Cringely: Sun to Shrink Dramatically
In "The
China Syndrome" a couple of weeks ago, Robert X. Cringely writes
about the recent IBM deal with China's Lenovo. The article is ok, I
guess, but when we get to the very last sentence we find this:
That's the extent of his analysis on Sun? "Especially Sun. Those guys are in trouble?" Well, I'm impressed.
Then, the following week, he wrote another column -- "Between an xBox and a Hard Place" -- with more deep thoughts on Sun and the dire consequences we face due to IBM's China deal. There are more sentences mentioning Sun in this article, but still very little thoughtful analysis. And, to make matters even more interesting, he comes to a far more dramatic conclusion. In the first article, we are simply "in trouble." In the second article, however, we are "going to shrink dramatically anyway, possibly to nothing." So, basically, we are going to die -- if we don't listen to Cringely, anyway.
So, here's how Cringely supports his extreme position:
Wow. I better start looking for a job. We're dead. After all, Cringely says so -- if we don't follow his advice, anyway. And I doubt we'll follow advice based on such a ridiculous and flippant review as this. Although I did enjoy the bit about "teenagers looking for a place to make out," though. That was a nice one. I don't read Cringely very often, to be honest, only when people (Jonathan Schwartz, Brij Singh) point out something of interest.
Losers
in the deal are HP, Intel, and Sun. Especially Sun. Those guys are in
trouble.
That's the extent of his analysis on Sun? "Especially Sun. Those guys are in trouble?" Well, I'm impressed.
Then, the following week, he wrote another column -- "Between an xBox and a Hard Place" -- with more deep thoughts on Sun and the dire consequences we face due to IBM's China deal. There are more sentences mentioning Sun in this article, but still very little thoughtful analysis. And, to make matters even more interesting, he comes to a far more dramatic conclusion. In the first article, we are simply "in trouble." In the second article, however, we are "going to shrink dramatically anyway, possibly to nothing." So, basically, we are going to die -- if we don't listen to Cringely, anyway.
So, here's how Cringely supports his extreme position:
Sun
will be immediately hurt more than any other company because Sun gets
more of its revenue -- close to 90 percent -- from the server market
IBM is about to target. Sun is in an extremely difficult position. Its
strengths have traditionally been in enterprise software and high-end
hardware, both of which mean that it can't flirt too much with Linux
and AMD or risk its traditional customer base. At the same time, IBM is
targeting the same customers as Sun, will be offering more powerful,
cheaper hardware and a great depth of software options, including a
Linux that doesn't in any way threaten other parts of IBM. Sun can't
compete on chips, can't compete on price, can't compete on depth. What
are they to do? Their current strategy of selling processing power by
the cycle is like a new car dealer renting back seats of cars on the
lot to teenagers looking for a place to make out.
What Sun needs to do is to establish itself as the de facto UNIX (not Linux) software vendor. Drop the hardware, make Solaris run beautifully on every high-end system from every manufacturer and compete with Linux by offering world-class consulting, service and support. Fortune 500 companies would sigh with relief, but Sun would also have to accept that the company will shrink in sales and headcount, though not in profit. This is the only viable strategy left for Sun, which is going to shrink dramatically anyway, possibly to nothing.
What Sun needs to do is to establish itself as the de facto UNIX (not Linux) software vendor. Drop the hardware, make Solaris run beautifully on every high-end system from every manufacturer and compete with Linux by offering world-class consulting, service and support. Fortune 500 companies would sigh with relief, but Sun would also have to accept that the company will shrink in sales and headcount, though not in profit. This is the only viable strategy left for Sun, which is going to shrink dramatically anyway, possibly to nothing.
Wow. I better start looking for a job. We're dead. After all, Cringely says so -- if we don't follow his advice, anyway. And I doubt we'll follow advice based on such a ridiculous and flippant review as this. Although I did enjoy the bit about "teenagers looking for a place to make out," though. That was a nice one. I don't read Cringely very often, to be honest, only when people (Jonathan Schwartz, Brij Singh) point out something of interest.
Jim, I think you are underestimating this. After all, with this sale, IBM will have *some* budget to develop a CPU that may, someday, compete with Niagara. This CPU will be a comitee made CPU and it will be optimized for the largest market it targets (PlayStation). Of course Sun is in a lot of trouble, only a fool can't see that!!! After all, if PS3 dominates the Market, god knows what will happen to UltraSPARC.
>Ironic Mode OFF>
PS. Merry Christmas and an Happy new year
Posted by Jaime Cardoso on December 28, 2004 at 08:03 AM JST #
I think Sun will benefit from the sale -- Why? Simple -- the message, MS no longer matters, Intel no longer matters, the *nix revolution makes architectural neutral boxes BIG again. Why else would IBM dump them off(yeah I know they don't make money). Computer appliances are the wave of the future. It's a simple fact that Joe-computer-user can't maintain their own box when under the attack of viruses and other junk.
So the network service providers will give the Internet appliance away in exchange for using their service. I just got DirecTV to upgrade both of my DirecTV TIVOS for $12 in tax and a promise of one more year of subscription. Internet use isn't far behind. $500 of hardware for free.
For all practical purposes the PC Mass market is dead. IBM knows it. The browser won. The network truly is the computer -- from now on.
Posted by ds on December 28, 2004 at 10:10 AM JST #
Thanks for the well wishes, too! I hope you had a nice Christmas over there, too! Only a few days left in '04 :)
Jim
Posted by Jim G. on December 28, 2004 at 02:50 PM JST #
I'm not that familiar with Cringely (other than skimming his book one time a few years ago). I think we'll be just fine despite the IBM deal and despite Cringely's strange views. :) I'm very much a supporter of appliances as the future, too. I hate fat clients. Always have.
Jim
Posted by Jim on December 28, 2004 at 02:59 PM JST #