Employee (almost) chronicles Sun's top 10 failures

Dan Baigent is senior director of corporate development with Sun Microsystems. He's also one of the most candid inside observers on the failures that brought Sun to the point that it had to be bailed out by Oracle in a $7.4 billion acquisition, down from Sun's bubble-era peak of a $200 billion-plus valuation.

In a series of blog posts, Baigent starts to identify Sun's top 10 failures, and their consequences, as he seeks to describe how Sun got to this point.

Actually, he only managed to get his first three reasons posted before the posts were pulled down. However, Google cached them and you can find them below.

I can understand why Sun might not want to highlight its failures, and there may be Securities and Exchange-related reasons for shuttering the posts, but Baigent's commentary is insightful and helpful. I hope Sun will allow Baigent to post his remaining seven reasons.

• Reason No. 10: Failed to understand the x86 market. "We approached the market in the only way we knew how - as an extension of our high-end, low-volume, high-value approach to network computing. And not just in terms of product features and capabilities, but in terms of sales, partnerships, channel programs and supply chain management."
• Reason No. 9: Messing with the Java brand. "(N)umerous attempts by well-meaning marketing folks at Sun to try exploit the value of the Java brand itself and how that ultimately reduced the very value they tried to exploit. To some degree, this is as much about the lack of value in the Sun brand (at least outside our loyal customer base) as it is about Java".
• Reason No. 8: Fumbling Jini. "The real problem was that the engineers had built this technology using the latest Java platform...and had incorporated specific changes into J2SE 1.2 to support the Jini requirements. When launched, Jini could not run in anything smaller than a device with 64MB of memory and a Pentium-class processor.... Meanwhile, Marketing and PR were off describing uses of the technology that were all about small devices (cameras, printers, cell phones, etc.) that were completely unable to run RMI, nonetheless the Jini on which it was built.

I find that I tend to learn much more from my failures than from my successes. I'd be grateful for the chance to learn from Sun's, too. Sun, please let Baigent continue his countdown. It allows Sun to constructively chronicle its own failings, rather than allowing others to do so in less generous terms.

Follow me on Twitter @mjasay.

[ericyen]

Now this is a good article . . . and I agree you learn more from failure.

[zvonr]

Not reacting properly to X86 was the biggest mistake, they probably didn't want to cannibalize sparc sales, however it is always better to do it yourself than your competitors.

To Sun's excuse even Intel did not understood the x86 market initially (the 64 bit transition), and Itanium is a victim of the X86 steam roller... but they got their act together after getting a small beating from AMD...

The lesson is: SIZE MATTERS, if you are big enough you can make many mistakes,
With the market consolidating with IBM and HP and ORACLE buying up companies left and right, Sun's was left to compete with companies an order of magnitude larger.... Example: EDS was purchased by HP, EDS used to be a Sun ally (http://www.eds.com/insights/alliances/sun/), being owned by HP significant revenue is/will be redirected from Sun to HP....
Sun's only choice was to sell itself to a bigger player... and Oracle is a excellent choice. Oracle becomes a vertically integrated vendor right now owning more pieces of the solution stack than any competitor... Apple for Enterprise... guess who was Ellison's official wedding photographer...

[meh130]

There is a lot of truth to the "Failure to understand the x86 market", and it is actually larger than that. It was a failure to understand the evolution of the volume server market. Sun had a great volume server market during the dot-com boom, with the Sun E220R and especially the E420R. As a result of their success, Sun lost sight of where the market was going, and stumbled bad not realizing what was happening with Linux and x86 from 1999 on. It hoped to compete with the UltraSPARC IIIi, but that processor was notoriously late. The UltraSPARC III E280R could not compete from a price perspective, the US-IIIi was late, and Sun did not understand the x86 market. Even with its LX50 server, instead of simply OEMing the three popular Linux distros of the day (Red Hat in the US, SuSE in Europe, and TurboLinux in Asia), Sun instead decided to create its own distribution. The story behind that is stunning, but not worth repeating here.

Sun made many of the right moves, but always made those moves too late. Sun also had a destructive "not invented here" mentality which hurt it badly, first in storage in the late 1990s, then in x86 in the early 2000s.

Most importantly, Sun failed to execute in SPARC processor and server development starting in the late 1990s and continuing for years. This caused Sun to lose thought leadership on the high end to both IBM (POWER and AIX) and even to HP (Itanium and HP-UX).

[chris_d]

One of the biggest problems Sun had was not dealing directly with its customers. I hated going through a reseller. There is actually a local company we dealt with, which was great; but they had to go through, I think it was Techdata, so we had two companies to deal with before we got to Sun with things like booking a support contract. It took way too long. I want to get things done, and instead I'm waiting for everything to get processed by several different companies.

Once Sun got serious about x86, they did really well. The Galaxy and Thumper (x4x00 and x45x0 series) machines are really good. Throw Solaris on those and they are solid machines. But Sun did it too late and they couldn't seem to market them very well.

