John Brady's Weblog

While researching some references for my previous blog on Sun's strategy, or lack of, I came across this great BusinessWeek article on Sun and Scott McNealy -
Sun: A CEO's Last Stand.
As I read through the article, I found that they were making many of the same points that I believed about Sun's off target strategy and the potentially disastrous consequences of them for Sun's future. And these points were backed up by interviews with many previous Sun executives.

The main points I fully agreed with were:

• McNealy's refusal to acknowledge the depth of the downturn in server sales, and to take appropriate action to right size the company. Instead of a one-off large correction, Sun is slowly suffering death by a thousand small cuts.


• The departure of almost all of the top executives, because McNealy would not take the right actions at the right time to keep Sun a viable, focussed company.


• Trying to compete against both Dell and IBM at the same time - offering both mass produced, high volume, low cost entry level servers, and also massively scalable, highly engineered, high performance mainframe class servers. They both have different economic models, and you cannot do them both well at the same time.


• The high cost of the R&D for all of the many different products Sun has. Processors, servers, storage, thin clients, Solaris, Java, identity management, office productivity, and on and on.


• Revenues over 33% off their peaks of 4 years ago - $11 billion from $18 billion. But no corresponding change in the cost structure of the company.


• The mistake of not adopting Intel processors sooner, and missing out as that market grew and grew.


• The mistake of buying Cobalt, and then practically destroying it by hampering its ability to produce new products.

Well worth a read.