Merrill Lynch Rips Sun 428
cosjef writes "In an open letter to Sun, an analyst for Merrill Lynch tells Sun to change or risk adding itself to the junkyard of formerly-great technology companies like DEC or Data General. The letter even recommends taking the helm away from McNealy, whose 'brash and contrarian personality have been synonymous with the company's image and success. Unfortunately, the act is getting old.' Sun's mistakes are well documented, but the biggest one is believing that what made them successful in the past would make them successful in the future."
Sun did themselves in (Score:4, Insightful)
Unfortunately, many companies then made advertising and PR their primary products, slashing R&D because they thought they'd had their budget strategies wrong all along. Sun was king of this, apparently thinking a strong brand was what sold systems, not leading edge technology. Engineering went into the toilet, and now while Sun's still good at a few things, all but their most insanely-priced hardware is nothing better than what you get with off-the-shelf commodity components.
Today, people are researching to upgrade and evolve their server networks, not just grabbing the first implementation they think they understand. And that means it takes a lot more than McNealy's I-wanna-be-Steve-Jobs song and dance to sell product.
Re:Sun did themselves in (Score:4, Insightful)
I think mainly Microsoft and Linux did them in more then incompetant management. Today they are going crazy trying to jump into anything to keep them afloat.
Even if they became a cheap %100 Linux company the profit margins would be slim. Also IT likes to buy from one company. If corporate IT standardizes on IBM, HP, or Dell who would they buy a Unix or NT server from? Not from sun that is for sure. Unless its a very specific need that can not be meet by their competitors. Today with powerfull commodity hardware that is less common.
Microsoft really hurt them when W2k came out. Remember that CIO's think standardization == less costs. Most of the time standardizing on only Microsoft makes things worse. There is still no guaruntee of integration either but the suits do not want to here this.
Unix sadly is dying. WIndows and now Linux have eatin it up. Linux mostly replacing Unix but that too according to netcraft( no I do not want to sound like the BSD troll here )is lowering in marketshare because the suits like standardization on MS and
But I actually do think Sun has terrible ways to bring out R&D to the market which could of saved them today.
Remember how Java started as a way to program cable boxes and interactive TV? Sun could not come up with a cost effective solution or Management thought that expensive Unix servers with big profit margins is only the thing they should sell. Its no wonder co-founder and top scientist Bill Joy left.
Any R&D left is being spent with no products being marketed which is fruitless.
Re:Sun did themselves in (Score:2)
Break up the company. Let whatever stands on its own live, and whatever falls... die.
Re:Sun did themselves in (Score:2)
I believe you are mistaken. Or are you referring to the "5% of W2K3-install used to run Linux?"-news?
Re:Sun did themselves in (Score:2)
In 95 and 96 how many Unix servers ran the net? How about in 98/99? WHat about now?
IIS is growing and apache still has the majority of marketshare and will for some time but its going down.
Re:Sun did themselves in (Score:4, Interesting)
5% of win2003 having been Linux is not a big deal(far less than 1% of installed Linux). Had it been 5% of Linux, well, that would have been a huge deal.
Re:Sun did themselves in (Score:5, Insightful)
So what was your point again?
Re:Sun did themselves in (Score:2)
No. No. No. Didn't you get the memo? It's BSD that's dying, not Unix.
Solaris *IS* your father's UNIX. (Score:5, Insightful)
Sun puts all its energy into the Solaris scalability features, and ignores some pretty basic things that make the operating system have the flavor of a Victrola.
Let's just run through a few of the problems:
Sun has this attitude of "if it's not in the SVR4 codebase, then it doesn't go into the Solaris base install." This is just dumb. I realize that it is important to preserve compatibility for old shell scripts and utilities, and that Sun has taken some strides with Gnome and perl integration, but 95% of the new and interesting work in UNIX is taking place in the GPL and BSD spheres of influence, which Sun mostly ignores.
In many respects, Solaris has been at a standstill for the past 10 years.
Re:Solaris *IS* your father's UNIX. (Score:5, Insightful)
Solaris is far more scalable than Linux, more reliable (yes, I did say this...I can point you to research papers), has has more enterprise features (does Linux have Intimate Shared Memory?), and as you say it, "the list goes on".
JAVA sucks? (Score:2)
Now, I know that my programming with java was a horrible failure... but I still see java used everywhere. Is it a successful idea that just has not generated income for the original developers?
Spinning Java away from the parent company would seem like an excellent idea. Why tie the success or fa
Re:JAVA sucks? (Score:3, Insightful)
Re:JAVA sucks? (Score:4, Insightful)
In my experience that's not exactly what is happening. Unix desktop sales were a dead end in the mid/late 90's. Performance improvement on x86 made them irrelevant even in the high end desktop space. So, corporations were starting to look at replacing them with Windows where the workers also had access to other company standard products.
However, in the late 90's Linux started becoming a viable alternative. Combined with better desktop than CDE, more stable than Windows, less porting of unix applications needed, viable solutions for MS software through vmware/wine/ooffice, it became a usable compromise with the best of both worlds. An alternative to switching to Windows, not an alternative to staying with Sun/HP/SGI/IBM.
The marketshare that Linux is taking from Sun and other Unixes is marketshare they've already lost. The fact that it's going to Linux does not change that it would have gone to MS otherwise.
Sun shouldnt fret about marketshare lost to Linux. Sun should be grateful about it because that, at least, allows them to stay in the game, which they wouldnt be able to do if the marketshare was lost to Windows instead.
