Submitted by “Jonathan Schwartz is a man on a mission. While at Linuxworld today, I took an hour to visit with Jonathan Schwartz, CEO of Sun Microsystems. After spending an hour prodding Jonathan with questions about Sun’s history and future with open source, I was left with one clear impression: Sun is rising, and open source is the driver behind its rebirth.”
For Sun, software is about branding. If enough people–and the right people–associate Sun with the Internet, they will drive revenue. What are these people buying? A relationship with the company that “defines” the Internet in their minds. That relationship can mean just about anything.
The plan is put Sun’s brand on anything that touches the Internet. When businesses and institutions want support and piece of mind to back their IT infrastructure, Sun will be among the first calls, the go-to partner for all of your IT requirements, whatever they might be.
So if Sun doesn’t sell the hardware, the software, or even the service, they still get something out of giving away their software. They cement their brand’s relevance in the IT industry. When business want to part with their money for whatever reason, they’ll think of Sun.
In Schwartz’s words:
What’s the business model? I don’t know. But if you don’t have adoption, it won’t matter what business model you use. Companies that sell open source are prioritizing community and adoption over instant monetization. We will win.
They will win. Whatever that means.
I think you’re right. For instance I ordered off Sun’s website, for free, fifteen licenses of Solaris. They sent it to me without any license or postage charge.
I then gave all but one copy away to colleagues. From one small investment on their part, up to fifteen different set of eyes and minds (some whom have moved onto other organisations) were exposed to Sun’s branding and in particular Solaris.
There’s definite value in this.
Edited 2007-08-10 22:25
I like Sun, and I am worried. Business without business model does not go far. I wonder what stockholder are going to say after this…..
I’m a paying user of Sun hardware and software, and to me Jonathan has really hit the nail on the head. Personally I cannot afford a Sun support contract, but my employer can because the cost of not having backup support is incredibly expensive should we need it.
Jonathan comes across as a very insightful, passionate and directed man. He certainly appears to be someone whom I would definitely want to be employed by, if only because of his vision, a realistic one at that.
To be fair however, what Sun is doing with branding is nothing new. It’s well known and practised that keeping the brand fresh and regularly in people’s mind is key to success.
You have to be known before you can expect someone to buy something from you. There’s no better way than giving something which is incredibly useful, valuable and works, for free, to not only keep that brand and belief of stability/reliability, fresh in people’s minds.
My faith in Sun’s future has been reassured.
He certainly appears to be someone whom I would definitely want to be employed by… My faith in Sun’s future has been reassured.
Sun is expected to cut at least 2,000 jobs before the end of the year. That’s on top of the 3,700 that have already been laid-off since Schwartz took over.
So while I agree with your assessment of Sun’s strategy and Schwartz’s vision, all that advertising doesn’t necessarily pay for all those employees.
The software business isn’t as glamorous as it used to be. There’s no company that understands that as well as Sun. It’s a modest affair these days, and developers are expensive.
Actually, if you look at the break down of the ‘lay offs’, they’re in non-core areas of Sun; basically the equivalent of ‘paper shufflers’ – they’re not cutting down programmers.
Also, it would be ignorant to assume that its all being done by Sun – for example, Intel has just recently hired a team of Solaris programmers for their product range – so some employees one could say are being ‘transferred’.
As for ‘advertising doesn’t pay for these employees’ – bullcrap; if you don’t advertise, people don’t know about your products, if they don’t know about your products, they don’t know what is available to purchase, and if they don’t sell enough products they can’t afford to keep paying for the number of programmers in their organisation.
Btw, these layoffs were played *2 YEARS AGO!* – all these layoffs were PLANNED! Jesus Christ, its as though we have idiots here who think that old Johno woke up one more, ate a bowl of Weetbix and decided off hand between flicking through the Wall Street Journal that maybe Sun should lay off a few thousand programmers.
Need I remind you, Sun has made a profit, not just a piddling ‘eeking’ of a profit, but over $300million. I don’t know about you, but even if they didn’t lay off the 5000, they still would have made a profit. Stop trying to pull at straws to justify some irrational hatred of Sun because of what some Linux fanboys has been screaming about on this forum.
Actually, if you look at the break down of the ‘lay offs’, they’re in non-core areas of Sun; basically the equivalent of ‘paper shufflers’ – they’re not cutting down programmers.
One has to ask why all those paper shufflers were there in the first place, because close to 6,000 paper shufflers is not an indication of a healthy company by any stretch of the imagination.
for example, Intel has just recently hired a team of Solaris programmers for their product range – so some employees one could say are being ‘transferred’.
