Open source puts a shine on Sun's quarter
Sun Microsystems is getting some love from Wall Street after its sales and earnings topped estimates, as detailed by Bloomberg. Software sales jumped 21 percent year-over-year.
What is fueling the growth? The same thing that Sun CEO Jonathan Schwartz has doggedly said would lift Sun's fortunes again: open source.
Open source has powered Sun's resurgence in several ways. First, open source makes Sun interesting and relevant again to IT buyers. Sun is shedding its image as the high-cost, high-performance leader to the low-cost, high-performance leader.
Second, Sun's open-source products are starting to contribute real dollars to sales growth. I had heard that MySQL did $81 million in the quarter. While it turns out that number is inflated [I have since confirmed that this is the right number], it is the case that Sun's MySQL division had its best quarter ever, jumping 55 percent quarter-over-quarter and, according to one inside source, closing several large deals that topped anything MySQL had been able to close before. Sun's brand makes an investment in MySQL less risky.
But it's not just MySQL. Indeed, Sun's Open Storage product line is now on a $100 million annual run rate, growing 21 percent in the quarter.
Third, open source gives Sun an efficient distribution mechanism that increases the power of its sales force dramatically. Instead of having to hunt for deals in a cash-starved economy, Sun is able to sell into a growing body of incoming leads. That's the power of open source, and Sun is using it effectively.
Sun still has a long ways to go, but its intelligent use of open source should get it there.
Follow me on Twitter at mjasay.
Matt Asay brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. Matt is vice president of business development at Alfresco, a company that develops open-source software for content management. He is a member of the CNET Blog Network and is not an employee of CNET. Disclosure. You can follow Matt on Twitter @mjasay. 
If it's OSS, what exactly are they selling? I guess you could lump in commercial MySQL offerings, but considering they spent $1b on the damn thing, does 21% even matter. All the while, it's a net loss every quarter, under Schwartz.
Sun's in trouble.
If you don't know what they're selling (and companies are paying them large sums) then you need to do some research into what the product is. If you don't know what the product is, how can you possibly say whether it's good /or/ bad for their future? Clearly you don't understand the subject.
Just as you don't understand the concept of short-term high-investment for long-term low-investment.
Um, open source software.
You can sell it you know.
- by royrusso January 29, 2009 12:17 PM PST
- "Um, open source software.
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- by odubtaig January 29, 2009 4:05 PM PST
- No, it really doesn't.
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(5 Comments)You can sell it you know."
Explains their current net loss pattern.