While Sunss marketing improved they still rock (Score:4, Insightful)
Saying that Sun is focused on marketing more than technology is rediculous to anyone who knows the company from inside. Sun makes computers in the high end that few can compete with. Up to 4 CPU's go with Intel+Linux but when we go over to 8 or 16 cpu's then both cost and performance are on Sun's side.
However Linux+Intel/AMD/PPC(IBM) are getting much better and cheaper and at a point I guess Sun won't be able to compete on the hardware side, and like SGI before it will have to make a switch and let go of the large margines etc...
I feel that Sun can survive that switch, its one of the best managed companies I worked with, thats a true live demonstration of how their own technology can be used to make the employees life easier.
A simplified view would look at Sun's declining server sales and say thats it... However Sun is huge and makes zillions of other things:
1. CPU's and special hardware - Sun ray is actually selling well and limited only by the lack of marketing drive to sell it. It works with Linux also so it allows cheaper deployment.
2. Sun owns Cobalt that make great Linux boxes.
3. Sun has a huge software stack including Solaris (that has quite a few features still missing from Windows/Linux) and star office. This allows Sun to offer an almost full hardware+software stack (including the application server) with the only thing missing being a database server. Only few companies can seriously compete in this level.
4. Sun has several divisions that do outsourcing work for many global companies including cellular operators etc...
Sun has many revenue streams many of which won't dry up even if the whole world left Sparc+Solaris and moved to Linux+Intel.
The reasons for Suns decline are:
1. Moving to Linux+Intel - yes it has a serious effect on the company and changes need to be made.
2. Dot com failure - Suns biggest clients were the dot coms and when they bombed Sun is trying to move into traditional industries. This takes time.
The Sun will rise again although I doubt the Sparc will be there
I have no doubt that these guys can pull it off though.
Re:While Sunss marketing improved they still rock (Score:2)
Re:While Sunss marketing improved they still rock (Score:3, Interesting)
I differ on this perspective. Whether it was a good move or a bad move for Sun to structure their company to a thin client system, I respect the initative for them to "pratice what they preach". They have a vision that thin clients are the way to go. To a certain degree, I completely agree with them. What I find great is that they actually use the technology that they're trying to sell. Not many companies do this and I find it a lack of faith in their own products. For example, I've done a tour of dut
Re:While Sunss marketing improved they still rock (Score:3, Informative)
As a former Cobalt/Sun employee, this is gratifying to hear. But you should know that Sun has completely killed off the Cobalt product line except for the RaQ 550. And that's slated for EOL by the end of this year.
The good news is that the Cobalt-specific code that made up the Qube (UI, etc.) has been released under a BSD license. More info and downloads at http://open.cobaltqube.org/ [cobaltqube.org]. Hopefully the RaQ stuff will be opened at some point as well...
Sun's
Re:While Sunss marketing improved they still rock (Score:3, Interesting)
Granted, they do better in TPC-H, but that's understandable when there is only 4 other system submitted for the catego
Re:Sun did themselves in (Score:3, Informative)
Engineering went into the toilet, and now while Sun's still good at a few things, all but their most insanely-priced hardware is nothing better
I disagree.
Sun's hardware is expensive, but generally pretty reliable. Up until a few years ago, it was worth the money. And still is, but only for a decreasing number of high-end niche areas (64-way systems hooked up to big SANs).
The difference in quality between Sun hardware and PC hardware is not as great now as it was 10 years ago. Back then, people paid for
Re:Sun did themselves in (Score:5, Insightful)
Dell really represents a different market. They're a desktop provider first and a server provider second. Sun are the reverse.
I think Dell and Gateway's biggest success has been in pretty much cloning the IBM of the 80s, only at a fraction of the price. When you were buying IBM, you knew you were buying hardware that would last forever along with full support for as long as you were willing to pay for it.
Dell did exactly what IBM did, but did it with the same cheap parts you could get from anyone else. In the desktop market, you can get away with this much much much more than you can in the server market.
Re:Sun did themselves in (Score:3, Interesting)
I may very well have a cure for AIDS and cancer, but unless I market the cure, no one will know about the product to buy it.
Nope, Sun are Boneheads... (Score:4, Insightful)
J2EE certification....
JBoss which is one of the only Open Source J2EE providers still cannot call themselves a J2EE provider. (Maybe recently solved).
Why is this?
Well, it lies because Sun made it that to become a J2EE member you have to oodles of money, and then you have pay more oodles of money to part of the official "J2EE" club.
Sun has this elitist attitude that says, "Oh, this will cost you because it is meant to be good". And NO WAY THAT WE WILL HAVE OPEN SOURCE cheapen the J2EE products. It reminds me of a Ferrari dealer telling me a Ferrari is better than any other vehicle...
Well, lad-di-da, I just want a car to go from point a to b, maybe carry the kids, dogs, and wife. Sure these "simple" cars are not as glamerous, but at least there is a business.
Now before somebody correct me on how well Ferrari is doing, let me remind them that their parent (Fiat) is dying and Ferrari is only doing better because they bought Maserrati. Maserrati sells for a fraction of a Ferrari, about the same as a high end BMW. Which again proves the point, that businesses grow when things are affordable... This is something that Sun just does not want to learn!
Re:Bah (Score:5, Interesting)
"The Dell strategy, though, includes keeping R&D to a minimum--something foreign to Sun. Says Joy: "All along, Scott [McNealy, Sun's CEO] has maintained R&D spending, so there is some promising new technology coming too.""
Not cutting expenses while revenue going down = low or negative net income = stocks going downhill. Microsoft isn't in better shape than Sun due to their superior R&D, it's because of their superior marketing.
Re:Bah (Score:3, Informative)
On absolute terms though I wouldn't be surprised if Dell spends more than Apple - their revenues must be significantly bigger (their profits definitely are...).
