Where Next for Sun Microsystems?

By Craig Buckler
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Sun futureSun Microsystems share price has plummeted this week following the breakdown of IBM’s takeover talks. The board rejected an offer of $9.40 per share and terminated their agreement to negotiate exclusively with IBM.

Sun has been looking for a buyer for several months. The company has struggled for a few years and is in the process of cutting 6,000 jobs. Most analysts agree that it has never fully capitalized on its core technologies such as Java. During the mid-1990s, Java was touted as being the only development platform needed for desktop and web applications, but performance issues, licensing confusion, and the success of competing technologies contributed to its sedate uptake in the market.

IBM certainly appeared to be an ideal candidate and it would have been their biggest buyout to date. Their bid seemed attractive: Sun were trading at half the offer price before the talks began. It is still not clear why it was rejected, although more news is expected soon.

For the moment, Sun’s long-term future appears to be uncertain and that could be a concern to web developers. The company is a strong advocate of open source software and currently supports projects such as OpenOffice.org, the MySQL database, and VirtualBox. Although these applications can survive, will they continue to evolve without Sun’s investment?

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  • Debiprasad

    Although these applications can survive, will they continue to evolve without Sun’s investment?

    I would like to put my views on this. I think if SUN steps back to support these Open Source projects, any other may come to back these. Development of these projects will never stop. I hope IBM may step into it. Currently they are encouraging their employees to actively participate on Open Source commitment, most particularly Eclipse.

  • Dismayed Java Developer

    Sun’s toast.

    They claim that their software business has become “profitable”. In reality that’s a manipulated image. MySQL cost them $1 billion. To meet ROI that over even 5 year period they’d had to pull in $200M a year in profits for MySQL. And still foot the bill for development, sales, support, maintenance, interests. Meanwhile the same guys who sold MySQL to Sun has left the company, some in anger. They have now forked it and are further eroding Suns investment.

    But instead Sun is burning cash. Fast. They’ve lost their dot-com era appeal and Sun boxes for webservers are being rapidly displaced by Linux and even Windows. Customers for their core revenue-generating businesses – servers and storage – were overwhelmingly from US financial sector. Guess how eagerly they are buying now?

    Sun rushed JavaFX through as a competitor to Flash and Silverlight. Although at version 1.1 (for desktops only) it is still MIA and large pieces are still unaccounted for. The one advantage JavaFX seemed to have was its promised ability to run across a number of devices, ranging from phones to desktop. Only, iPhone happened in the meantime, and Apple is not letting in any technology which runs with a VM. Not that it matters much anyway, because Sun hasn’t finished the “small devices”. Right now JavaFX is a lame duck desktop technology which stutters and tears during playback of animations and audio. Standard widgets are sub-quality or simply not there.

    Meanwhile disheartened (former) Sun employees tell us about how the JavaFX project completely drained resources from their core Java development teams and made the entire platform suffer.

    With the current uncertain future, no responsible company will bet their future on JavaFX. With the current (non) penetration it is perhaps the Sun technology most likely to be axed after an acquisition.

    JCP progresses on a geological timescale. Much needed modernizations to the Java language and platform are MIA. Developers and Gurus alike sieve to competing technology stacks such as Ruby, Python, .NET. Neal Gafter (the most prominent “G” in the BGGA closure proposal) went to work for Microsoft, of all places.

    Suns engineers some up with some pretty astonishing innovations, especially for their servers. But to leverage the advantages you’ll have to follow a foreign programming model. Meanwhile customers are standardizing on x86 and Intels Nehalem is lurching like a black cloud over sun chip future.

    The former CEO, Scott McNealy, wanted to nail Microsoft so bad that he bought StarOffice only to license it away for free, eventually open sourcing it as Open Office. He did that not out of his good heart but because he believed that if he undermined Microsofts Office cash cow he could take on the big one and he could become the man. The project ballooned and now employs in excess of 40 engineers with no obvious way of generating revenue.

    The current CEO, Jonathan Swartz, believed bullheaded in the open source myth (the one that says that if you open source your products and sell “services and support” instead you will somehow magically make up for the lost sales). While it earned Sun much praise from the open source community the strategy has been a complete disaster. Suns “software business” is raking in a mere $300M a year. For that they have to foot the bill for the MySQL $1BN ROI as well as cost for support, maintenance, development, research, sales, marketing etc. for a long list of cost-heavy products: MySQL, OpenOffice/StarOffice, OpenSolaris, ZFS, Java, JDK, JEE, JavaFX, GlassFish, NetBeans.

    And perhaps worse: Because they’ve open sources their core software assets it is undermining their market value. A potential buyer will have similar problems monetizing the products.

    This is all the result of a blind belief in open source. Surviving as an open source vendor is tricky. Sun has failed.

    Open Office is going to stall. No one will be prepared to foot the bill. No other company has a vested interest in its survival. It was always just a way to try to get Microsoft.

    Java will survive. Many big players (IBM, Novell, Oracle, SAP) have vested interest in Java. But development and advance will stall for a period. And customers will defect to some extent. Microsoft will be one of the beneficiaries. JavaFX is not going to make it. Too little, too late and a very, very unfortunate timing.

    Solaris and Suns server technology? Doubtful if it can survive. x86 seems all the craze right now. And wall st. are not going to rescue Solaris.

  • Sarah of Tapiocacollective

    Either way I hope that Sun goes back and does support all the Open Source projects. Sun can also reach out to the community of developers out there and get help to keep open source exactly that.

  • @Dismayed Java Developer: Thanks for commenting — some great insights there!

  • Meh

    Is Sun falling apart quicker than anticipated?


    In stunning blow to Sun Microsystems, the company’s lead chip designer, has resigned. And Marc Tremblay is reportedly taking a job at Microsoft.

    And what’s Microsoft up to with a chip designer?