Sun (SUNW) is heading in the wrong direction.
By Angsuman Chakraborty, Gaea News NetworkSaturday, January 15, 2005
Much as I try to understand, I think Sun’s freeing up of Solaris is a bad bad move. Solaris was their cash cow!
If I were in the hot seat I would have kept Solaris up and running as paid-for-software with new innovations (like dtrace) and simultaneously have gone for:
1. new product offerings in grid computing domain and
2. ramped up java based service offerings
Also the low cost of support for Solaris is a wrong strategy.
Unless it can make revolutionary innovations in the chip design of some new high performing distributed system (plug and play), I think we will continue to see tepid growth(?) of revenue in future.
The problem with open sourcing is that not every idea is suited for open sourcing. It is a strategy not a one-size-fits-all solution.
I wouldn’t open source my cash cow, even if it had a rapidly shrinking market. It would simply look elsewhere for ramping up the revenue stream.
Sun failed to cash-in with Java. (It also failed to cash in with promising technologies like Jini and Jxta.)
BTW: Sun doesn’t get the IDE market. Traditionally their offerings in the Java space has been sub-standard. I am not sure why it keeps on trying again and again.
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January 21, 2005: 2:55 pm
Adam Malter> In what way is Solaris Sun’s cash cow. We’re looking to buy a $175,00 E4900, Solaris is thrown in. Adam Malter> That machine would be $175k with or without OS. Sure you can buy 175K server without Solaris. But then what are you going to run it with? Can you ever dream of charging 175K for the harware if was running windows? There are times when a company is forced to give in to perceived market pressure without focussing on innovation. Those are the sad times. The same happened during the dot com bubble. Everyone with a two-bit idea went for becoming the nest millionaire. I wish Sun comes out of this phase innovatively. Personally I always admire how Apple under Steve Jobs always combats market pressure with innovation and style. What Sun needs now is a good leader like Steve Jobs. |
 Adam Malter |
January 21, 2005: 6:22 am
Its the premise of the comment that I have a problem with. In what way is Solaris Sun’s cash cow. We’re looking to buy a $175,00 E4900, Solaris is thrown in. That machine would be $175k with or without OS. When we bought W2100z Java workstations, they threw Solaris in for free. If your buying hardware from Sun (and your probably not running Solaris is your not) then your paying for the hardware. The intial operating system license costs are not even factored in. So, really, I don’t see this as any different. I certainly don’t expect the pricing of any Sun hardware to change now that Solaris is free. I really don’t see this costing Sun anything to their bottom line. Its just a play for some open source goodwill. |
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January 16, 2005: 2:50 am
It’s like this: whether, Sun, Microsoft or anyone else likes it, the Linux market has redefined operating system pricing to be “Code is free, pay for support and edited updates feed.” Now, given this, there are two market forces at work. Corporate customers want support and don’t quite believe that the RedHats et al can deliver it. And many, many developers are interested in Linux because they really want to use Unix. So given that the pricing model has been redefined forever, Sun is now in a position to say to the corporate users, “We have many years of delivering support, and due to the increased volume on the low end, maybe we can do it cheaper than in the past.”, as well as saying to the individual developers “OK, here’s Unix, on your PC, with a cool GUI. Enjoy. Go forth and write software. And by the way, if you do want occasional updates, hey it won’t kill you to send us $100, will it?” I think it’s really a pretty powerful position to be in. You’re probably right though about tepid revenue growth. Sadly I think that’s the nature of the new software market; It’s fundamentally a services market, and services don’t make for high growth. |
Angsuman Chakraborty