But I distinctly remember in one interview Micheal Dell himself saying that one of th
Re:Bah (Score:3, Insightful)
Eric Raymond too (Score:3, Informative)
Re:Eric Raymond too (Score:3, Insightful)
Re:Eric Raymond too (Score:3, Flamebait)
Sun have some interesting technology in Java and the StarOffice additions to OpenOffice.org. They have made real efforts to interact with the Free Software community by releasing OpenOffice under the GPL/LGPL. We should be encouraging to release more Free Software, not telling them they're dead (when they're not).
Ciaran O'Riordan
Ahhh, more from Eric Raymond (Score:4, Insightful)
Sun isn't going anywhere, and if the Merrill Lynch "open letter" was an official company communication, I'll be shocked. Anyone wanna bet that the guys that wrote it will be called in on the carpet for exposing it publicly? Most public evaluations of companies aren't put into such informal language. "His act is getting old" is a bit suspect.
Sun has 5 billion in cash reserves, and a profitable high end server business that will shrink somewhat, but not completely. It's utterly foolish to write this company off at this point. I know it's a popular thing to do around here becaue of the way they play footsie with Linux, but I'm afraid you all are going to be dissapointed if you're waiting for Sun to go belly up, or be bought out anytime soon.
Oh, and Eric should stick to open source advocacy. Because his economic predictions are kind of suspect at this point....
A better strategy for profits... (Score:3, Funny)
If all else fails, they could get Windows to run on their servers, can't they?
-
Re:A better strategy for profits... (Score:2)
I'm sure this is tounge-in-cheek but...
Look where it got DEC... Windows ran great on Alphas. I would not consider getting into bed with MicroSoft a safe move. It is like asking a boa constrictor for a hand getting out of quick sand, he will pull you out just to crush you.
SUN is doomed unless McNealy steps aside.
Re:A better strategy for profits... (Score:2)
Sun will be fine (Score:5, Insightful)
Seriously. If you want to spend $5000, $8000, or even $75,000 on a computer, you can go to Dell. But, if you're looking to drop $1.3 million on a computer [sun.com], you go to Sun.
For anyone that has used sun hardware, we know. It really can't be beat. The stuff is fast, scalable, and bulletproof. Sun OS is about as stable as they come.
~Will
Re:Sun will be fine (Score:5, Insightful)
- For calculations that do not have inter-calculation dependencies, you can spend your millions on a blade-based infrastrucuture, running your choice of x32, x64, or Power based blades, all depending on the type of work you want to do. you will run Linux on these blades, and can mix and match architectures as your requirements dictate. This solution will give you greater flexibility, significantly higher price performance (that only increases as you deploy more) and will allow you to design the infrastrucutre to your applications' needs, rather then designing your application to your infrastrucuture.
- Alternatively, if you have higher NUMA or shared memory requirements, you can deploy a big-ass pc [sgi.com] running Linux, also delivering you a higher price-performance then you can expect with Sun.
At the end of the day, the high-end Sun stuff, like the 15K etc, are expensive, fickle and frankly, not very fast. Check top500.org if you really want to know. In the past year, we have placed quite a few bids for large systems on a linux/blade architecture, and we win over Sun *every* *single* *time* - and that is based on the simple question: "how much processors power and real results will I get for my dollar?". Pharma, big finance houses - they are all running away from Sun as fast as they can.....Re:Sun will be fine (Score:5, Insightful)
Suns advantage over other platforms in recent years is their advanced Disk I/O capability. High speed disk arrays are far more important, and the abiltiy of the bus to handle that throughput are far more important to large databases than either CPU or shared memory. A mutli-terrabyte data warehouse isn't benfited by the faster CPUs you mentioned, or by the memory technologies you mention. Fiber-based disk arrays and the like are what is needed.
Re:Sun will be fine (Score:2, Insightful)
Also newer 8-16 cpu Itanium and Xeon systems are faster because their cpu's have 400% the processing speeds of the latest SparcIII's.
Combine that and also the obsession to standardize on one platform( hmm which platform is most prevailant on desktops to integrate with?) and you get the picture.
Anaylists do not care about current profits. They care
Re:Sun will be fine (Score:2)
The SPARC architecture will always outperform an Intel architecgture, even at 1/100 of the clock speed.
Using clock speeds to measure processors is a clever ploy by Intel to market it's processors.
Re:Sun will be fine (Score:2)
SPARC at 1.2GHz has SpecINT of 642 and SpecFP of 953.
The highest numbers for Xeon are 1242 for SpecINT and 1173 for SpecFP
IOW, you have a doubling of speed for INT and about 23% for FP. There are also other reasons for using Sun, not least of which a well run-in operating system (Solaris) which can scale up to dozens of cpus easily (up to 106 in a 15K, although you're generally limited to 72).
Finally, Xeons are not 64-bit CP
Re:Sun will be fine (Score:5, Interesting)
For now. At "for now" is a very, very short time. Sun simply doesn't have the technology resources and financial wherewithal to make SPARC a mainstream, widely supported processor that is able to stay ahead of a rapidly accelerating market. IBM, AMD, and Intel are all shipping 64 bit chip sets and most of the hardware configurations being built around them will far outpace a comparably priced Sun box without busting a sweat.
Sun continues to rest on its laurels as the "premiere" platform for academic and scientific applications. Unfortunately, the market has long since overcome that fallacy and Sun will never recapture the high end workstation market for the simple reason that it no longer exists. Even moderately priced desktop boxes outperform Sun's best engineering workstations from just a year or two ago. So other than the ego boost ascribed to an academician with a Sun box on his desk, it's hard to argue there is any value in selecting that workstation option at this point. Sure, there are legacy software issues with stuff written to proprietary Sun graphics or clustering APIs, but that stuff all has non-proprietary solutions now that make porting quite easy.
