Last week I attended an interesting dinnertime event at Silicon Valley's Churchill Club. For the sake of full disclosure, I’m on the club’s board of directors. The main attraction was Sun CEO Jonathan Schwartz, being ably interviewed by New York Times journalist John Markoff.
I’d never seen Schwartz in action before, and I was impressed. He’s poised, self-effacing, articulate, and likeable. Only one problem -- he couldn’t seem to articulate a coherent strategy for Sun, a company that a lot of people in the IT world would like to see brought back to life, including me.
Schwartz started out by talking about his blog and his efforts to improve corporate transparency by putting his thoughts directly onto the Web for all to read. He said he does it because he doesn’t have $1 billion to spend on advertising -- it’s an effective way to reach out to the developer and customer community and tell them what Sun’s up to.
I admired his optimism, but that’s just the problem -- the world doesn’t really understand what Sun’s up to, what its game plan is, what it’s trying to be when its grows up. Sun 2.0, as it were.
Challenge No. 1: Sun started off as a hardware company, then got into software (Java), and couldn’t figure out how to make money off it. Now hardware is getting commoditized -- increasingly invisible under a virtualization layer below which CIOs just care about cost.
Challenge No. 2: Sun’s best customers perceive it as legacy and are desperate to ditch its big boxes in favor of cheaper horizontally scaled clusters that run an OS that 20-somethings are flocking to -- such as Linux or Windows, probably not Solaris. This is Sun’s high-profit gravy train, and it won’t last.
Challenge No. 3: Sun can’t seem to decide what to focus on for the future. It’s on the periphery of everything, yet not leveraging its real greatness. Schwartz talks about the potential of billions of cell phones running Java, but what’s Sun’s strategy to productize and monetize that base? True, Sun’s now selling low-end hardware on AMD and Intel and touting security and storage solutions, but how about putting together a more complete infrastructure stack like IBM, Oracle, or Microsoft?
Schwartz talks about catching the next wave -- being vendor of choice to the Web 2.0 superstars such as Google and Salesforce.com (to offset the cannibalization of Sun’s Fortune 500 Web 1.0 base). Maybe, but it’s hard to pick those winners, and they have different needs than mainstream IT. You gotta sell to Hartford. To Cleveland. To the median datacenter.
How can Sun get its mojo back? Schwartz’s open attitude is a great start. But I believe Sun has to make some bolder moves to tell the world it’s innovating and it’s a player again. Most of its peers have a presence -- and therefore broad awareness -- on the consumer side, where a lot of enterprise innovation gets its start these days. Microsoft. Google. Motorola. Apple. Even HP and Dell.
Sun should leverage its reputation for engineering elegance and develop some thin-client, Sun Ray-style consumer devices that could put it back on the technology mind share map again. DVR, router, VoIP phone, cell phone, Web appliance, whatever! Just make it great, cost-effective, elegant, and ubiquitous. Think iPod or ThinkPad or Xbox or Razr. Get cool and high-volume and high-margin again. I’d love to see it happen.