I thought they weren’t laying off programmers?
As for ‘advertising doesn’t pay for these employees’ – bullcrap; if you don’t advertise, people don’t know about your products,
Advertising is an extremely expensive thing to do to promote your business, and it doesn’t necessarily have a great payoff.
Btw, these layoffs were played *2 YEARS AGO!* – all these layoffs were PLANNED!
If those layoffs were planned two years ago, what on Earth are all those employees still doing there? If you are going to lay people off you tell them and you do it quickly. You mean Sun have actually allowed several thousand employees to continue working, when they know full well they’re losing their jobs?!
That’s a great way to lift morale an boost the motivation of those that are lucky enough not to be laid off, isn’t it? Another big mistake Sun have made is not to do the job losses in one swift move. There’s 3,700 here, and 2,000 there, and the rest of the employees are left wondering if their jobs are safe at all and if they should be making any effort.
It’s a disaster, in other words.
Need I remind you, Sun has made a profit, not just a piddling ‘eeking’ of a profit, but over $300million. I don’t know about you
It’s a measly profit several billion in revenues, and is not exactly representative of any revival. Creative cost arrangement can easily take you into the black, but that doesn’t mean you’re OK. Below the surface:
– Total server shipments dropped by 9%.
– The growth in Sun’s x86 business has slowed to 12%. The high growth of 50% before was basically related to it being new. The only way was up really. Small wonder Sun have signed on Intel.
– Sun’s Niagara revenue has stayed around $100 million per year, and has showed no signs of increasing. For something Sun has hyped a bit, it’s a measly showing.
– Sun’s storage business has gradually declined again by a small margin. It certainly isn’t growing.
All in all, Sun is not a healthy company, and part of their problem is that no one has any real idea what they do now – not even Sun. You can’t just say that you’re an open source company, because it doesn’t mean anything.
Edited 2007-08-11 18:47
Those non-core jobs have been outsourced – transferring fixed costs to variable costs that grow as the business grows.
I’m sure there were some programmers who were transferred, but the bulk of those laid off were not programmers.
Because in the good old US of A – the US of A has stupid laws regarding social security payments and other various things; in NZ, want to get rid of someone, 2 weeks notice and their holiday pay – thats it. The US its alot more expensive.
Also, do you know *ANYTHING* about managing people; you lay people off gradually, maintain the morale of those who are still there; allow those people who are going to leave at least 6months to find a new job – if they want to leave sooner, its all good.
That is how you do an orderly reduction in the work force – not just a slash and burn – anyone who knows anything about HR would tell you its a sure way to kill of morale and push talent people out the door.
Again, you don’t even seem to have the smallest understanding of how a large organisation works.
Ah yes, its easy to bash, bash, bash, and bash.
Lets look at Red Hat – only profit they’re making is the interest on their money pile. Novell is declining. The only ones who are actually going ‘wonderfully’ are the Microsoft whores (sorry for using such a crude term) and those with a massive service wing sucking companies dry by promising the earth and delivering something quite a bit smaller.
And x86 growth has declined to 12% – could that be due to waiting for Intel workstations/servers to ship? could it be possibly due to the fact that you can’t continuously keep growing at such a high rate?
As for the ‘declining’ – interesting, and average margins are actually UP for the quarter, thus meeting their 10% target by the end of the year – but hey, you keep up the doomsday speak. I guess Sun is going to keep dying just like people claiming that Apple has been dying for the last 25+ years.
Edited 2007-08-11 19:59
Those non-core jobs have been outsourced – transferring fixed costs to variable costs that grow as the business grows.
Ahhh, well that makes perfect sense ;-).
Also, do you know *ANYTHING* about managing people; you lay people off gradually, maintain the morale of those who are still there; allow those people who are going to leave at least 6months to find a new job – if they want to leave sooner, its all good.
Sorry mate, but you haven’t got the faintest idea what you’re talking about. That is not how you lay people off at all. You itemise what you need in terms of the people to lay off, and you do it in one swift and decisive move. You then let the company and the people move on and get past it without wondering what’s going to be cut next. You also increase the chances that those who have been laid off will want to return to the company in better times.
This is not something you do piecemeal, turn around and then say “Actually, we need an extra 2,000 reduction in headcount”. If you do that then the rest of the workforce starts wondering when they’re next.
What was that you were saying about morale? 🙂
Again, you don’t even seem to have the smallest understanding of how a large organisation works.