Sun's only other market, high performance Internet servers, evaporated with the DotCom bubble. They're stuck holding a fist full of defaulted loans, cancelled leases, and warehouses of repossessed server boxes in the wake of that carnage. Nobody's interested in going that route again.
Seriously. If you want to spend $5000, $8000, or even $75,000 on a computer, you can go to Dell. But, if you're looking to drop $1.3 million on a computer, you go to Sun.
Now there's a brilliant reason to purchase a computer -- that it costs $1.3 million. Odds are likely 100% that you can purchase a superior system from a non-Sun manufacturer for an order of magnitude less now. You basically make Merrill's case for why Sun will be dead in 2 years. The pool of idiots willing to plunk down $1M for a box to serve web pages dried up 2 years ago. Look at how people do it now (i.e., Google, Yahoo, etc.) -- racks and racks of cheap, redundant commodity servers. Where's Sun's answer to that?
Bye, Sun!
Re:Sun will be fine (Score:2)
You're absolutely right that Sun's big iron isn't needed for web pages. Previous posters are correct that the SPARC cpu isn't a great performer today. Sun's niche is the terrabyte sized data warehouse. Data warehousing apps typically require large memory and high bandwidth disk i/o. Sun's disk arrays are still high performers.
Re:Sun will be fine (Score:2)
Now there's a brilliant reason to purchase a computer -- that it costs $1.3 million. Odds are likely 100% that you can purchase a superior system from a non-Sun manufacturer for an order of magnitude less now. You basically make Merrill's case for why Sun will be dead in 2 years. The pool of idiots willing to plunk down $1M for a box to serve web pages dried up 2 years ago. Look at how people do it now (i.e., Google, Yahoo, etc.) -- racks and racks of cheap, redundant commodity servers. Where's Sun's answ
"They are dead Jim.." (Re:Sun will be fine) (Score:5, Interesting)
We competed with Sun. We found that the Sun machines could not hold a candle to the SGI (or IBM hardware, and occasionally the HP hardware when they got their heads out of their asses every few years). It was well known by our customers, and often repeated to us as a reason to bring us in, that Sun gear was simply not fast. It was quite hard to justify spending hundreds of thousands of dollars on gear when VPs desktops often were able to run some of the benchmark tests in similar time to the Sun gear.
Sun machines are not fast. They are quite slow. Solaris is not a paragon of stability. One of our customers pointed out their charts of availability to us. One of the most available machines was a PowerChallenge box I had set up in their computing center. Had been up and functioning under heavy load for something approaching 2 years, without an unplanned shutdown. One of the least available machines was the Cray SuperDragon^H^H^H^H^H^H^H^H^H^H^H^H^H Sun Starfire machine which was not able to stay up long enough to complete the benchmark acceptance suite. Many of our other customers noted this as well.
SGI is now a small fraction of its former self. It abandoned the Beast and Alien (2 amazing CPUs, due in 1999 and 2001 respectively), courtesy of Forest Basket and his inept reasoning, and went whole hog for Itanic. Some of us warned the company that this would be the undoing of the company. We were ignored. We were also right. Management had assured us that Itanic would take off, and be the next big thing. Yeah. Right. It appears now that the next big thing is Opteron. Too bad they bet the company on Itanic.
Sun has some similar choices ahead, though its technology is not really all that good. Some things are of interest, like the "java" desktop, which sounds like an S/ID card with a server and remote thin clients. Neat, but requires some serious networking infrastructure. Also, java aspect is irrelevant.
Java itself as a technology is a solution in search of a problem. Yeah, it is everywhere. Should it be? Is it really the correct solution to most of the problems? No, not by a long shot. The more I see it deployed, the larger the sale of a bridge I see... It is a language seeking to become an operating environment/system, targetting windows and everything else. It is supposed to be write once run anywhere, but the reality is "write 3 or 4 times and debug everywhere, and then grouse about how slow it is, while rabidly defending the decision, which you are questioning yourself, to use it for such a mission critical application".
Sun has some rather serious challenges ahead. Its hardware simply sucks rocks. Its software ain't all that good. Java is the jack of all trades, master of none.
Time for re-invention. Split out the SPARC, replace it with Opteron. Ditch lots of the software. Spin out Java. Give it a fighting chance to morph into something useful and find a real direction on its own. Sell off or close down the rest.
With McNealy at the helm, this will never happen.
Re:Sun will be fine - ha! (Score:2)
Oh come on, you've obviously not used anything else. We had to compare 2 servers - one from Sun, one from IBM. The IBM one was not only cheaper, more powerful, just as easy to manage (one of the CPUs was DOA, the engineer came round, whipped the unit out, slapped a new one in, said 'there you go' and was off), but also could close its door properly,
no, they won't (Score:3, Insightful)
Just because Sun overcharges for their computers doesn't make them a "high-end market provider".
If I'm going to spend $1.3 million on a computer, I might just as well go with IBM. Of, depending on the application, set up a large cluster out of PC hardware, like Google and many other companies.
As far as I can tell, the only thing that has been keeping Sun above water is the fact that they used to have proven, high-end multi-process
In related news (Score:4, Funny)
More predictions for Sun to ponder (Score:5, Informative)
For Gods sake, leave Sun alone (Score:4, Insightful)
Please please please leave Sun alone - after all, _they_ are running the business, therefore it's their responsability, no matter if success or failure happens.
