Sun Banks On Open Source For Its Survival 211
CWmike writes "In moving to cut its current workforce by between 15% and 18% today, Sun is trying to stay ahead of a falling knife. And today's announcement made it clear that Sun officials are banking on the company's open-source strategy to help it pull through. A cut of up to 6,000 employees at Sun will hurt, but CEO Jonathan Schwartz contends users will be more inclined to try open-source products such as MySQL, OpenSolaris and Sun's GlassFish application server during a time of economic stress."
Reader Barence also pointed out that Sun will begin to auction "branding space" in OpenOffice.
They dropped $1 billion on MySQL (Score:5, Interesting)
I'm not a software guy, so maybe I'm missing something. But paying $1 billion for MySQL (less than 1 year ago!) didn't make a whole lot of sense to me. Wasn't a lot of the code GPL?
As of yesterday the stock market values the equity at $3 billion. And actually values the company at only $1.6 billion (they have $2.6 billion in cash but also have $1.3 billion in debt).
Maybe a company that throws money around so freely deserves to go out of business. Even in 2008, a billion US dollars is still a *lot* of money.
Re:Long term prospects are not good for Sun (Score:5, Interesting)
They're a systems integration company. They don't need to sell "invented here" to be profitable.
Sun will sell you whatever you want. Invented by Sun, or not.
They sell solutions, not widgets.
branding? (Score:3, Interesting)
Re:Long term prospects are not good for Sun (Score:2, Interesting)
Re:They dropped $1 billion on MySQL (Score:5, Interesting)
MySQL's business model was to sell commercial licenses to people who were too legal risk adverse to use it without one.
Sun, thankfully, has a completely different business model.
They sell solutions. If they don't have to pay for licenses for MySQL they can offer solutions that include MySQL for cheaper than if they have to. Does that add up to a billion dollars? No idea.
Message to Jonathan Schwartz (Score:5, Interesting)
From my perspective (I've used and bought Suns for decades), Sun is heading full tilt down a path towards the cliff edge. What they're doing is 100% wrong.
Their interest in open source is fine, but it's not a good strategy for business profits unless they want to become another RedHat providing Linux services and support --- a role in which they would be coming up from behind very slowly. It's a role for which they're not cut out, because their reputation in the open source world is marginal at best because they've always been half-hearted about it.
Sun needs to stop thinking of open source as a business strategy, because for them it's merely what's referred to as a hygiene factor in social sciences --- it's not a benefit when it's exercised, but it's a severe demerit when it's not exercised. In other words, yes, be fully open with software, but not because it's a source of profits, but because you'll be shunned without it.
For profits, capitalize on what you have: awesome hardware and competent Professional Services. Invest more in your CPU division with its great Niagara processors, so that when Intel is offering 16-core CPUs and talking about 64, you can be offering 256-core and talking about 4096. Take on nVidia and AMD on the SIMD front, so that while they're toying with noddy graphics cards for GPGPU, you can offer 64k SIMD stream processors far more tightly coupled to your host cores.
We've recently entered the Age of Multicore, and you (Sun) have a good reputation in that area, and you know how to build good hardware (nobody has ever marked you down for that). Why not capitalize on your existing skills, resources and reputation in this area, instead of chasing rainbows?
Re:They dropped $1 billion on MySQL (Score:5, Interesting)
Jonothan Schwartz is safe, at least! (Score:0, Interesting)
Sun is both laying off 6,000 people (which will significantly impact vital groups that provide support and engineering for major customer contracts who are already short staffed) AND freezing all salary raises for FY09.
Thank god this is coming after Schwartz already got his $11,000,000 bonus for the reverse stock split that saw Sun lose 85% of its value in just over a year. Thank GOD Schwartz still gets his $60,000 per year stipend for his chauffer. Thank GOD Schwartz has nothing to worry about and can address every problem with more layoffs just as Sun has continued to do since 2001.
Sun has laid off more people since 2001 than currently work at the company. The problem is, they NEED those people and wind up hiring a lot of them back. So the layoffs are constantly necessary to appease wallstreet.
Sun will fire 6,000 people. They will take a $700m charge for this. That will screw up their numbers (like it does every quarter and year) which will further anger wallstreet and devalue Sun in their eyes. And they'll hire a lot of people back in that time. So to appease wallstreet for the negative numbers partially caused by the charge-off for layoff costs, they'll lay off more people. And get back to the number of employees they had just prior to the last layoff. And then they'll take another charge. And then repeat the cycle.
They've done this for most of a decade. It is nothing new.
BUT THANK GOD JONOTHAN SCHWARTZ WILL STILL AFFORD SHAMPOO FOR HIS PONYTAIL AND A CHAUFFER FOR HIS DAILY COMMUTE!
Comment removed (Score:4, Interesting)
Re:No f**ing way. (Score:1, Interesting)
Ac cause I'm modding
There are many different kinds of branding. Schwartz didn't specify (in his blog) what he meant by 'branding', so don't jump the gun.
I seriously doubt that an office doc is going to have 'Sponsored by Dell' either as a watermark or a footnote on a printed page.
What I do see if that every time OO3.x starts up, you'll see 'OO3.x Sponsored by Dell' and their logo. Maybe even a splash screen before a saved document opens. You may even see a Dell logo on a toolbar, like FF or IE.
That's acceptable use of branding.
Re:They dropped $1 billion on MySQL (Score:3, Interesting)
They also sell "MySQL boxes" - that their engineering group has tuned specifically to squeeze every ounce of performance out of the hardware and give it to the database. Schwartz talks about doubling the performance of MySQL on certain equivalent hardware platforms. Presumably anybody could do that, or they could pay for the MySQL engineering team to do it and get it right. Schwartz is banking on it being more cost effective for customers to rely on the MySQL engineering team to do the optimizations than to do it themselves.