Whatever sweetheart.
And x86 growth has declined to 12% – could that be due to waiting for Intel workstations/servers to ship? could it be possibly due to the fact that you can’t continuously keep growing at such a high rate?
No. It just means that Sun got some initial high growth from selling some cheap x86 kit, but that growth has now slowed dramatically. Sun’s x86 shipments and business still woefully small overall.
As for the ‘declining’ – interesting, and average margins are actually UP for the quarter, thus meeting their 10% target by the end of the year
Are they really? It’s a lovely way to split hairs, to be sure.
I guess Sun is going to keep dying just like people claiming that Apple has been dying for the last 25+ years.
Well, I don’t see an equivalent of the iMac or the iPod on the horizon for Sun any time soon.
And x86 growth has declined to 12% – could that be due to waiting for Intel workstations/servers to ship? could it be possibly due to the fact that you can’t continuously keep growing at such a high rate?
No. It just means that Sun got some initial high growth from selling some cheap x86 kit, but that growth has now slowed dramatically. Sun’s x86 shipments and business still woefully small overall.
I think you should stop providing incorrect data and then defending it like your life depends on it.
– The growth in Sun’s x86 business has slowed to 12%. The high growth of 50% before was basically related to it being new. The only way was up really. Small wonder Sun have signed on Intel.
– Sun’s Niagara revenue has stayed around $100 million per year, and has showed no signs of increasing. For something Sun has hyped a bit, it’s a measly showing.
Niagara server revenue is $100+ million per quarter. Year-over-Year the growth rate of Niagara servers has been 225%.
Sun’s x86 has shown a growth rate of 39% for FY07.
Here are the slides (Slide 6):
http://www.sun.com/aboutsun/investor/earnings_releases/call_slides….
Edited 2007-08-12 05:26
Niagara server revenue is $100+ million per quarter.
Yep, it’s per quarter, but it’s still flat.
Year-over-Year the growth rate of Niagara servers has been 225%.
Considering that Niagara is brand new, I’m not surprised. What years are you comparing here?
Sun’s x86 has shown a growth rate of 39% for FY07.
Here are the slides (Slide 6):
And you quoted the truth from a Sun press release? *Rolls eyes*
Sun’s total server shipments are down 9%.
Yep, it’s per quarter, but it’s still flat.
You mentioned it is per year in you post. What does the “yup” mean? I should have been a “sorry, I was wrong” instead. Prove the sales are flat show me your source.
Considering that Niagara is brand new, I’m not surprised. What years are you comparing here?
Since you provided the bogus data the onus is on you to prove you had it right. It should have been obvious the years in question is FY 2006 and FY2007. That’s what Year-over-Year means. The other clue in that very simples post of mine was the link to the Q4 FY07 earnings announcement slides.
And you quoted the truth from a Sun press release? *Rolls eyes*
Sun’s total server shipments are down 9%.
I know you an an anti-Sun troll on OSnews but I had at least expected you to know the difference between a Press Release and a Quarterly earnings announcement and slides presented at the conference call. BTW these are regulated by the SEC and you can’t lie on them. The 10Q statement gets flled with the SEC. But I wouldn’t expected you to have known that since you weren’t even able to deduce the years from a financial earnings report.
I’d like to see where you get your data and you have yet to show sources. Please don’t bother replying to this if you can’t backup your claims.
Advertising is an extremely expensive thing to do to promote your business, and it doesn’t necessarily have a great payoff.
You seem to have missed the whole point of the article: that advertising can be very, very cheap, as cheap as letting people download your software for free online.
– Total server shipments dropped by 9%.
– The growth in Sun’s x86 business has slowed to 12%. The high growth of 50% before was basically related to it being new. The only way was up really. Small wonder Sun have signed on Intel.
– Sun’s Niagara revenue has stayed around $100 million per year, and has showed no signs of increasing. For something Sun has hyped a bit, it’s a measly showing.
Where did you get this data? Most of it is wrong.
Where did you get this data? Most of it is wrong.
Is it? Care to share the right data, or what you believe to be the right data?
Need I remind you, Sun has made a profit, not just a piddling ‘eeking’ of a profit, but over $300million. I don’t know about you, but even if they didn’t lay off the 5000, they still would have made a profit. Stop trying to pull at straws to justify some irrational hatred of Sun because of what some Linux fanboys has been screaming about on this forum.