[Shankland]

I reported on Jini way back in 1999 and its failure afterward. It was a dud, yes, but I don't think I'd put it in the top 10. It was emblematic the easy by which Sun was distracted by shiny new objects and the fun of trying to sell a glamorous vision of the future, but I don't think Jini itself was a big factor.

[JuggerNaut]

Sun Microsystems suffers the same marketing failures that drove Commodore into obscurity and finally bankruptcy (okay, it was mismanaged to till its death). Sun could build a powerful brand behind Java, burt they take the wrong approach to it in my opinion. Java needs to be recognized by the average consumer or prosumer so the developer community can take advantage of that visibility/recognition. Solaris also needs to stop being the dark horse and be given the chance to go mainstream!

[ThisSunDontShine]

It is not at all surprising that Sun management censored Mr. Baigent's blog and deleted everything back to 2005 and disabled comments on the old posts. Mr. Baigent started with a flawed premise: in his top 10 reasons blog: he contended that Sun had failed, or as he put it, that "the Sun was setting". Let me represent Sun management's perspective.

Sun has been an incredible high tech success story. Under the visionary leadership of first Scott McNealy and more recently Jonathan Schwartz, Sun has achieved market leading status in O/S, middleware, servers, storage, processors, HPC, trailer truck computing (BlackBox), cloud computing, server virtualization, security, thin clients (SunRay), and office productivity suites (StarOffice). Any failure to recognize its superiority is due to analysts' inabilty to count free downloads, their lack of appreciation of Sun's vibrant partner ecosystem, and failure to recognize the awesome power inherent in The Participation Age. These three characteristics are far more valuable than top line revenue growth or bottom line profitability. Those things are so retro and un-WEB 2.0'y.

Sun has also delivered incredible financial returns to its legion of investors. Following a highly touted reverse 1 for 4 stock split in Fall 2007, Sun's newly minted JAVA shares soared - make that plunged - to depths not seen in over 15 years! Where else could shortsellers score such a return outside of the financial sector? Case in point: onsider the stellar results of Sun's #1 investor up until April 20th, 2009. Southeastern Asset Management invested heavily to reap the reward of Sun's unequaled open source business plan created by Sun's visionary management. After accumulating 22.3% of Sun stock by investing over $2.1 BILLION, they sold nearly 100% of their shares the day the Oracle announcement was made for a whopping $1.5 billion. A negative $600 million return in just about one year. It does not get much better than that!

These are just a few of the reasons that Sun was FAR, FAR, FAR from a failure. Sun is not setting. It's going Supernova!

[Sam Papelbon]

dear mr sun exec,

first off, you aren't fooling anyone. second, admitting mistakes is not a bad thing. third, bragging about your ability to make people rich makes you sound like exactly the kind of company that set our economy up for failure. (perhaps another thing you could admit you got wrong?)

[mobeid60543]

Ah.... your arrogance stinks to high heaven!

[JanInVan]

Guys, I don't think you're getting the irony and sarcasm of ThisSunDontShine's post. :-)

[inachu1]

I like java but I still do not like the problem where you want to install or update java and the installer does not get rid of the older versions. So now when I run java applet from any web browser I get several java icons in the system tray and the OS slows down to a crawl. Only way to fix this is by hand and remove older versions.

Pretty sad.

[atish505]

The key things they did not address or capitalize on:

1. Storage: They were ahead of EMC and Net App and everybody else. But they never marketed storage except as and extension to their servers/accessories.

2. App Servers and Dev framework: They were leaders when they acquired NetDynamics (ahead of BEA, IBM, Oracle). They picked Netscape --> iPlanet (with AOL) and they pretty much lost the App server market. By sticking to Net Beans they lost the development platform market to Eclipse.

3. Linux Appliances and Linux OS: They acquired Cobalt and could have run away with the Linux appliance market, and the low to mid-tier market. They dropped the CObalt brand, OS and merged it into Solaris family only to disappear from the scene.

4. Services: IBM has GS, HP has EDS, Sun and DELL are vendors without active consulting and implementation wings and they suffer in a service oriented economy.

5. Java Platform: They could have made it true open source and capitalize on it the same way as Red Hat with Linux: sell services, support, expertise and branded tools and platform.

6. Branding and Market recognition: Sun never really became a well known brand outside their closed tech domain.

[primemover1]

I appreciate the desire to get all introspective with specific products, but face it:

Linux "happened" and Sun leadership remained in denial ... "Java keeps us relevant."
RISC did not deliver as promised over x86 and Sun leadership remained in denial ... "Java will save us."

Classic not-invented-here attitude that lead Sun off the cliff, into self-induced darkness. Survival of the fittest prevailed.

[nishasharma252]

<a href="http://www.metro.co.uk/news">News</a> Good news............