Sun’s road ahead *must* be with software and services, the Open Source model is a sad example of how Sun cannot transform quick enough and has to bypass it’s own lifeless sales force put in place by Scooter and his league of not-so-daring gentlemen. And what are they aiming for with their services.. Accidenture and Whipro? I can imagine MLP has so much trouble turning the internal semi-academic rat race around with his ‘in your face’ revitalizing Operation Zombielympics, where their attempt to be ‘cool’ has an awful resemblance with a failed cryogenics experiment, and mostly because Scooter is still running the company behind MLP’s back. Maybe that is why Sun’s topmanagement shows the decisive acumen of a 13-year old girl.

“the network is the computer”… so why are they still building standalone machines? And how’s this for a vision statement, http://blogs.sun.com/Gregp/entry/the_three_most_important_applications ? Incredible.. am i the only one who’s carefully collected bits of hope go down the drain when reading that ? A CTO that was hired from one of the most majestic failures in computer history, Thinking Machines.. suffering from the same mistake as Sun does, intellectual arrogance. i realize California isn’t exactly on this planet, but the laws of physics still apply, no ? So maybe these wonderful databases become distributed with dynamic relay systems and such, or maybe they’ll run on the great Sun tools (because they do make good stuff), but there is nothing that justifies paying so much money for MySQL, even when it gets you into unforeseen customers, and a more active sales force.

No, i am no share holder, i am a reluctant partner..Working together with Sun for the past 3 years has been both frustrating and delightful, although significantly more on the frustrating side of the equation.
I have been confronted with the most inexplainable stupid behavior as well as amazingly to the point, honest and intelligent approaches.
No, i don’t agree with the open source scheme, but yes i agree it should be freely available and the processes and people surrounding it should be open. Yes, there are too many managers, and no the company cannot have a too strong a leader, because it’s power lies in the diversity and cross fertilization of the people.. but there it needs managers to maintain a direction. And these people, just get rid of most managers and turn the organization as a whole into a service firm.
This is a company in transition from hardware to software to whatever lies behind when the two convergence, and it is not leading the wave and it does not have to. And i hope they realize that. It is in fact putting together a whole interoperable stack of solutions spanning the network and operating system infrastructure upto the applications itself. The hardware is just secondary. Despite all annoyances, whomever is coordinating and executing on the software vision can count on my vote.
But my God, are they frustrating..

There is a sliver of the strategy that makes sense. Given the position that Sun is in currently, using the guise of “free” to increase adoption makes some sense. But it falls apart after that. Schwartz is disaggregating Sun’s products and commoditizing them. This severely impairs the company’s ability to create customer value (other than “free”), and to sell that value.

Schwartz, and his mentally handicapped Chief Marketing Officer, Anil “Frigtard” Gadre, have embarked on a grand strategy this year to acquire 15,000 new customers (first it was 50K, then 27K, then 19K, and now it’s 15K…it’s already The Incredible Shrinking Growth Plan). The problem is that they’re targeting small companies and startups. Most of these want “free” (um, no revenue in that), most will fail (no revenue here, either), and most that succeed will be bought by other companies that will flip their IT into existing architectures (revenue *poof!*). I won’t get into past numbers, but Sun’s history with these kinds of initiatives is not good. Most new customers tend to buy once, and not again. And this is The Grand Plan for this fiscal year. The emperor has no clothes.

I will disagree with Dan Lyons on one point. The proprietary or vertically integrated model can work *if the company creates legitimate and compelling value* for the customer. I don’t hear anyone crying about Apple, or Oracle or Cisco’s lack of Open Source presence.

The board of directors needs to dump Jonathon before he spends again. He’s already pissed away $4B of precious cash on poor investments. The $3B invested in StorageTek is now being managed to YoY declines (we should have put the cash into T-Bills).

The $1B of cash for MySQL was a bonehead investment – at least, the way it’s currently being managed. It was an astounding price to pay (20x annual revenue), especially for a company with no profits (like we need another drag on profitability, right?). The MySQL investment could be salvaged somewhat if Anil could actually create some kind of marketing programs to leverage more hardware sales (that’s still where the revenue is) from the MySQL base. But, he’s the ultimate Empty Suit, and there are no such attempts.

All this is going on while Jonathon has made a conscious decision to turn the company’s back on its largest, most well-established customers. This is where most of the company’s revenue comes from, but there are no efforts to grow this base. Jonathon looks at the slight YoY declines among this group of customers and sees his justification for diminishing Sun’s focus on them. In truth, the YoY revenue decline is because we’re not paying attention to them. This is critical insofar as *so* much of Sun’s revenue comes from large existing customers, that even the smallest decline easily offsets gains elsewhere. You would think we would pay more attention to them, wouldn’t you?

