Sun’s financial problems – what comes next?

Sun has today published a press release announcing that up to 18% of its global workforce is to be cut and that Rich Green, VP of Software, has resigned.

It has also formed a new business group called Cloud Computing & Developer Platforms, for advancing its cloud services efforts.

Sun is a fascinating company, with serious commitment to open source. It is also the steward of Java, MySQL and OpenOffice.org. Despite the software aspect, selling servers is a core part of its business, and its problems now (in my quick opinion) are a consequence of the economic downturn, a trend towards cheap-and-many in the server market, and a rush towards open source without any clear strategy over how to monetize it. No, I don’t believe turning runtime and application downloads into foistware and adware is the solution.

Somehow, Sun allowed competitors such as IBM and Oracle to benefit from Java without reaping equal rewards itself. It is great at innovating but less good at profiting from its invention. Java applets were the first browser-hosted client applications, but Sun did not see the need for something like JavaFX until Adobe Flash and then Microsoft Silverlight showed how this needed to evolve; now it is probably too late.

Another example is utility computing (one aspect of cloud computing), which Sun pioneered with its Grid initiative; but others such as Amazon are now setting the pace in this area.

What comes next – acquisition, recovery, or continued decline?

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1 comment to Sun’s financial problems – what comes next?

  • I feel bad that the employees have to suffer for a company that has lacked a specific goal in it’s business plan. Unfortunately SUN has been teetering for some time now. Hopefully they can use this as an opportunity to properly focus there business model and return to the glory this company originally had.