When the idea of making money from running an ad-funded social network was Silicon Valley's mantra, Sun Microsystems thought the future was guaranteed. The model was simple: make money by selling Web 2.0 sites its servers and offer subscriptions for its software, which - in theory - would guarantee on-going and predictable …
I don't think it was hidden. If you listened to the Earnings Announcement, they were very vocal about this addition and many of the press on the call commented on it's inclusion.
Sun makes more from software than Red Hat
Few people seem to recognize that Sun makes more from Software sales than Red Hat. Yet Red Hat enjoys a market valuation that's 75% that of Sun's. If Sun's new storage kit with Flash memory is as good as they say it is, then the combo of MySQL + ZFS + Flash storage servers might be a killer against IBM, NetApp, EMC, etc. Time will tell...
Wait....Sun is hiding something
Java at $34M per qtr wont even pay for R&D + S&D let alone provide profit
MySQL / Infrastructure - What is infrastructure? iPlanet? Other Sun software? Don't assume that MySQL is all the revenue or even possibly half of the $37M in 1Q.
$1.7B in hardware
$1.2B in mostly hw services
$124M in Software
And the business model is to turn Sun into a software company who gives all software away for free. Harvard School of business case study for the ages.
Prediction: Sun will sell systems and storage business to Fujitsu for next to nothing, but will claim a good $ over many years.
Sun will keep its cash and software and will do an 8-1 stock split reversal.
Sun will survive but will become a company like Palm that only focus's on the O/S.
Steve Jobs compensation $1
Jonathan Schwartz with recent raise $11M
Jonathan is doing a great job of turning Sun into a thriving billion dollar business (down from $13 billion, of course).
He and the brain trust didn't understand the enterprise business and the fact that most of the services revenue came from the high end. Only now are they putting feeble efforts to support the high end, but it is too little too late. They starved the milk cow.
Good products, poor marketing
Sun really needs to find a marketing department that knows what it is doing. The new T series servers are SO much better[*] at serving web pages than any alternative at the same price but nobody knows.
[*] I've run a two CPU T serier server at load averages continuously above 300 (three hundred) and they still hadn't run out of steam.
Re: This Company Will Go Bust
"and great langauges (.NET)."
If you don't know what you're talking about, please keep it to yourself. For one thing, .NET is not a language. For another, you're a moron.
It all depends what you use those processors and languages for.
Sun's T1 and T2 processors are not a good choice for raw performance but when you need high throughput (as in web servers and applications with a massive number of concurrent users) they are the best on the market today. And as one of my colleagues said yesterday, if you look at the throughput / price ratio, they are cheap as chips compared to the competition.
Same for Java and J(2)EE. C# and .NET are great if you design exclusively for the Windows platform but nothing comes close to Java/JEE when you need to build resilient server based systems that supports a massive number of concurrent users (funnily enough, exactly what Sun's CPUs are best at).
RE: Bruno Girin
"....Sun's T1 and T2 processors are not a good choice for raw performance but when you need high throughput (as in web servers and applications with a massive number of concurrent users) they are the best on the market today...." Unfortunately for Sun this is the nub of the issue - webserving is already established as a Lintel/Wintel arena, there simply is not the driver for businesses to invest in Solaris admins for an area they see as already being filled by Lintel/Wintel at a cheap price. Only companies that already have Solaris skills from old SPARC solutions will invest in Niagara, and those type od Sun shops are drying up as customers switch to Power, Itanium or just x64.
On the software note, it is still not enough to offset the loss in marketshare from declining Sun hardware sales, and poor return on the huge buy price of MySQL. Sun has a long way to go before it makes it into the top ten software companies list (according to softwaretop100.org, MS is #1, IBM is #2, and HP is #5, Apple is #34, Red Hat is #58, whilst Sun is down at #88).
Re: RE: Bruno Girin
Good on ya' Matt. A fairly well reasoned analysis without the usual bitterness.
I tend to agree with you on this topic, though I am a big Solaris advocate. Sun has been a hardware company in the past, and the great ponytailed one is looking to other routes of revenue. Agree or disagree with Sun's tactics, they are doing what they have always done in the past, they are trying to outmaneuver their competition. They can't attack them straight on. They'll get squashed. In the past when they did this they were a smaller company so changing routes was easier. They are now a Tier-1 server company with tens of thousands of employees and billions in revenues, so it's harder to turn now. If HP or IBM makes a mistake, no big deal, they can recover. If Sun makes a mistake, it is much more amplified.
I don't know if Sun's route will work, but if they can keep the investors at bay, I think they will succeed. They are generating cash on their balance sheet, no matter what the street says, so as long as they can keep doing this I see potential.
As far as Niagara goes, we'll just have to agree to disagree. There are plenty of places where Niagara shines, other than on web serving. As a previous poster stated, it also shines on anything that requires a massive number of connections. Some HPC workloads run extremely well on Niagara, though I only know one person doing this, and I am not really that involved. In the Telecom Industry (where you apparently don't have a lot of involvement) the Niagara boxes are proving to be extremely effective on some in house applications (read thousands of users and hundreds of thousands of connections). The power and number of systems required to run these apps on a Power or Itanium is completely a joke. Our apps just run faster on the smaller Niagara boxes.
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