The concerted "efforts" to "rescue" Sun, to bring it to the path of righteousness look very dubious to say the least: on one hand everybody and his sister seem to enjoy firing on this particular ambulance, on the other hand nobody seems to want to miss the feeding frenzy over some presumable defunct company. The last example was given by ESR: http://newsforge.com/article.pl?sid=03/10/02/12402 43 [newsforge.com].
Give the poor people a break!
Re:For Gods sake, leave Sun alone (Score:2)
Wrong. As a public company it is their and Scott McNealy's responsibilty to be profitable and sucessfull at any cost!
These fiancial companies pump billions and pay McNeal for thier return. Also they represent millions of investors who put their hard earned money into it. They have a right to demand this.
If they do not like it th
Merryl Lynch should take its own advise (Score:5, Insightful)
I don't understand why people trust analysts (Score:5, Insightful)
1) if they are so good at analyzing the market and which company will do good / do bad, why arn't they sitting around with billions, but instead slaves away at financial institutions?
2) how many analysts spoke out at the beginning of the dot com bubble insightfully? (i.e. "this won't last?") IIRC everyone, yes including the analysts, were basically like "hey everybody what a wonderful opportunity! buy buy buy!"
3) AFAIK analyst predictions on stock / company performance has never been any more accurate than random guesses or predictions from a layman (within error tolerance) - I believe the reference was fool.com;
so, can anybody GIVE me a reason why market analysts should be trusted for their opinions? Besides that they went through a couple years of economy schoool (which, according to my acquaintance studying economy, is mostly like astrology)?
Re:I don't understand why people trust analysts (Score:2)
Nothing wrong with that; the stock was sky rocketing so "buy, buy, buy" *was* good advice. The truly shrewd and insightful financial analysts were the ones that said "sell, sell, sell" before the bubble popped. Thinking back though, the only person I can recall who commented on
Re:I don't understand why people trust analysts (Score:3, Insightful)
--dave
Re:I don't understand why people trust analysts (Score:3, Informative)
But remember that they are nothing without customers like yourself who give them billions in return for a share of the profits of stocks.
If a company is underperforming they should tell the customer and not keep pumping money in them. They want and need a return to give to you and themselves.
Sun is having trouble. Almost all IT companies are. A
Re:I don't understand why people trust analysts (Score:2)
That's exactly the issue that the industry has been grappling with over the last few years. All too often, an analyst from a large financial firm (i.e. Merrill Lynch) would ostensibly be generating reports for the investing public, but the investment banking wing of the company would place pressure to pump up those firms and help drive the IPO's and other financing transactions that bring in huge profits to the banker.
Bottom line: I wouldn't ever trust an analyst
Re:I don't understand why people trust analysts (Score:2, Insightful)
2) That was damn good advice at the _beginning_ of the bubble. There were voices that urged selling before the bubble popped, but they were mostly drowned out by the cries of "The old rules don't apply!"
3) Over the long term, I agree. On the short term, they can be quite accurate. Additionally, it doesn't take any kind of genius to see that a company that is losing a lot of
Re:I don't understand why people trust analysts (Score:2)
Think about all those "get rich quick" guys with infomercials and books. They get rich quick by selling you their stupid ideas which dont work.
The irony is of course, like market analysts, they are making their money off you, not what what they are peddling. Analyst predictions are little more than a guess - nobody can predict the future. If there was ever a sure-fire way to make money with no risk, well everyone would be billionaires in a day and infl
competative disadvantage and PR flim-flamming (Score:3, Insightful)
Meanwhile, they seem to be able to demonstrate a positive cashflow even with a tough economic climate. This is a good thing, but they continue to have "one-time" expense every other quarter.
Merrill is wrong when it comes to R&D, this is clearly the only thing that can save Sun now. You don't win in the technology game by promising things like the Sun Java System; you win by demonstrating technology that cannot be obtained elsewhere.
Open Office / Star Office (Score:3, Interesting)
Taken in context... (Score:3, Insightful)
DEC vs SUN (Score:2)
Personality? (Score:2)
Sun is just following SGI down the tubes (Score:5, Insightful)
Sun fell down on the workstation side a long time ago, but their servers were hot thru the
Re:Sun is just following SGI down the tubes (Score:2)
Man, the chip doesn't suck, it just came too late to take away much from the big iron. Itanium actually did beat most of the big iron 64 bit chips, and without shortcutting to 32 bit mode, like most of the others do in benchmarks, except Alpha, which is another 64 bit only chip.
It also has lock-stepping, which is important for computation checking for true high availability systems (think Himalaya systems), few architectures have that.
It _is_ expensive and hot though, an
Re:Sun is just following SGI down the tubes (Score:3, Interesting)
Itanium *does* (finally, at this point, six years or so late) beat most of the 64 bit big-iron competition.
However, what it does *not* beat is Opteron, which is about as fast (faster on int, slower on fp), much less expensive, ru
But don't forget... (Score:2, Informative)
That said, I think Sun is already dead. Two billion in cash is all that is keeping the corpse from rotting.
I can forsee (Score:2, Insightful)
Translation: short Sun (Score:2, Flamebait)
tr < OpenLetterToSun
I have shorted the shit out of Sun stock, and now I want it to go down like a Clinton Intern. I will now rip you a new one in an "open" letter targeted not at Sun but rather at the sheeple who day trade.
Once your stock price bombs out, I will make a killing, then buy in at the lower price. After that, expect another "open" letter praising Sun to the heavens, in order to pump the stock back up.
God, I love being a market manipulat
Merrill Lynch == crap (Score:4, Interesting)
As a former quantative analyst, I can say this about the larger brokerage houses. They have an agenda. If they can generate enough hype (up or down) about a company, true or not, they wind up right, because the uneducated/ignorant masses follow their "leads" like lemmings. It's a simple business from ML's perspective. If you build it (the hype) the will come.