Re:Jonothan Schwartz is safe, at least! (Score:5, Interesting)
I work for Sun, and I suspect that you do, too. I'm an "individual contributor" and I have nothing to do with management. Nor do I own any Sun stock.
Since I can't give you the Flamebait mod you deserve - since you should and do know better - I'll point out a couple of things for the benefit of those playing along at home.
The cuts are not likely to come from "vital groups that provide support and engineering for major customer contracts". That would be suicidal; Schwartz, Green, and others at the upper levels have said as much. They are more likely to come from areas that are consistently failing to meet targets or provide cashflow. Software, support, and allied services currently stand the best chance of generating near-term revenue.
And I'm sorry you're so upset that you won't be getting a pay rise this year. Guess what? I won't, either! But you don't see me bitching about it. WTF do you expect? "We're having a major downturn, here's your hefty salary increase"?
If you want to keep your job, you'd better quit whingeing about how you're not getting rich as quickly as you might like and that you're not going to be able to expense quite so many lattÃs as you've been, quit worrying about what Jonathan Schwartz' ponytail is having for breakfast, and start doing something to generate value for the company and customers, because if you can't show that you are, you're going to walk.
Here's a tip: If you're not doing something relating to software or support, get your arse over there and start doing something with a demonstrable benefit to the firm's bottom line ASAP.
Re:They dropped $1 billion on MySQL (Score:4, Interesting)
I think the point was that Sun could easily sell solutions with MySQL without buying the company. So in essence they spent $1 billion on the name.
I believe that part of the purpose of a buyout such as that is to also get hold of the developers.
I am not saying that the whole deal was worth 1 billion, but you have to take the "getting the core developers to be on our boat" into account as well.
Re:Message to Jonathan Schwartz (Score:3, Interesting)
Re:Message to Jonathan Schwartz (Score:4, Interesting)
I quite disagree: open source needs something to run on, and the price-performance of the Niagara is impressive. In the machine room, I'd rather have Sun, IBM or H-P gear than anything built on mas-market PC parts: I hate fixing critical components (;-))
Open source software, on the other hand, is improved by being in a mass market: the price is already as low as you can get, so the effort goes into improving the quality. It's very welcome in my machine room.
--dave
Re:You've never used a Sunfire x4100 x86_64 server (Score:5, Interesting)
Why is it that stupid people always put the blame on the vendor. There must be a pattern in there...
We have over 50 xfires (4100s, 4200s, 4600s) in production, so I feel an obligation to comment on this drivel.
Sorry, either you're just making up shit here or you're the wrong guy for the job.
Re:No f**ing way. (Score:3, Interesting)
I think most people aren't especially bothered by the idea of having automated advertisements sitting next to what they're doing.
Except when you have a mobile dial-up, and you get 3 Gb a month. Then, anything that tries to download anything I didn't tell it to gets deleted, fast. Like MSN Messenger.
Scratching my head (Score:4, Interesting)
1. My kids go to school in the Bay Area. Both have an impressive wardrobe of Sun-logo'd t-shirts (the designs are much better that your average "slap-a-logo-on-a-white-T"). While I'm not complaining, why is Sun clothing my children while laying off 5,000 staff?
2. I've been in the computer business for ~25 years. I've done work with Sun in the past (~15 years ago). I can tell you what business Microsoft is in. I can tell you what business HP is in. Ditto Oracle. Heck I even think I could tell you what business IBM is in these days. I have *no* idea what business Sun is in. Oh I know they own some Open Source apps and once upon a time they made computers around the SPARC processor - but what do they do now? How do they intend to make money and return a profit for their shareholders?
Re:No f**ing way. (Score:5, Interesting)
Somewhere along the line the engineers making cool things were replaced by "Process Black-Belts" who spend all their time talking about "six sigma" and making engineers fill out reams of paperwork to make the smallest change to an existing product, never-mind innovating on something new and cool that the market might want.
Well now Google is the one in the industry making cool things and Sun is competing against IBM with its products. IBM doesn't waste time with Six-Sigma process people. They focus on the customer and build what the customer wants. When you're competing against IBM the problem is that your customers realize that IBM is most likely still going to be here in 20 years and your company most likely is not.
Sun could reverse this process by starting to make cool things again and trusting that if they build it the market will come. I don't really see that happening, though. They'll probably fire all their engineers and keep all their process people, which is exactly the reverse of what they should be doing.
Egos and Racism (Score:1, Interesting)
Also, don't forget the egos. These are the ones in the in the ivory towers. If there is a good project amongst engineers elsewhere in the company, they will ensure that it gets a Design Review at Code Review time such that the reviewers get to redo the project, with bells and whistles, and take all the credit.
It helps if the original project didn't start in the USA, because Sun will always protect American jobs over everyone else's.
Re:Strategy (Score:3, Interesting)
Opensolaris is substantially more stable than Linux
Bullshit. The last two times I tried opensolaris, the installation was catastrophically destroyed the first time that I upgraded it. System wouldn't even fucking boot.
It might be stable if you never touch it, but so is linux, so the difference can't be that great. Besides, an admin is expected to, at the very least, perform security upgrades on a regular basis. Their packaging system is *beyond* broken and smf is a horrible piece of trash that makes you long for the simplicity of rc.d scripts.
Re:No f**ing way. (Score:2, Interesting)
Sun does appear to be reversing the process - this is how the new FishWorks product was developed. They got some smart people, put them in a room together and left them to it, like a startup inside the company.
Now lets see if they can replicate that.
Re:You've never used a Sunfire x4100 x86_64 server (Score:3, Interesting)
Why would you even need a raid controller? ZFS takes care of that for you.