What Can He Drive off a Cliff Next?
Hey look - Mr. "I collected a huge payoff for my great success at driving Sun into the ground" Schwartz has a new blog. Looks like he's trying to explain himself. What I'd like to know is this: does he still think that "give it all away for free, and then somehow make it up in volume" is a good business plan?
If so, he's got a great future with the underpants gnomes.
Comments
He Came Too Late To Have Such An Impact
[W^L+] March 9, 2010 19:53:29.440
My perception is different.
I remember Sun being in a near-death state about a decade ago, long before Schwartz took over. Remember that their one profitable business was selling SPARC-based hardware with Solaris on it, and that went down with the dot-bomb, then slowly started growing again as the big banks and investment firms bought hardware to run their simulations and models on.
Meanwhile, Intel and AMD continued to drive the chip market harder, and I don't think they were able to drive enough improvement in their SPARC products to offer enough differentiation. They did enter the x86 server market, but they couldn't get the same margins there. So when the bottom dropped out of the economy, that sole profit engine (server hardware) went wobbly fast.
Looking back, it seems like the MySQL purchase may have been a "Hail Mary" play. Looks like the clock ran out while they were still trying to decide where they were going. (Never forget that Scott McNeally was still Chairman until the end. I think Scwartz was there to put another face on it so that McNeally's grudging acceptance of the need to open up wouldn't require an "I was wrong" speech.)
For most of Sun's software stack, they faced the same challenge that your employer faces. They were being squeezed between Microsoft's increasing domination of the paid sale OS and software development tools markets and ever-improving zero-price open source products. If anything, I think Sun's biggest mistake was indecision. They needed to find a market, and they couldn't decide whether they were a closed source proprietary software company or an open source software company. Most of the open source projects they created were very tightly controlled, such as the JCP and the OpenSolaris project. Even with OpenOffice, companies like Novell grumbled that Sun was a control freak.
Jeremy Allison makes a similar point: [link 1]
[1 http://tuxdeluxe.org/node/303]
Re: What Can He Drive off a Cliff Next?
[anonymous] March 10, 2010 4:00:10.113
Not entirely fair, James. If you look at all the workstation makers from the '80s/'90s out there, Sun has by far been the most successful one. They operated in a dead end market, hung by their teeth, and delivered more value to their shareholders than, say, SGI, Apollo, ...
I think that as far as CEOs go, Schwartz did what the shareholders paid him for.
Re: What Can He Drive off a Cliff Next?
[anonymous] March 10, 2010 4:00:30.653
(that "anonymous" was me - Cees ;-))
Re: What Can He Drive off a Cliff Next?
[James Robertson] March 10, 2010 6:15:29.003
... His starting pile of money was bigger, so it took longer to burn through. I find his payoff exit distasteful as well, in the same way I found the one Bill Lyons got from ParcPlace distasteful.