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Nibble Re: Sun's Annus Horribilis

This last year has not been a happy one for the "dot in dot-com" company.

Partly it's suffered from problems affecting the whole computer industry, but maybe it's time for the company to confess up to shareholders, users and other partners, that some of its biggest problems have been self inflicted. Hubris had become as much a core part of the company as Solaris.

As the strength of Sun has dimmed during the last year, the glare of looking directly at it has become less painful. I don't realistically expect any press releases coming out from Sun Microsystems admitting they have done things wrong in their business strategy (that may have to wait for Scott McNealy's memoirs) but we have already started to see a trickle of news to suggest that they are going back to do some things differently. In the absence of any "mea culpas" coming out from Mountain View here's my own suggested shortlist of sins of omission and sins of commisssion by the SUNW company.

Sins of Omission

• Sun forgot that its customers are rational human beings, who seek out the best value solutions for their organizations. When Sun produces the best solutions, they buy Sun. But that shouldn't be taken for granted when Sun's products are no longer best of breed.

• In the mid 1990's Sun's SPARC Technology Business promised OEMs looking at SPARC technology, that Sun's SPARC processors would maintain a consistent performance advantage over Intel architecture by a margin of about two to one. You'd have to pay more for the SPARC technology, but you'd get higher performance computing typically a year to eighteen months sooner by switching to SPARC. However in 2001 and upto the 2nd quarter of 2002, Sun forgot to deliver on this pledge. First Sun's competitors caught up, and now the performance ratio is heading towards two to one the wrong way round. But Sun still expects users to pay a higher price for lower performance. There's something wrong with that thinking.

Sins of Commisssion

• Sun had many "adventures" into other market segments where the Sun magic had not been worked before. Sun's biggest and most expensive misadventure was in the fast growing storage market. Industry commentators said at the time that Sun was a most unlikely candidate to succeed in this commodity priced market. Storage doesn't just connect to Sun servers, it connects to PC's and Wintel servers, and a lot more besides. My guess is that Sun squandered billions of dollars in this experiment. It failed because users don't want over priced second rate storage at a higher price than best of breed alternatives. However Sun is already going back to its earlier successful strategy of badge engineering good solutions made by other companies.

• Sun had developed a latent market of pro Sun wannabe customers in the Intel architecture market with its Solaris X86 operating system. At some future time this had the potential to be leveraged with Intel badged servers from Sun. However, when Sun unilaterally and without discussion pulled the plug on these users, it sowed the seeds for future distrust. Any future Intel architecture products from Sun, be they Solaris or Linux will be viewed with deep suspicion. Sun's business development in this market has been set back many years

I said this would be a short list. That's why I haven't mentioned that Sun lost trust in its VAR channel by competing with its own customers when times got tough. And that Sun thought that most of its other partnerships with IHVs and ISVs were one way streets designed solely to benefit Sun. But that's no different to what other computer companies have always done. Sun was unusual in ever behaving differently. Sun was unlucky with its cache reliability problem, and was even more unlucky that its fastest growing customer base got whacked by the pricking of the dot-com bubble. Nothing they could really about that.

Looking ahead...

the need for high performance reliable servers hasn't gone away. Sun just isn't meetimg that need as well as it used to. Many of the hurdles which Sun faces are internally created problems. Admitting that's the case, and doing something about it could result in a new dawning for the twenty year old company.