I have no idea where Sun’s profit came from, but $300 million / 5000 = $60,000. Since employees cost a lot more than their base salaries, it’s quite possible for layoffs of ‘paper shufflers’ to save a company $300 million.
Soooo… does this not mean software is marked as advertising costs toward some other related lucrative business? Isn’t this called viral marketing?
Edited 2007-08-10 22:27
Erm… no.
http://en.wikipedia.org/wiki/Viral_marketing
That’s ridiculous.
… what might I ask?
Well, shocking low trust and faith from many and the onslaught of Linux. Sun in my view used to be second to Microsoft in terms of arrogance, now they’re one of my most respected organisations.
I think of lot of this has come since the appointment of Jonathan and a new direction, vision and attitude.
As annoying as Microsoft’s monopoly may be, in my experience the company that is the most arrogant has been Sony. Sure they don’t make an OS, but I’m just saying, look (for instance) how they butcher linux on the PS3 while claiming to support general purpose operating systems on the PS3.
Lets hope that open source hypervisors remain competitive, otherwise the control that hardware manufacturers exert on consumers will get far worse.
Sun in my view used to be second to Microsoft in terms of arrogance, now they’re one of my most respected organisations. I think of lot of this has come since the appointment of Jonathan and a new direction, vision and attitude.
I hear you. Scott McNealy used to be kind of entertaining for his Microsoft-bashing and his insistence that we’d all be using thin terminals by now, but he was so brash and over-the-top that I could never take him seriously. Schwartz brings a sense of composure, strategic thinking, and honesty. There’s no question that he’s a salesman, but he’s a very likable one.
I think another big difference is this; Scott really personalised this Sun vs. Microsoft rivalry. Making out that he was the ‘white knight’ to come to the rescue of the ‘raped and pillaged’ companies who were treated badly by Microsoft and IBM (and yes, he did beat up on them too). When you turn something that is business into a ‘personal crusade’ one needs to ask the question whether the individual concerned has lost the plot.
Now sure, Scott has been with the company since its founding, but at the same time, even he I’m sure realises now that he has opened his mouth and put his foot in it on occasions. Worse still, the swings, from one extreme to another. Solaris x86, then no, then yes. x86 and SPARC to purely SPARC then back to x86 and SPARC again. From being Linux’s best friend to being a competitor.
Atleast with the new CEO there is actually a game plan; you know where they’re going to; you know what their vision is for the next several years. There have been no violent swings and turns in policy – customers are now coming back because they know what they’re getting into when they purchase products off Sun.
Alot of the time is a dumping ground for their products or a last ditch attempt to save themselves. Novell, sun and Xara all fit this.
for a large enterprise company to give away all it’s crown jewels; java, solaris, dtrace, zfs, zones, etc. For this, they are getting shit from the Linux camp. I would like to see IBM, Microsoft, HP, Oracle, etc to give away it’s crown jewels, for anyone to pick it up. Would that happen? Not very likely, it takes courage and above all; lateral thinking. Thinking in new directions. That is very very hard to do, and requires cleverness. Do you think Steve Ballmer is capable of such thinking? No, hes like a dinosaur, that has always done in certain way, and wont change.
Steve Ballmer might be a dinosaur, but he is making incredible amounts of money for his company. I am sad to say that J. Schwartz is not nearly that successful. His sincere approach might look good in the media, but won’t pay the bills I am afraid.
There is not that much money in Open Source business, and Red Hat takes the most of it. Red Hat will kill their business. RHEL is very, very professional peace of software. To be honest, Mr. Schwartz looks a bit lost to me.
I think that they should try to create non-free desktop OS that competes with MAC and Windows, with all the comparative features. They are in position to own the OS code, and it is a great opportunity. It should be a consumer product in the first place, because enterprise desktop is harder to win.
For the enterprise, they should try Network Computer and/or Java Station again. Java Station with Thinkfree Office suite looks promising.
I know that they have been in server business from the beginning, but the times are changing.
HAHAHA I get points taken away because I said viral marketing? It’s an established technique that isn’t bad. It’s quite common and legal. You put stuff out there and hope it gets copied. They’re definitely using OSS to increase name recognition. That way, your name is everywhere. They even said so. This is EXACTLY what viral marketing is. I say they’re smart and get “modded down”. Nice.
From wikipedia: “Viral marketing is a marketing phenomenon that facilitates and encourages people to pass along a marketing message voluntarily.”
How is this not what Sun is doing?
i will love to see Solaris and OpenSolaris be more like Linux … i hope now that Sun is opening up Java openSolaris that day will be more like Linux,BSD