It has ~32,000 employees, and makes $12 billion in hardware revenue, with declining gross margins (Dell, Rackspace etc. are commoditizing servers). Their "strategy" for growth is open source, but after 10 years, they still haven't shown how they will make money out of Java. MySQL is a $100 million a year business, respectable, but there is no way to see how it grows to billions without pissing off and driving away the very users that made MySQL successful.
If I were them, I would cut deep, real deep, like 50% lay-off, assume further drastic erosion in their margins (and plan to be profitable with such drastic erosion), and crucially, with a slim-but-sharply-focused R&D division, focus on coming up with innovations that people are willing to pay for.
Apple did it, Sun could. It has the heart of a great company faintly ticking somewhere deep inside, but alas, current leadership hasn't shown it is up to the job.
The comparison to Apple is apt. Back in their heyday, Sun combined the right hardware and software into a product that was perfect for the market, first scientific workstations, and then high end servers, in both cases, best of breed, premium priced, huge moneymakers. I don't know how you get back there, because they seem tremendously unfocused. But Apple was there once too - in the doldrums, failing to perform, all over the map. And they came back.
Digital corporation: very profitable minicomputer business... until workstations were good enough.
Sun microsystems: very profitable workstation business... until microcomputers were good enough.
It's hard for a business to get back to where it was, when the very basis of its success is washed away. See "the innovator's dilemma" (actually inspired by the Digital story). You're right though, that Apple has done it... seemingly by shifting its weight to a different aspect of its business (consumer design) that was present all along. IBM has also done it (from cash registers, to mainframes, to minicomputes, to microcomputers, to today) - however, it seems now to be consulting-based (like Accenture), which is a different kind of business altogether, from IBM's traditional office automation products, but which was always present (like Apple).
Again, Sun makes more money from Java than people realize. Maybe not a huge amount, but licensing the embedded and mobile JVM still brings in revenue. This is why Sun put the JVM under the GPL the way it did, so it can continue to license commercial versions of Java to handset manufacturers.
"Schwartz has spent two years overhauling Sun, which posted five years of losses under former CEO Scott McNealy. The company continues to lose market share in servers, the computers that run corporate networks and account for almost half of revenue."
Convenient excuse for a company that was already in trouble. This way they can just say "oh it's the crappy economy" and hope to get a free pass for generally sucking (see GM)
Look, if they didn't make tons of money in the last 7 years there's something majorly wrong. I can understand if the last year was down, but the last 7 years? Please.
Sun is the only midlevel server company that innovates beyond buying mother boards and CPUs and assembling them. They make their own CPUs, their own OS, ZFS, serious storage solutions, etc. They foot the bill for MySQL and Java.And so on and so on.
Unfortunately, bad management can sink a good technology company.
Well, but if nobody else sees value in producing their own CPUs for mid-level servers, maybe there's a reason?
If everybody else is using a free OS for mid-level servers, maybe there's a reason?
Java, OpenOffice and MySQL are neat. Know anybody who's paid money for them?
Sun's decisions in the technology world have been so bad in the last decade that you could have become rich just by watching what they do and investing in the opposite.
"Java, OpenOffice and MySQL are neat. Know anybody who's paid money for them?"
Yes. Java still makes money for Sun for embedded and mobile devices. The licensing costs for a mobile JVM are reasons why you see the rather unique approaches taken by Android.
Back in 2006, MySQL had $60 million in revenue, so someone's paying for it. Not sure about OpenOffice (or Star Office, that is).
Java, OpenOffice and MySQL are deffensive strategies. If corporations didn't see a viable option (and Linux was no such thing 7 years ago), even more of them would have gone the Windows route and Sun would have seen its high-margin Solaris/SPARC business collapse long ago.
Workstations with x86s pretty much eroded their low-end Solaris/SPARC market because even a low-end SPARC cost twice as much as a pretty decent x86 running Windows NT. That was the largest mistake - to allow NT to take a foothold in the low-end workstation market. This caused lots of sophisticated software being developed for Windows instead of Unix.
