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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

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.

jaaron 18y ago
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.
deleted 18y ago
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ojbyrne 18y ago
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.
- 13ren 18y ago
  It's the tide. 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).

jaaron 18y ago

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.

deleted 18y ago

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ojbyrne 18y ago

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.

13ren 18y ago
It's the tide. 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).