RoboGeek

Strange IT Managers article IT Investor's Journal: Why Sun stock doesn't improve in value http://www.itmanagersjournal.com/article.pl?sid=04/07/23/062204

This is a fairly decent overview of Sun's current position, and evaluating Sun as a stock purchase. The author feels that Sun comes up short on many measures, and says that's why Sun's stock price isn't improving.

e.g. A fair point is that the current and forseen revenue growth is sourced in either legal settlements, or in trimmed budgets. It would be better, from a financially sustainable standpoint, for revenue growth to come from actual top-line growth in sales and service revenue.

But then towards the middle of the article she starts into giving advice. Trying to tell Sun what to do to turn around. From the advice it's clear she doesn't understand Sun, doesn't see the things we're doing, etc.

One problem at Sun is a failure to have a step up or lead-in line that gives it a consumer presence.

erm, obviously Sun has no interest in being a "consumer presence". We have no interest in selling stuff at Walmart or Kmart or the like; we leave that to partners.

Not every company has to have a "consumer presence", right? There are tons of companies that exist to serve other companies - such as one of my recent investments (SON) that specializes in making the packaging that other companies use in packaging their products. SON has no business being a "consumer presence", that's for their customers to do. Same for Sun, in my opinion.

Though, it depends on how you define "customer". Products like Java Studio Creator ought to be made by Sun, and it's low price shows an intent to distribute it through a "mass market" distribution channel of sorts of the same kind as currently distributes other software like Photoshop or Visual Studio.

A big danger is that Sun keeps toying with a consumer play, and I don't think it has the right people who understand that space. For that they should heavily rely on consumer companies such as Sony, Coca-Cola, Nokia, Mercedes, GM, GE, and several others to promote their agenda. But I doubt that Sun will ever successfully enter the consumer space.

er, what? There's two areas she could be thinking about. "Handsets" in the form of what we're doing with J2ME, and the efforts with JDS and especially since that you can now buy JDS boxes at Walmart. It's strange that on the one hand she should advise us to enter the consumer space, and then say she doubts whether we can be successful at it. Which is it?

For J2ME, that's working through the handset makers. The exact people she suggests we should work with. They are, after all, the ones who understand "that space" as she puts it. Ditto with the car people, or was she asleep during the Jonathan's Java ONE keynote when that car was driven out?

The Solaris system needs to further migrate, and the company is in sore need of IC technology to give it a more equal footing with Intel.

The first half of that is "huh, what's she meaning". If, by "migrate", she suggests it should be on more processor platforms than it is now, then where does she expect the resources to come from? The second is strange because obviously there is a lot of overhead of owning chip production plants.

The company also has a cultural issue, to the extent that it's very U.S.-centric. I'm not convinced it really understands Asia, although it appears to "get" Europe. ... Sun appears to be missing out on transforming itself from being U.S.-centric into being an international company, particularly by not investing more in India and China.

erm, showing some blindness here, eh? Sun has a large and growing presence outside the U.S. Half of the people I work with are in either India or China. We had some high-lord-muckety-muck executive just move to China to establish a business unit in Beijing.