McNealy's cold feet and other tales of Sun

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Joy, who had earned a reputation as the power behind Berkeley Software Distribution, which modernized AT&T's Unix, was a major draw for early customers. McNealy handled purchasing calls in the company's early years using a phone with four or five lines. One early conversation went like this:

Customer: "Is Bill (Joy) onboard?"
McNealy: "Yeah."
Customer: "I want two of whatever you got. What are you selling?"

Among McNealy's other tasks was writing the company's first accounting software using the Unix vi editor--though he initially used Onyx systems and not Sun's own. He also oversaw "burn-in" tests to weed out flawed computers, turning off the office air conditioning to find any machines that couldn't endure the overheating.

Gage was the company's original salesman, McNealy said, and kept track of prospects on pink slips of paper. When calling back customers, "He'd organize pink slips by time zone. He'd start at the left side of his table and move right."

Joy marveled at Gage's system. "Every once in awhile, John used to take all the slips and throw them in the trash. He said, 'If it's important, they'll call back.'"

The early years left an impression on McNealy, who still can recall how many millions of dollars in revenue the company garnered in each early year. "It was 8.5, 39, 110, 210, 450, then a billion. Then I forget after that," he said.

Sun has annual revenue of roughly $11 billion now but has struggled financially in recent years. McNealy is confident that Sun will survive, though, because innovation matters and it's not easy for competitors to get started.

"Barriers to entry in our business are big, because it takes a lot of capital to do what we do...(Hewlett-Packard) kind of checked out, in that they don't do microprocessors, operating systems, the software stack. At some point, you no longer are a car company, you are a car dealer," he said. "The major research and development is being done by (Advanced Micro Devices) and Intel, Microsoft, Sun and IBM," he said.

And McNealy is convinced Sun has staying power. "There haven't been any other companies that started after Sun," he said. "We are the last server company that's survived."

[inkadinka12]

Sun earns roughly $13 billion ...

Not even close. Do you guys even bother to fact check your articles? Sun doesn't earn any money, they lose money. If you were confusing revenue with earnings, you are still off. In the latest quarter, Sun's revenue totaled $2.6B.

[Jon Skillings]

Fixed the revenue citation

You're right - we wrote "earns" by mistake when we what we were referring to was revenue. But it was an annual figure we were citing, not quarterly. The story has been fixed.

[open-mind]

Music on the server?

Hello Sun?

The music IS on the server. The server is your PC running iTunes. The iPod client connects to that server when it needs a music update.

Explains why Sun is spiraling in.

Barriers to Entry? I don't think so.

>"Barriers to entry in our business are big,
>because it takes a lot of capital to do what we
>do...(Hewlett-Packard) kind of checked out, in
>that they don't do microprocessors, operating
>systems, the software stack. At some point, you
>no longer are a car company, you are a car
>dealer," he said. "The major research and
>development is being done by (Advanced Micro
>Devices) and Intel, Microsoft, Sun and IBM," he
>said.

Microsoft and Sun aren't doing any research and
development, unless reverse-engineering a copy of
the latest hot startup's product counts as "R&D".

The biggest server manufacturer today is Google,
and that's where the threat to Sun in coming
from. Almost anybody can put together an x86
cluster to perform semi-specialized functions,
such as search farm, web server, verilog farm,
compute cluster, etc. As long as x86 machines
provide a 2-3 price/performance advantage over
SPARC, Sun is doomed. If Sun goes to the x86
hardware, then they're just another Linux box maker.

For the time being, Sun's business advantages are
its sales force, its installed base, its brand,
and its customer's sunk costs (custom software).
From a technological point of view, there are no
meaningful barriers to entry.

The reason why we don't see a large number of
startups making Linux-cluster servers to take
away Sun's core business is. . . . . . . . . . .



there's no money in it.