Server and software maker Sun Microsystems reported its first quarter of fiscal 2009 today, and the red ink was flowing as high-end Sparc server sales dried up at the same time that the company had to book a $1.45bn acquisitions write-off - presumably related to its $4.1bn acquisition of StorageTek a few years back and more …
No worries JS.
Sun is the number one Open Source vendor in the world. It takes a while to move from closed to open. Give them time. They'll get there! No one knows how to price out this stuff yet. If Sun was a start up, their market cap would be 10 Billion. As it is, they actually generate cash and have an existing customer base... go figure...
"Sun is the number one Open Source vendor in the world. It takes a while to move from closed to open. Give them time. They'll get there! No one knows how to price out this stuff yet. If Sun was a start up, their market cap would be 10 Billion. As it is, they actually generate cash and have an existing customer base... go figure..."
Well said sir! I agree completely :)
Bring back McNeely!
At least he could make you laugh as you cry while watching the demise of one of the greatest IT companies in history.
A company with so much potential being flushed down the toilet by a pony tailed moron. My hope is that someone like Apple buys Sun and with Steve at the helm the sun will shine again. My point? Your innovation, your product is only as good as your marketing. Look at MS they hardly innovate and if you use Vista as an example they don't have a product either; but they have an amazing marketing group!
If someone who would do good by Sun isn't found then Sun needs to get some one high end at the top. Ballmer or Hurd maybe Otellini na Palmisano; someone of that caliber. Heck Carly would do better than JS. Maybe Scott should go ask her, seriously Carly could be what Sun needs. The dorks and geeks that have ran the company for decades can't seem to make the next step so a true business executive is the answer. Funny, its been the answer for almost a decade now; but even the brilliant have problems seeing the solution if its right in front of them.
Get a better OS.
"Every other sentence was garbled on the two computers I use, with both Internet Explorer and Firefox"
There's only one OS that uses IE, don't expect it to do media from Sun or anyone else. They have a patent on censoring content like that.
Not All Bad
$M220 from Java and $M208 from mysql a year is not too bad. Who said there was no money in Java or Open Source?
panic not ....
i still have faith in Sun. I have recently purchased a shed load of their (US) shares, because they have never been cheaper and they will rebound. Sun have a lot of money sitting in the bank and once they figure that they are actually sitting on a lot of seriously cool technology that just hasn't been properly monetized then they will go forth again as strong as ever.
I would be look to replace the CEO.
JS...We will see you at the stockholder mtg next week
Scott's Top 10 list
1) Sun's highend is in a free fall because customers are moving to Power rather than migrating to Fujtisu technology.
2) Sun just announced end of life (January) for USIV+, and the (Fujitsu) M class is not very profitable compared to their own highend
3) Sun only wrote down the good will of hardware acquisitions, when will they write down the MySQL $1B acquisition?
4) Suns MySQL revenue/growth is hidden with all the other middleware and the MySQL added.
5) JS may not hear customers say they are moving to Power, but that is because he is not talking to customers who are throwing them out for Power systems
6) How can JS talk about additional acquisitions several times when they are writing off billions from prior acquisitions as failures?
7) Sun's revenue is in free fall because the MySQL acquisition and Sun's sales strategy is to replace all Oracle installations with MySQL and they are at war in the sales force. What they miss is most Oracle customers have enterprise license agreements and MySQL customers on Power are very happy to run their business on Power.
8) Sun does not have a leader who inspires the team. Nicknames are a symptom of a disgruntled workforce
9) Page 6 is an indication that Sun is being more transparent so someone will buy them for the value of the parts.
10) The clock is ticking and there is no guidance for anything better.
Its their own fault
They would have had more orders from us if they hadn't killed off what we want to buy. Solaris 10 is still in beta based on its patch history and Solaris 9 doesn't run on any of their new kit.
Sun is out of time
Other then spending large sums of money on products and then giving it a way as open source they have no direction, no plan, and no leadership If they have any of this someone please explain what it is.
Instead of flaming out without a fight, maybe they could at least try something bold( if they want to stay in hardware). Buying AMD would be a bold move.
Johnny better look for moving boxes, as he is about to vacate his office.
Don't forget that they still have $900m left to repurchase their own shares. At a price of $5 per share, that means they could buy 180 million shares (about 25%), or use the cash for acquisitions. In terms of acquisitions, I hope Jon is considering SpringSource and Terracotta - both of which do nicely in the Java ecosystem. If you look at revenues from software, the picture is pretty good at over $500 million per year. Compare with Red Hat whose total revenues for 2008 were about the same at $523 million.
There's no good reason to write down the MySQL goodwill. On November 10th, Sun is launching the coolest storage servers ever with Flash memory and ZFS file systems. This is the missing piece in the "let's sell kit to MySQL users" strategy. See http://blogs.sun.com/storage/entry/flash_performance_in_storage_systems for details.