I’ll leave with something more important than my opinions, or your opinions, or Dan Lyons’ opinions…the results. Sun has not grown greater than the market average in any single quarter since Jonathon became CEO. Therefore, we have consistently shrunk while our competitors have grown. If you think that I’m being unfair by only giving him two years, remember that he was also the president/COO for two year prior to that. So, he has four years of Sun’s results with his fingerprints on them. Another reference point for you: Mark Hurd has been with HP for three years. He’s not still producing losses, is he? In fact, HP’s 14% growth last year created more incremental revenue *in one year* than Sun’s entire revenue base. I don’t think it took Gerstner too long to begin turning IBM around either. And both IBM and HP were harder to accomplish by virtue of size and complexity.

The truth is, Jonathon’s strategy is the problem. It’s why we’re shrinking as a company. If we execute the strategy more effectively, we’ll merely shrink faster.

And while you think vertical integration is dumb, last I checked Microsoft xbox, Apple’s iPhone, and every innovator (not BestBuy retailer) on earth will need their own silicon.

The real test, for me, is talking to startups. I know way, way more that are using MySQL and ZFS (even Amazon), than are using Microsoft and Oracle. So if you were betting on who was supplying the innovations that matter in the future – who else would you be betting on?

I think that Sun *could* make their current business model work if they figured out how to execute it properly.

The basic concept of “give away the OS, but charge for the hardware and most of all the technical support” has merit. It’s not easy, and it’s not traditional, but it can work. No company of any size is going to purchase a UNIX server without buying a hardware support contract for it, and it won’t take long to realize you need software support, too. I work at a company in the top 10 of the Fortune 500, and we pay tons of money to Sun for support contracts. By corporate decree, we can only run Solaris on Sun-branded hardware with a SPARC processor, even though it would be more cost-effective to use third-party x86 hardware in many cases. Why? Because we have the big support contracts.

I’ve never thought that Sun’s support was world-class. When I worked at an IBM shop several years ago, IBM’s AIX support was light-years ahead of Sun support.

In the last few years, Sun support has gotten dramatically worse.

Remember the Sun slogan “the network is the computer,” and their marketing that pointed out that much of the Web runs on Sun systems? You’d never know it from trying to open a support call via Sun’s website. It’s glacial… when it works at all. The knowledgebase site isn’t much better, and it’s difficult to navigate. Even so, you’re better off trying to use the website, because if you _call_ for support, you’ll wait just as long, because the tech support agents have to use the same overloaded servers. If you’re a seasoned UNIX admin, it can be difficult reaching a human that knows more than you do — often I’ve gotten answers from calling into Sun that contradict Sun’s own knowledgebase. And the knowledgebase has been right.

It’s total hell if you discover a legitimate bug in Sun software. The support contract doesn’t necessarily mean it will be fixed — at least, not before the next every-6-months “maintenance release.” Sometimes it takes two or more releases.

The hardware support? It’s outsourced to third-party vendors. The technicians often have less familiarity with the hardware than I do. The “four-hour response” contract doesn’t guarantee that they’ll have parts, or that they’ll get parts in a timely fashion. It just guarantees that someone will show up within four hours to commiserate with you. With the bigger Suns, you can’t fix much yourself — many parts are “technician only,” even though they’re plug-in modules. Sure, it may be that I follow ESD guidelines and the “Sun” tech doesn’t, and I’ve read the manual he hasn’t seen, and I’ve actually worked on the hardware before… but if I swap out those DIMMs, I’ll void the support contract. Heck, the *mounting rails* for the bigger Sun systems aren’t considered customer-installable. We have to pay Sun to come put the thing in a rack.

Matters are worse if you just need a small server. Sun seems to have given up on inexpensive SPARC-based servers. The low end of their product line is all x86 now. If you need SPARC, because your software vendors aren’t supporting x86 yet, you may find yourself buying a much more expensive and powerful box than you will ever need, just to get a SPARC processor. If you need a SPARC processor and dual power supplies, the smallest non-telco Sun server you can buy is a T2000, which starts around $6,000.

All of this is incredibly frustrating. Sun has finally “gotten it” with Solaris 10; it’s a grown-up operating system that finally competes with HP-UX and AIX in the “gotta keep the system up” features that are crucial to big business. It’s good software. The problem is, you have to deal with Sun to get it.

Execution problems? Sure. The biggest problem is: if you’re going to rebuild yourself as a service provider, you need to actually learn how to provide good service.

Now, the key thing about $5 is that you cannot short a stock on the NASDAQ if it is trading at $5 or less. The moment they consolidated, and brought the price up to around $20, you can see that it plummeted again as the short sellers got their chance. I won’t be at all surprised to see it settle back to $5 in the next few months.

The fact is, Sun makes bad-ass hardware, bad-ass CPUs, and bad-ass software / operating system. Best in class from many perspectives.

…But they give the magic stuff (SPARC, DTrace, ZFS) away. Schwartz is in a tough place: if he doesn’t give the magic stuff away, Sun will become less relevant and generate less revenue. If he does give it away, Sun will generate less revenue.

I have a pet theory that Schwartz is intentionally flaming Sun out as a huge donation to the state of the art. Sun hardware is price-competitive with anyone, so buy some and keep the dream alive.

maybe not in the chips yet, but the recent pa semi acquire it’s only a matter of time