It's probably too late to develop a minimalistic low cost, sexy, sleek box running OpenSolaris out of a T1 or T2 chip, but I would consider such an all-or-nothing strategy to put lots of very cheap, conceptually advanced computers in the hands of students and researchers so to foster development of software that runs better on Sun architectures.
It's a good kind of vendor lock-in: one achieved by excellence. Sun is uniquely positioned to do that.
IMHO, the Niagra chips are nice, but are fairly specialized vs desktop chips. They're pretty well set up for lots of threads, but I donno how they'd do on the desktop. They're still sparcs, after all.
That's the problem: You shouldn't care about how well a SPARC desktop runs Firefox. You should use such a box to develop software that run on a 32 or 64-thread machine.
We must be prepared to deliver performance on many-core machines because that's what the desktops and servers will be in the near future.
And that's why Sun should investigate cheap desktops that could be used to run and develop - they have a uniquely viable platform for that and they have it today. Any software built for those boxes will run better on their servers.
As a personal favorite, they should work their asses off to make sure "fashionable" languages like Python and Ruby do threading decently on those chips. If I have to select a web server and I have a US$ 20K server with a 4-thread x86 and a US$ 20K 32 thread SPARC, I will probably go Sun's way.
"Everybody" is not using Linux for their mid-level servers; Solaris, especially OpenSolaris, is still a very viable option, and offers a number of features (most notably ZFS and Zones) that Linux isn't really close to, yet. Not to mention, Solaris has, in my experience, a much better I/O scheduler.
Linux is a fine operating system, but it isn't the end-all-be-all.
yup. sun is a bespoke tech firm in an era of relentless commoditization.
my guess is that they only cling to life on support contracts from people who are still solaris/sparc shops (which i imagine they are still quite a few of)
Isn't it strange that the same community (namely, hackers) who claim to hate the Windows monoculture (and embrace alternative desktop platforms like Apple's) seems intrinsically resistant to a server-side stack that isn't based on the cheapest Intel or AMD chips they can find, running the most bog-standard version of Red Hat or Debian.
I think it's an unfortunate sign of the times that the commoditization of hardware is threatening to drive one of the last truly innovative hardware vendors out of the server market.
Of course, it may all just be karma for the time when Sun workstations more or less killed the arguably much-cooler Lisp Machines way back in the 80s.
Well... I am quite unlike the community you mentioned. As much as I like Linux, I despise the PC architecture (the clunky x86 is remarkably elegant when compared to the rest of a common PC - I imagine there is even an ISA bus buried inside the chipset) my computers use. I would much rather have a MIPS or ARM or SPARC based notebook instead.
Unfortunately, those are not being made mainly because any pc-class computing device must be Windows-compatible.
There is hope. Canonical recently announced they have a complete Ubuntu stack compiled for ARM. Maybe someone can make a cheap non-x86 usable desktop or portable computer out of that.
As for Lisp machines, it would be very interesting to build one these days. Anyone wants to guess what a Lisp CPU would look like if it could have been done with, say, a 45nm process?
By what metric is "Apple more successfully resisting commoditization of software than Microsoft?" Preaching the supremacy of everything Apple to the choir of Hacker News is a good karma-building tactic, but if you want to base your claims on inconvenient truths like software revenues, you'll find that Microsoft is more successfully resisting commoditization of software than every other company on the planet. Apple isn't even in the same ballpark.
I'm no fan of apple, you can look through my comments & see. I was just assuming on a per unit basis & only for the base OS, i suppose. The extra that's paid for apple computers is a lot larger than the $50 or whatever an OEM adds on for windows.
If I were them, I would cut deep, real deep, like 50% lay-off, assume further drastic erosion in their margins (and plan to be profitable with such drastic erosion), and crucially, with a slim-but-sharply-focused R&D division, focus on coming up with innovations that people are willing to pay for.
Apple did it, Sun could. It has the heart of a great company faintly ticking somewhere deep inside, but alas, current leadership hasn't shown it is up to the job.