So in summary... (Score:2)
Bloke who has only ever worked at a bank, says that a company who have driven technology innovation for 20 years is buggered because the world has changed....
Oi Sherlock... who changed it ? I'm sorry but these analysts get on my nerves sometimes. These are the sorts of people bumping SCO, while dumping Sun who only have a couple of billion in the bank, are cash positive each quarter and have FINALLY realised software is important.
Sun are rubbish at marketing themselves, but most of what this analyst say
This analyst (Score:5, Informative)
sun + novell + apple (Score:3, Interesting)
- sun for their server kit
- novell for their networking
- apple for desktops
- os would be jointly developed using the fantastic ximian guys, the OSX team and the JAVA boys.
Anyone Remember DEC (Score:5, Informative)
Funny thing was while some of the equipment (VAX-xxxx, PDP-11 series) were excellent, most of it was an incredible pain. The PC-350 were based on the PDP-11 architecture but wouldn't run any of the common PDP-11 operating systems. Whats more the 350's couldn't even format their own floppies. The mainframes (DEC-10,DEC-20) while solid systems suffered from unique features, 36 bit word size was my favorite.
Anyway, at one point Ken Olsen, the then CEO of DEC came to give a speach/pep talk about the great advances we were making and how wonderfull DEC would be in the future. In his q/a session he had 3000 angry engineers asking him how his company could foist off pieces of crap like the 350. His response was that we lacked an understanding of how his business worked.
DEC is but one. Technology companies must understand that they are about serving customer needs, not their own arrogance. I can go down the list of for days citing companies that either felt they were successfull so nothing could happen, or they were unique and nothing would happen, or they were just plain arrogant.
Scott Mcnealy has always been on the plain arrogant side. Suns products have always been priced very high, and they have never been willing to make the effort to penetrate mass markets. The funny thing is I really love their equipment, the same way I really love apples. The problem is I can't bring myself to buy it or recommend it in most circumstances.
Don't trust share prices or firms as an oracle. (Score:3, Interesting)
And it's good to look at the fact that it only reflects the beliefs of people who are geed-aware enough to trade shares. Most of these people are usually uninformed enough about reality as to trust the firm-provided analysts when they say things like that SCO's IP-blackmail business plan will be a complete boom.
See SCO's trades rising? That has nothing to do with reality, as anyone who recognize the nonsense in the phrase "I own UNIX" can tell.
Several financial firms seem to have already spoken about the "critical" and "wrong" situation of Sun Microsystems and exactly which percentage of layoffs they shall apply. Maybe they're right, but, as usual with analysts and their habit to work on none or little real information, I'd say they guess, as they do most of the time.
That is, if they're not actually trying to trigger some share-price-waves for their own benefit.
Personality leaks in the company may be a better indicator to use, and the fact that their upper layers are trying to ignore the Free Software/Open Source phenomenon (just like Microsoft did before; they no longer do; they now have a "Linux Chief" for a "Linux Strategy" consisting on destroying Linux) shows they have the same short sight that Microsoft did. However Microsoft has a lot of money from their dominant business, that buys them some time to try to react, whereas Sun may have not so much time left.
Will they want to see the lion running on them for a meal? I hope they'll do. But pretending to see the future would be behaving like all those financial analysts.
But if they go down in the end, I only hope Java gets open-sourced, rather than it getting bought by Microsoft in order to shut down the technology.
Merrill Lynch owns $1.1Bn Microsoft shares (Score:5, Interesting)
see here [theregister.co.uk] for some detail of "the loon" as The Register call him.
Re:Merrill Lynch owns $1.1Bn Microsoft shares (Score:5, Interesting)
Yes I was considering the first half of the letter to be pretty much spot-on, then I got to the phase-out of SPARC and I knew that he was out of his mind. When will companies learn that the only way to compete in today's market is to NOT dump your crown jewels of technology in favor of an AOL'er me too on Intel. It's the #1 way to KILL your company. Carly's already started it with HP, and she's killed their processor arch, Compaq (nee DEC)'s, Tandem's, etc. And she's fired lots of people, bought two planes (with plans for 3 more), and continues to churn out sh*ty PC's... Their entire product line has taken on a relatively cheap look... enough about HP, though... the point is Sun really needs to do a few things to turn around. (Most likely... i.e. success is still dependent on a lot of unpredictable things)
1. Consolidate and simplify their software product lines... middleware etc. But put lots of R&D on the most efficient and useful products
2. Place lots of R&D on SPARC... it needs to be competitive with POWER... so they need to catch up a bit. It needs to break 1.5-2Ghz (but still be the elegant architecture it is... no corner-cutting)
3. Slash all server margins... especially in the high end... still keep them large enough to cover R&D and modest profit... but none of this milk you dry kind of pricing. Offer special deals on bundles of servers that are extremely compelling.
4. Keep up the Mad-Hatter stuff and treat Linux and the OSS community better... a little closer to Apple would be appreciated... none of this posturing towards other companies like IBM about how we are immune to SCO etc.
5. Simplify and possibly divest some of their x86 stuff. They really haven't done so well with Cobalt HW. I'd love to see Cobalt HW return to MIPS... especially if they can do some really awesome stuff on an embedded scale...i.e.
How would you like an ultra-silent, fanless rack of 42 servers that uses less juice than your desktop PC yet outperforms it by a factor of 10 and has no moving parts to break (Flash disks). A partnership with SGI would help... but SGI would also have to ditch the "milk the cash cow" mentality. Something that would allow cross-licensing and development of a PowerPC analog to R16K and beyond. Or they could just use PPC... it's a great option and cheaper in volume than the equivalent x86 on embedded scales.
