At 25, Sun struggles to reinvent itself

Developers by the thousands flocked to the International Convention Center in Hyderabad, India last week as Sun Microsystems kicked off the second leg of its world-spanning series of Tech Days conferences. The theme of the event was "shape your future" -- and indeed, no slogan could be more appropriate for Sun, its developers, and its partners.

Sun marks its 25th anniversary this week. To the outside observer, however, there may appear to be little to celebrate. Sun's stock price languishes in the single digits, not even matching its performance of five years ago. Although the company's product portfolio is brimming with innovative technologies, it seems unable capitalize on them. Sun stands poised at one of the most critical moments of its history, yet its ability to shape its own future seems doubtful.

And yet, Sun has been here before.

[See also a Slideshow: "25 years of Sun" | PDF: "Timeline of Sun's achievements"]

Like many Silicon Valley successes, the Sun Microsystems story began with a crazy idea. In an era when "serious" computing was still largely dominated by mainframes, Sun's founders sought to bring cutting-edge technology down from the ivory towers of academia, government, and the mega-corporations and make it available in the form of affordable workstations for midsized businesses.

They weren't alone. The so-called Workstation Wars of the 1980s were bitter. But when the dust finally cleared, Sun emerged as the dominant player, thanks to its secret weapon. Unlike its competitors, which shipped complex proprietary operating systems and networking stacks for their hardware, Sun instead focused on existing, known standards, such as Unix, TCP/IP, and Ethernet, that could easily interoperate with the academic and government networks of the day.

Reduced R&D meant lower prices. While their competitors hoarded homegrown technologies like precious jewels, Sun was practically giving away entire computing solutions (at least, by the standards of the time). And from that crazy idea, Sun grew into a $500 million business in five years.

Today, 25 years after it was founded, Sun's commitment to open standards seems stronger than ever, and it has added a new weapon to its arsenal: open source. Sun CEO Jonathan Schwartz has promised to release the code of the company's entire software portfolio, from the Solaris OS to the Java development platform and beyond. Meanwhile, Sun reps sit on countless standards bodies and work tirelessly to promote open formats, such as OpenDocument.

The IT community ranges from interested to ecstatic. Sun's shareholders, on the other hand, remain less enthusiastic. Naturally their concern is profitability: How do you harvest revenue from your market if you're busy giving away the farm? But when investors point to Sun's former glory of the late 1990s, they ignore the fact that those high-flying days actually coincided with Sun's greatest misstep.