Sun also rises, redux

It was the middle of a brutal recession, the IT industry was in upheaval and everyone was talking about Sun Microsystems. The only difference is that it was 2001, not 2009.

As merger talks between IBM and Sun reportedly collapsed over the weekend, I got thinking about a piece I wrote the better part of 10 years ago on, where I examined the company's dogged determination and its potential for success.

Reading it again, I realize it's a bit of an effusive love letter, but I was looking for firms that would survive, and I was impressed with the courage, ambition and work ethic being demonstrated at Sun. And despite what may or may not happen to the company, I still am. Complete column below.

Sun also rises
There is much to admire in the company's never-say-die work ethic during challenging times
11/1/2001 5:00:00 PM By: Shane Schick

I'm starting to get a Sun-burn, but it feels kind of good.

Suddenly, they're everywhere: Scott McNealy and his band of anti-Microsoft supporters; Java evangelists bragging about market share numbers, high-profile Canadian customers offering grateful thanks for successfully completed IT projects. In the midst of the technology downturn and the American war on terrorism, Sun Microsystems has managed to suffer through the hard times and emerge as the hardest-working company in the business.

On Thursday, Sun's Canadian team was in Kingston, Ont., to open a high-performance computing laboratory in partnership with Queen's, Carleton University, University of Ottawa, Royal Military College and the provincial and the federal government. More than 100 researchers will be using the facility, which will cost about $30 million. In Toronto, mobile application developer Red Knee Inc. said it had chosen Sun as the primary hardware and software vendor for its Virtual Application World, a place where third parties can access its Open Services Architecture and industry standard APIs.

For some companies this would have been a pretty busy day. For Sun, it was just another couple of stops on a whirlwind tour that has taken it through almost every major product segment. Already this week Sun unveiled the latest additions to its UltraSparc III-based V880 low end servers, and key executives flew in from the United States to headline the ninth annual Java and Object Technology Showcase and Forum.

In the meantime, Sun has also begun the job cuts it announced a few weeks ago, an effort that will reduce its workforce by about 3,900 people. This was the inevitable outcome of the US$180 million loss the company suffered in its most recent quarter. The company has since told financial analysts that orders are starting to pick up again, and on Wednesday it announced a US$50 million deal with Shaw Communications for some midrange servers and storage subsystems.

Though both IBM and HP are becoming stronger competitors to Sun's Unix server business, it is proving more agile at reacting to market forces. The deal it hatched with Hitachi a few months ago plugged an important hole in its lineup, bringing it the kind of storage strength it will need to better compete in the high end of the enterprise. The V880 could keep Microsoft and Intel from extending their desktop strength further into the enterprise. The Web services plan it detailed last week will include an instant message application that could pit iPlanet against AOL's offering. Sun's leadership in launching the Liberty Project may offer Internet users a viable alternative to Microsoft's much-criticized Passport.

Sun has always been aggressive, but this recent spate of activity stands in sharp contrast to the overall lethargy that has set in since purchasing has taken a nosedive. Most companies are getting rid of non-core assets, abandoning the sorts of potential spin-offs or niche areas that seemed a safe risk last year. It is important to remain focused, but we need companies that still have the courage to roll the dice.

We also need companies that can demonstrate initiative and a desire to keep the industry's momentum going when fate tries to slow it down. Sun was the first major IT company to host a product launch in New York following the terrorist attacks of Sept. 11. While McNealy's statements that it was important for the company not to “give in” to terrorism sounded a little self-serving (and even more so from the many other companies who have followed his example), we needed someone to make that first move. Indeed, it is not so much Sun's actions that come across badly as the manner in which they are presented. It is time for McNealy and company to drop the “Captive Directory” jokes and other irritating play-on-words about its main competitors. They're not funny (they never were), and McNealy could make better use of the podium. Sun's work with Caprion in Montreal, for example, represents an exciting project that could speed up disease research. Its partnership with Lucent could make unified messaging viable. This is much more interesting than another cheap shot at Bill Gates.

Sun acts like a company with a lot to prove, which is fine, because that's exactly what it is. But it is also putting itself everywhere a market leader should be.

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