I do like their new Java enterprise pricing thing... I think it will help a lot, but without some nice whizbang competitive hardware, it doesn't have full impact. It's time to see US IV in widespread use and US V and VI on the way.
Steve Milunovich, advice for Sun (Score:5, Interesting)
One of the advantages of reading Steve was that he did his own surveys of Fortune 100 (500?) CIOs, asking about budgets (ie future system vendor revenues) and various topics of the day (ERP deployments, etc). So I found his comments that Sun should make contrarian bets but "do so in ways palatable to conservative CIOs" interesting. Steve may have some unique insight into that.
What's a little odd to me about Steve's advice is the contradictions in it. At least based on the admittedly summary article linked here. On the one hand, he seems to advocate a "batten-down-the-hatches"-type strategy: cut R&D, dump SPARC (eventually), don't make waves, be more Linux friendly. And on the other hand he seems to say "make contrarian bets". It may be that Sun is just doomed due to volume economics (although in fairness, they have always been *way* more focused on that than every other Unix vendor in my past discussions with management I met in my past life), but the "batten-down-the-hatches" strategy seems more likely, not less likely to lead them down the "DEC, Data General, Compaq" path. Sure Sun needs to be shrewd and somewhat conservative in cutting excess spending. Maybe that *is* what they need to do to stabilize their stock a bit. But that isn't how they're going to avoid the 'computing graveyard'.
Although if you are doomed to the computing graveyard (something I thought was true of Sun in 1995 but Sun did stunningly well the following five years), it is true that the most prudent thing to do is spend your remaining strength as conservatively as possible. I don't have any easy answers myself for Sun. I can't fault Milunovich for trying, but the advice doesn't look particularly helpful to me.
--LP
Re:Steve Milunovich, advice for Sun (Score:3, Insightful)
Re:Steve Milunovich, advice for Sun (Score:3, Insightful)
Unlike IBM, Sun has chosen not to integrate their Unix knowledge with the commons that is the Linux source tree. That is, while IBM now develops their
Sounds familiar (Score:2)
This sounds an awful lot like the music business. However, I don't think that Sun is in that position. There are some expensive systems out there that rely on Solaris boxes running the show, and most of the time those machines seem quite capable of doing the job well. Sure, it may be expensive, but when a company is shelling out $50K for a new system, pe
This is extrodinary. (Score:5, Insightful)
Solaris is critical to why users like Sun. Being late to Linux is unforgivable both because Linux is a kissing cousin to Unix and because Linux is a disruptive threat to Microsoft.
Sun needs to convince users that Linux is a subset of Solaris and push two messages: (1) if you're doing Linux, go to the Unix expert, and (2) use Linux on the edge, but when you need mission-critical capability it's time to graduate to Solaris.
That's incredible. Since when should a technology company be worried about disrupting a competitor? Nuts. Sun should make all the money it can and if it does so by taking share from a competitor's inferior offerings, that's great. Merrill Lynch is attempting to halt technological progress in order to protect it's worthless Microsoft holdings. This is ass backward, they should be looking out for their investors by urging them to sell Microsoft.
Re:This is extrodinary. (Score:2)
Linux is disrupting Microsoft not Sun, so he's basically complaining that Sun the so called "unix expert" should have been playing Linux a long time ago to intentionally disrupt Microsoft; instead of doing the "Linux? We don't see any benefit in that OS" dance for the longest time. If Sun would have cosied up to Linux and put out a strong message (instead of the extremely wishy-washy one they put out now) Sun could
nope. (Score:3, Insightful)
While you and I know that Sun should have embraced free software long ago, ML's Milunovich recomends just the opposite. Recomending that Sun make it clear that they "aggresively support Linux" he also recomends that Sun cut it's own development efforts, " [Sun's]Solaris, Linux, Orion, Mad Hatter, N1, SPARC, x86, storage, Java-'The Network is the Computer' tent is bursting at the seams," he wrote of some of Sun'
Analysts don't work for you (Score:5, Insightful)
- To benefit the analyst (bonuses etc.)
- To benefit the bank or banking clients (see point 1)
- Publicity
The good of the standard investor or the company being invested in doesn't even come into it. The fact he's made this an open letter means he needs Sun's stock to move for one reason or another.Merrill Lynch w/out integrity. Sun should ignore (Score:5, Insightful)
But my experience with Merrill Lynch and my brother's experience likewise is that they are without integrity. Therefore, you cannot trust anything they say.
Just as an example, you read their advice to "convince Linux users that Linux is a subset of Solaris..."
Bud, that ain't going to happen. SCO is too busy with the exact same thing. And yes, it's great for their stock price, especially since a Microsoft-club investor is buying up as much stock as they can.
But SCO isn't healthy.
Of course, their other advice, to slash the workforce, is also in the same line: it is detrimental to the health of Sun. Let me explain what happens when you slash the work force.
First of all, all those employees who thought that they had reasonable job security, get depressed. Depression means more time wasted. It means decreased efficiency. That means more cuts, down the road. Eventually, it means you outsource everything, and end up as a shell (though maybe an IP shell like SCO, which generates lots of volatility, which might be good for Merrill Lynch).
Second of all, when you cut the workforce, employees get paranoid. That means that they start to decide that they don't have the authority to stick up (the nail that sticks up, getting hammered and all). So they don't try to innovate. In fact, they squelch innovation. They try to make it look like they're doing as good a job as anyone else, and aside from that avoid notice.
