New hopes from Sun's idea factory

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Relevant to the market?

If the market is going in one direction and Sun does a great job somewhere else, how good are its prospects?

Quoting the article:
The Galaxy strategy extends to eight-processor machines due in the next few months into the relatively high end of the x86 market, from which Dell and HP have withdrawn.

If Dell and HP withdrew, they're not expecting this market to be profitable. Is it good for Sun to be the best option in a minimal market?

Or again:
Sparc servers remain Sun's most important business, and boosting Sparc sales is probably the single easiest way for the company to restore financial health, even though market researcher IDC forecasts the $19.1 billion market for Unix server servers will shrink by $200 million during the next four years, while Linux and Windows sales continue to grow.

That's four years of reduced demand in a market with growth overall.

And when Sun does respond to the new market conditions, do they interest potential buyers?

No.

First, they don't market.
Quoting:
Galaxy has other big challenges, starting with marketing. Allen Smith, chief information officer at accounting firm Virchow Krause & Co., is responsible for management of about 100 x86 servers, but he hadn't yet heard of Sun's x86 move until informed by a reporter. Even among Sun's customers, "the dominant majority don't even know (about Galaxy) yet," Sun's Schwartz acknowledged.

and second they can't accept giving the market what it wants.

Quoting:
Sun has to convince customers the Galaxies are worth the price. Smith, for example, said he wouldn't consider Galaxy servers unless Sun improves its Microsoft support to the same level that HP, Dell and IBM offer--or offer a 50 percent lower price.

Captain Ahab nailed a coin to the mast for the first person to spot Moby Dick. He was bored when other whales were found that would produce money for the ship owners and crew.
Sounds like Ahab at Sun has not changed sufficiently.

From the dual processor description:
... [Sun] also sells them with Linux from Red Hat and Novell and supports use of Microsoft Windows.

But not enthusiastically, I expect.


In the meantime, let HP and IBM destroy them in what's left of their core business.

Quoting:
At the same time, Sun has lost share in its most important market--servers running the Unix operating system. In the second quarter of 2005, Sun's Unix server sales dropped 7.4 percent to $1.38 billion, while second-placed Hewlett-Packard grew 6.3 percent...

IBM is also growing.


I have to ask, how can Sun with good products and software lose ground?


The answer I keep seeing is, because they keep trying things that have nothing to do with what they do well.

Quoting again:
It still must turn around market share losses, convince customers its servers aren't overpriced relics and find takers for server software that hasn't been terribly popular.
And some initiatives, such as its OpenSolaris project and its grid computing effort to sell computing power by the hour, are expensive but not likely produce the near-term direct monetary benefit Sun desperately needs.

Are these expensive long-term innovations what Sun needs most?


I think this article, positive in tone, is an indictment of Sun management.

Posted by: Anton Philidor   Posted on: 10/17/05 You are currently: a Guest | Members login | Terms of Use

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