Today we got a press release no one wanted to see: Sun Microsystems Aligns Business with Global Economic Climate and Amplifies Growth Opportunities Across Open Source Platforms… how much more rosey you can make it sound, I don’t know. As a result, the stock traded higher today, by 1% at close, but the stock took a beating in after-hours trading and struggled to stay above $4 in early trading.
So lets break it down, for better or worse…
Many of us have known that Sun is still too large, in terms of employee count. Even with repetitive RIF’s (reduction in force), the company keeps making aquisitions and the cuts, as deep and painful as they are, haven’t been deep enough. What a horrible thing to say…. but there it is.
Rich Green is gone. Whether he resigned for personal reasons or not, I don’t know and don’t care. There are a great many of us glad to see him gone, but as for particulars, he hasn’t really been an outward facing fellow, so most news about him comes by way of rumor which I don’t like to subscribe to.
WIthin Systems Software there are now 3 groups:
- Application Platform Software, run by EVP Anil Gadre, formerly Chief Marketing Officer. So these guys handle everything on top of the systems software, including the whole Java stack, databases, software integration, and even Sun Ed.
- Systems Platforms, run by the EVP John Fowler, undoubtedly the most public facing of all Sun’s executives, will handle all the software that makes the hardware go, including Solaris, Virtualization including xVM and Virtualbox, management software, etc.
- Cloud Computing & Developer Platforms, run by SVP Dave Douglas, will handle NetBeans, OpenOffice, and Network.com, trying to put Sun in a position to leverage the Cloud and build new avenues of business for the company.
So we see a stack here. I’m curious as to how much of systems, from a hardware production perspective, will stay with John Fowler and who will be stepping in.
As usual, two big questions are floating in the air: a) when will Sun be acquired, and b) when will Jonathan step down. As to the first, I don’t think it will happen. The company is a tough one to deal with, and would invariably involve a lot of slicing and dicing. In this tough economic climate I don’t think anyone has the time or money to take on the problems of Sun. As to the latter, I like Jonathan and wish him only the greatest success. I do question many decisions he’s made, the MySQL acquisition first and foremost, and I’m not happy with how distracted Sun is by itself. Systems, Systems, Systems… make great systems, sell great systems, provide software that makes them better… systems systems systems! The bottom line is, the Sun Board of Directors will make that call, and clearly they haven’t felt it was the right decision.
I want to highlight that point. There is a lot of people after Jonathan’s head, but the blame for any missteps is on the Board. They are the final authority and they are signing off on it.
The future is unclear, but its time to streamline. I recommend reading my (Joyent) CEO David Young’s perspective: In the Business Cycle of Create, Improve, Destroy: What Sun Needs to Do Now, forward looking given that it was written on Nov 6th.
Interesting read Ben, thanks for writing. Nice to see a more balanced, level-headed piece. I’m interested in your perspectives on the MySQL acquisition and JIS in general, if you’d be able to fill us in on a bit more detail would be great
Sun would make two brilliant companies. As one company, it’s hardware is tied to far too great a degree to Solaris, and it’s software division seem able to coast on the fact that if you buy Sun Hardware (mainly sparc) you’re stuck running Solaris (yes linux is supposedly supported. But I’ve just about given up on ubuntu on sparc, after being one of <1/2 dozen people worldwide running it, and gentoo isn’t quite suitable for production machines).
Obviously, they have the engineering smarts to pull things off. Now they just need the business sense to make two great companies out of one that’s dying.
Cian: That’s actually a fantastic idea.
From my dealings with Sun over the years I think the following is true:
* Sun has some excellent, and in some cases – exceptional, technologies
* Sun marketing/sales are crap, they have no idea of how to sell what they have or to convince the average IT group that what they are selling is interesting/different
* Sun strikes me as a company looking for an iPod moment rather than focusing on what they do and doing it well (starts with management, or the lack thereof)
What drives me nuts about Sun is that they release some interesting item and then one finds out that brand new spanking item X is not supported/does not work with another item that Sun makes or won’t be available for several months.
Press releases and fancy blog postings are not corporate strategy and execution.
There was an article on theregister.com (El Reg) a few weeks ago that stated Sun should allow itself to be acquired by Fujitsu.
After thinking about it and after seeing the new M-series servers that Fujitsu designed I’m thinking that would be a good thing.
Fujitsu has deep pockets, maybe they would bring some management discipline to the mix.
Better to drink the Fujitsu kool-aid than grope around like a drunkard looking for something, anything, that will stick and take off.
Been reading this blog for a long time, keep up the good work
Fujitsu is WAY too closed to fit, culturally, with Sun or with the dreams of the Open Source community. The M Series boxes for example were behind a lot of internal frustration with servicing them because for a long while the details of the innards were not being shared despite our companies being allegedly partners in the development. I’m no longer in service so I can’t speak for how that is going today, but I think that gets the idea across.
Honestly, my first reaction to dividing into three verticals was that it was yet another strategy to protect those in middle management.
Sun doesn’t so much need management discipline (IMO of course); they need to RIF the bloody middle management. There are FAR too many layers, all of them more interested in protecting themselves in the rounds of RIFs than actually looking at the good of the company. Too many chiefs, not enough indians, and it gets worse every round.
For a long time now, despite rhetoric from the top to the contrary, it has appeared that Sun can’t spell accountability for results. Far too many internal (or external) debacles get rewarded with a move to another part of the company rather than much needed firings. It’s not terribly surprising that things have come to this, but it’s very disappointing.
Ya know, even though I love watching Sun twist in the wind, McNealy did more to offend me than any one man ever did, that a two bit, bankrupt hosting provider is giving them advice is really precious. Strikes me Jonathan has the courage to exit folks, and quickly, who don’t mesh with his objectives, and in his shoes, I’m not sure I’d know how to forestall the path McNealy basically dictated. I wonder when he’s going to be kicked off the board, and let the new team execute on their plan.
Ben,
nicely put. As a former employee and a current stockowner I think it’s sad… but they’ve had it coming for I guess a very very long time. They never quite understood the customers. Sure they have always had excellent technology but they never finished their product, assuming (wishing) that someone would partner up and finish it for them.
I think fishworks is great, now they just have to take that team and finish up the xvm products.
Cian and Nate, your description of Sun makes me wonder if it should learn a few things from Apple. While both have OS’es and software that integrate really well with their own hardware and charge a bit more (or a lot more in the Sun side) than the competition for comparable hardware, Apple’s software seems to feel to work nicer and have a better look/user interaction. Some of the Sun software feels like it started well but somewhere along the time the people working at it were pulled to other projects and never allowed to finish it.
Other thing Apple always did well was marketing. It is very telling that Microsoft, who all but completely owns the desktop market every so often puts out ads to counteract Apple’s to the point of trying to state its users are as cool and hip as the Apple ones. In the server side, IBM is putting out ads to convince people they are *the* company you call for server solutions. I have worked in IBM-only corporations and can say big blue products are as much — if not more — expensive than Sun. And their interfaces take a lot to be desired. But, they do know how to sell it.
Mike, interesting you mentioned xvm. It has a lot of neat features I do not see in vmware, but right now I could not recommend xvm for a production setup. IMHO, Xen and vmware would be my first choices, not necessarily in this order.
thanks
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