Some key crunch points for the next 12 months will be:
1) New Niagara chips need to come out on time and work well, or Intel will beat it
2) AMD's Shanghai chips need to push Sun's X4600 and X4540 boxes
3) MySQL 6 with the Falcon storage engine needs to win rave reviews
4) If Rock doesn't beat Power and Itanium then it should be canned
5) They need to learn how to sell via the web (their site sucks)
Sun spent over $400 million on R&D during the quarter. That kind of investment really needs to start paying dividends, especially in the tough times. Anyway, I wish them well. The world would be less fun without Sun.
$3B in stock repurchases
Q. What it means when you buy back $3B in stock and the stock goes down?
A. You have wasted $3B
May 22, 2007
Would you give yourself an A, B, C, D or F?
Schwartz: I'm not going to give myself a letter grade. The single best grade for my management team's performance is our share price. It's gone up. We're having such a different interaction today with customers and partners. You have to remember two or three years ago it was not a pretty picture. We had a lot of folks who were writing us off or counting us out. No one today is writing us off or counting us out.
Stock price at day of interview: $21.52
Stock price today: $4.72
This is the end...this is end my friend
Re: Share repurchases
"1) New Niagara chips need to come out on time and work well, or Intel will beat it"
So far so good. They can at least get Niagara out within a reasonable timeframe.
Rock on the other hand...
"2) AMD's Shanghai chips need to push Sun's X4600 and X4540 boxes"
Well, if they don't, then the X4450 should do the trick. Though the X4600's are pretty
damn impressive, and the x4450's are just "me too's"
"3) MySQL 6 with the Falcon storage engine needs to win rave reviews"
"4) If Rock doesn't beat Power and Itanium then it should be canned"
Rock doesn't have to beat Itanium, but I agree that it has to beat Power. Of course it all
depends on what you mean by beat. In the same size chassis, with less power, and less
money, then yes I think Rock will handily beat Power. If you mean with the same number
of cores, then no, I don't think that Rock will beat Power core to core. Hell, Niagara already
beats Power on most benchmarks in the same size chassis, with less power, and less money
"5) They need to learn how to sell via the web (their site sucks)"
"JS...We will see you at the stockholder mtg next week"
Unusual for IBM PR folks, isn't it?
"JS...We will see you at the stockholder mtg next week"
Admission to the stockholder mtg is only $4.49 (one share)
RE: No worries JS.
Hi Matt. I've taken time off from being God in order to straighten out a few innaccuracies in your post. First of all, we don't sell that "open sauce" stuff you mentioned, in fact we don't sell any kind of condiment. We sell proprietary software with licence fees befitting my status as Computing God - except Solaris, of course, which no-one wants anymore so we have to give it away for free. I think you may be confused becasue we did try selling a kind of Linux a looooong time ago, but it was even more unpopular than Solaris, and by then our jealousy had led other Linux vendors such as Red Hat becoming upset both by our superiority, and by our constantly smiling to their faces but then telling all and sundry that their product was cr*p. So we left that Linux stuff to HP, who seemed quite happy to get down and dirty with all those nasty OSF commoner types. We also sell someone elses storage, some servers from some other people, and a few of our own designs from other companies we bought. Well, actually we sell a lot less of other peoples' stuff, but then red is my fave colour so that's just fine.
One of the occurences in my life you will hear me mention most often (and thrillingly told it is too, I must modestly admit) was when my heavenly invulnerability was confirmed by my surviving the Amtrack train crash in Chase, Maryland, back in 19BC (that's 19 years Before CEO, or 1987 in mere mortal terms). Ever since I have delighted in catastrophic crashes - well, like our share-price. In fact, it is this divine ability to recognise the holiness of an idea that has led me to push our market position downwards in the (righteous) belief that Steve Jobs (a lesser god) will see fit to ask us to merge our two companies so he can benefit from my Divine Leadership, and then we can proceed to bless the iPhone with Niagara and our customers will be able to make sixteen calls at a time (people do that, don't they?). Of course, we will still work on the Rock CPU, and when the time is right we may even release it if you peasants show correct deference.
Anyway, I hope this has cleared your mind and set you back on The Path To True Enlightenment (aka Solaris, Java, and MySQL), and there will be no more of this nonsense about "peon source" or whatever it was you were on about.
Jonathan I Schawartz, CEO Sun (that's "God" to you).
PS: As my mother would say, "Sipia a Sunshiners!"
RE: "JS...We will see you at the stockholder mtg next week"
"Admission to the stockholder mtg is only $4.49 (one share)" I'd wait, the admission price looks like it will drop before the day.....
To Jonathan Schwatrz
That's actually pretty funny Matt. Good on ya'. I didn't think you had it in you.
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