Worse than that, it sickens the company in another way: ...
Suppose you have n employees. The internal threats to a company are a function of the number of employees. A failure can happen with any one of the n employees. Or it can happen with any group of 2 employees. Or with 3 employees. All together, the probability of a failure occurring is
n + n*(n-1)/2 + n*(n-1)*(n-2)/6 +
Now, at the same time, employees don't like to see their company fail, so they do try to fix things. But their ability to fix things is a function of their authority. If their authority is not enough to fix it, then the fix won't happen, and the company takes a loss of some amount. So the same equation as above applies to the number of employees with authority: ...
a+a*(a-1)/2+a*(a-1)*(a-2)/6 +
Of course, a is less than n. So the health of a company is greater if a=n, or is as large as possible. But when you're making cuts, even employees who are nominally with authority act like they have no authority. So every single little cold, every single angry statement, every single office affair hurts the company and results in real damages.
So Sun, Don't Listen to Merrill Lynch. Unless you first exchange all your stock for all of theirs in a 100%-100% stock swap. It might not be a bad idea, at that. From the open letter, I'm sure Merrill's market analysts know how to build hardware and write software. And at that, I'd trust you guys with my assets a lot sooner than I'd trust them.
Sun allowed Linux to slowly kill them (Score:2)
ML may have an agenda, but. . . (Score:3, Interesting)
Earnings Per Share (ttm): -0.75
Profitability
Profit Margin (ttm): -29.99%
Operating Margin (ttm): -23.82%
Management Effectiveness
Return on Assets (ttm): -23.85%
Return on Equity (ttm): -42.61%
2) Consider the competition. NUMA, RCU, and JFS, for Linux just came out within the last year. Also within the last year: 64-bit processors from AMD, Intel, and Mototola. The competition is catching up fast, and not just on the low end.
Merill & Linux (Score:2)
complacency (Score:4, Insightful)
Sun seems to be displaying the same behavior as a small retail shop being outed by a new supercenter. Instead of trying to innovate, Sun is holding on to its existing business model for dear life. The only difference in this scenario, is that the supercenter is Linux on commodity hardware.
This is so sad to watch. (Score:2)
But he can't see that you see, for Scott only has
HP Just annonced 25K$ for sun customer switch (Score:2)
Another proof most analysts suck (Score:4, Insightful)
This guy tells us what everybody already knows: Sun's not going well, the stock is plummeting, sales are low, market shares are shrinking, their position in the server market is unsustainable... Thank you buddy!! Do you realize all of this already hit the mainstream media? It's not news for anyone who just follows the tech industry casually. Add some obvious generalities : "Sun's mistakes are well documented, but the biggest one is believing that what made them successful in the past would make them successful in the future." All in all, we have a random guy trying to make us believe that he's smart.
So long for the diagnosis. And what cure does he suggest? Cut and focus, fire the CEO, be acquired... blah, blah, blah... Standard cut&paste from recommandations to ANY firm that's not doing well.
This "open letter" would have been useful 2 or 3 years ago. It would have been interesting if Merril had a clue about what's really going on at Sun and which options they have left.
Analysis involves more than reading the press, going through the accounts and talking to the CEO twice per year. If you want to have any informed opinion on a large company (especially in the tech sector), you need to talk to R&D, talk to the product marketing guys, appraise the quality of the people, have a clue to where the industry is going, evaluate customers' and employees' loyalty...
That's a tough job. Far tougher than picking easy scapegoats (McNealy). If you're not prepared to do it, better find a real job.
SPARC is a better 64 bit platform than opteron (Score:3, Interesting)
SPARC has no such need for backward compatability. SPARC runs solaris apps, all of which are 64 bit native. They can optimize for it with out have to have a parallel instruction path for 32 bit apps. There are years of upon years of scientist time dedicated to optimizing the SPARC chip, and tuning the Solaris code to make the most of it.
Saying that Sun should abandon SPARC for Opteron hides a fundamental difference between these two processors.
Re:Analyst's Perception is usually distored (Score:3, Funny)
Good trick, that, to work for a company in the 70's that was founded in 1982. (with only 4 employees too) Sun Getting Started [sun.com]
Wheeeee.........Ah, I see that was an AC.
Re:Analyst's Perception is usually distored (Score:4, Funny)
Bruce Perens, eh? I heard he was dead at 54? Truly an American Icon.
Re:Analyst's Perception is usually distored (Score:3, Funny)
I've worked for Sun in the late 70s and again in the mid-80s as a contractor.
Interesting... Since they didn't exist until 1983.
Even though Sun may have lost their chief scientist, Bruce Perens
You mean Bill Joy?
Re:Analyst's Perception is usually distored (Score:2)
Re:Analyst's Perception is usually distored (Score:2, Insightful)
You do realize that was nearly two decades ago? That's like a century in computer years.
Mad Hatter
Mod parent down... this is a troll (Score:2, Informative)
Sun was founded in 1982... see Sun's website [sun.com]
Bruce Perens worked for HP... see article here [slashdot.org]
The Checkpoint firewall is not a Sun product... see Checkpoint Software Technologies [checkpoint.com]
Re:Analyst's Perception is usually distored (Score:2)
Anway, Solaris and Unix in general is dying thanks to Linux and Windows2k.
THe perception I think is accurate in many ways. Sun should of got into newer markets. Sun just happens to be failing the least while HP and IBM make money from other products to make up the losses.
Your right about innovative people but that does not matter. Sun ignores all of R&D with no commitment on products or they can not come up with cost effective so
there is value here, Sun does have problems (Score:3, Insightful)
So they are selling what? A roadmap to the future? Software and hardware vaporware?