Has the sun set on Sun Microsystems? Analysts say no

Despite Sun Microsystems' billion-dollar losses and nearly 6,000 projected layoffs, observers say the company will survive the current crisis.

The news was all bad for Santa Clara, Calif.-based Sun Microsystems Inc. recently: a $1.68 billion quarterly loss, plummeting stock prices, up to 6,000 layoffs, and the abrupt departure of Sun's Mr. Open Source: Executive Vice President Rich Green. As if to ensure it killed the corpse, Sun divided Green's open source division into three new groups: applications, cloud computing and computer systems. Sun's Solaris and OpenSolaris operating...

systems were folded into the computer systems group.

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These changes come a month after Sun CEO Jonathan Schwartz wrote his upbeat blog entry, "Jonathan Loves a Crisis," arguing that Sun was well positioned to benefit from the current financial storm by delivering innovative open source products at lower cost than proprietary alternatives. Numerous stories have also speculated about Sun's demise. One InfoWorld article quoted Jim Zemlin, the executive director of the San Francisco, Calif.-based Linux Foundation, who said that "the future is Linux and Microsoft Windows" and dismissed Sun as a more expensive platform with declining deployments. (Sun server shipments declined 7.7% in the third quarter of 2008.)

We're spending millions, and they couldn't be bothered to make trivial changes to the protocols in the stack.
Tim Happychuk,
regional IT directorSun Media Corp.

For Linux loyalists watching from the sidelines, the struggles of the $14 billion company whose slice of the open source OS market is dwarfed by that of Linux, makes great spectator sport. (When was the last time you read a story about a customer switching from Linux to OpenSolaris?) Still, Sun has the resources to lob a killer innovation at its rival open source community, which cannot afford to ignore it. And for a Sun Solaris customer weighing a switch to Linux versus an easier conversion to OpenSolaris, Sun's turmoil is anything but academic.

After receiving blogger criticism , Zemlin elaborated further on his comments about Sun to SearchEnterpriseLinux.com. This time, Zemlin waxed positive about Linux, which he said represents the "ultimate flight to safety" in a downturn because of its large development community. "No single vendor can match the size of the Linux ecosystem, the diversity of competition, and the price performance," he said.

Sun shortcomings: the Linux view
In an interview last month, Ted Ts'o, a Linux Foundation fellow, echoed many of Zemlin's views and brought up some new points.

For starters, Sun has "really smart people" and "very cool technology," but struggles to reap financial gains from its innovations, Ts'o said. In addition, Sun is a "control freak," making nearly all the significant "community" contributions to its open source code. That model stands in contrast to Linux, whose contributors come from a broad base of companies and unaffiliated individuals, he said. Sun gets control of development but, on the downside, bears the full cost, he said.

"What happens if Sun goes out of business or its shareholders fire Schwartz and replace him with a less open source-friendly CEO? Would OpenSolaris survive in its present form? Probably not," Ts'o predicted.

But Mark Driver, a research vice president at Stamford, Conn.-based research firm Gartner Inc., said he has observed growing interest in OpenSolaris this year from Solaris users who considered migrating to Linux but instead chose OpenSolaris because of fewer transition and risk issues.

Solaris is at a marketing disadvantage against Linux in an "all-or-nothing battle," Driver said. "But all or nothing is never the case. OpenSolaris is a valid solution for a smaller part of the audience."

An unhappy customer
Tim Happychuk, a regional IT director at Montreal, Canada-based Sun Media Corp., can't wait to replace Solaris with open source software for Sun Media's 300-newspaper website. Sun Microsystems hasn't evolved fast enough to keep pace with the dynamic requirements of a large news website and Sun Microsystems' representatives have been unresponsive to Sun Media's requests for simple changes to improve connectivity with other platforms, he said.

"We're spending millions, and they couldn't be bothered to make trivial changes to the protocols in the stack," Happychuk said.

Recently, Sun Microsystems has been more receptive to the newspaper chain's ideas, but it's too little too late: It has burned its credibility with Sun Media because of past stonewalling, the IT director said. No matter how many things it promises, staying with Sun still ties the media company to a single vendor and to that vendor's vision of the future, he said.

"They showed quite clearly that if they don't foresee your request as a market need, you'll learn to live without it," Happychuk said. "On our occasional forays into open source, people jumped out of their way to help and we went from two people with an idea to a worldwide network. It was a lot more fun."

While Sun Microsystems declined to be interviewed, Sun spokeswoman Dana Lengkeek said the breakup of the open source division is designed to accelerate innovation and will align topical units directly with business "pain points" of power consumption, efficiency and virtualization.

Lengkeek also said that Green "chose to leave Sun" and that growing Sun's open source development community "will continue to be important," despite the extensive layoffs.

A still-vital future for Sun?
Several industry sources concurred that Sun's late entry into open source was a costly mistake but concluded that Sun will survive, albeit after an uphill struggle.

Jim Jagielski, chairman of the Forest Hill, Md.-based Apache Software Foundation, said that Sun has the "best and brightest business people in the world" but that it has "resisted [open source] a lot longer than it should have.

"I think Sun will make it, but it will be difficult," Jagielski said. "Sun is poised to be a major player in this new world."

Al Gillen, a research vice president, systems software at Framingham, Mass.-based IDC, said that the Sun and Linux camps each have an edge in different ways. Linux is faster in growing market share, including some growth at Sun's expense, but Sun has more money, he pointed out.

Sun also has a big install base which gives may fuel its continuation for a long time, Gillen said. On the other hand, Sun's success at expanding to the x86 market contributes to the shrinkage of its own Sparc processor hardware footprint and, in turn, less future revenue, he said.

"Sun's operating system business dynamics are changing and are becoming less and less dependent on the pure dynamics of Sun's hardware market," Gillen said. "But there is a place for both [Sun and Linux]. OpenSolaris will continue to be a viable alternative for the next several years."

Gillen doesn't foresee a Sun retreat from open source either.

"Once you've opened the source code, you can't go back," he said. "It won't happen."

Let us know what you think about the story; email Pam Derringer, News Writer . And check out Enterprise Linux Log.

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