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Red Hat Set To Surpass Sun In Market Capitalization 221

Posted by CmdrTaco
from the now-that's-a-milestone dept.
mytrip writes "In what may come to be seen as a deeply symbolic moment in the history of operating systems, Red Hat is on the verge of surpassing Sun Microsystems' market capitalization for the first time. Sun, perhaps unfairly, represents a fading Unix market. Red Hat, for its part, represents the rising Linux market. Given enough time for its open-source strategy to play out, Sun's market capitalization will likely recover and outpace Red Hat's."
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Red Hat Set To Surpass Sun In Market Capitalization

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  • by Facetious (710885) on Thursday January 22, 2009 @01:12PM (#26561631) Journal
    The makes me curious. If all Linux vendors had an equivalent of publicly traded market capitalization, what would their sum total be? Naturally it would be lower than Microsoft's $153B (as of this morning), but that isn't bad considering Linux can be had for free. (BTW, I remember back when msft's market cap was over $400B).
  • Thank you Sun (Score:5, Insightful)

    by rlp (11898) on Thursday January 22, 2009 @01:13PM (#26561651)

    I for one hope that Sun not only survives, but prospers. Sun has greatly contributed over the years to the development community, particularly FOSS developers.

  • by fishwallop (792972) on Thursday January 22, 2009 @01:14PM (#26561669)
    I fail to see why this is a "deeply symbolic moment in the history of operating systems" and not merely a moderately interesting moment in the corporate history of the respective companies (or, more specifically, in Red Hat's corporate history). Red Hat may represent Linux, but it's not Linux, and market capitalization, being a function of share price, is a less interesting metric then any measurement of the actual use of the operating systems these companies produce. Anyone who remembers the Red Hat IPO will know that share price is more closely tied to hype than to particularly signficant tecnical advances.
  • Re:Thank you Sun (Score:5, Insightful)

    by aliquis (678370) <dospam@gmail.com> on Thursday January 22, 2009 @01:16PM (#26561705) Homepage

    Personally if I got to choose one of either all of Suns knowledge, experience, code and products or Redhats I'd for sure go with Sun.

    Obviously the market works differently =P

  • Re:Thank you Sun (Score:3, Insightful)

    by aliquis (678370) <dospam@gmail.com> on Thursday January 22, 2009 @01:17PM (#26561725) Homepage

    (differently = who is more likely to make money of their knowledge, experience, code and products :D)

  • by AKAImBatman (238306) * <akaimbatman@gmai[ ]om ['l.c' in gap]> on Thursday January 22, 2009 @01:17PM (#26561727) Homepage Journal

    ...that marketing trumps technology. Sun has some incredible tech and even delivers x86 servers at highly competitive prices. Yet because Sun's marketing sucks worse than a black hole, generating new customers is a huge issue for them. As far as I can tell, the vast majority of their business is still through customer reps with little attention paid to the market as a whole.

    I personally think that Sun could be successful in quite a few areas of the market. Not the least of which is as a serious competitor to Dell's server business. But first, Sun has to figure out how to communicate with the average customer. Giving their software complex prefixes like "Sun Java System", branding everything with "SPARC" even when it isn't SPARC, changing their market ticker to JAVA, and giving up on new markets before they've made inroads aren't exactly painting Sun in a positive light.

    Dear Mr. Schwartz: Please hire a real marketing department and see to it that your product line makes sense to the average consumer. KTHXBYE.

  • Re:Thank you Sun (Score:3, Insightful)

    by tnk1 (899206) on Thursday January 22, 2009 @01:21PM (#26561795)

    (differently = who the stock market thinks is more likely to make money of their knowledge, experience, code and products :D)

    Corrected that for you.

  • Re:Wrong. (Score:5, Insightful)

    by QuantumRiff (120817) on Thursday January 22, 2009 @01:23PM (#26561817)

    I understand that. I was asking if looking at the market capitalization really said more about how the company was doing than its sales numbers? Do we now judge the success of tech companies by looking at what non-technical financial people think the company might be worth in the very short term?

    Really, I think it says more of the "investors" that they think a company with sales of 700M a year should be worth (in market capitalization terms) the same or more than a company with sales of 13Billion a year.

  • Re:Riiiight . . . (Score:5, Insightful)

    by tnk1 (899206) on Thursday January 22, 2009 @01:26PM (#26561869)

    Thoroughly unlikely. Sun would be bought out long before they needed to declare bankruptcy. Their star may not be in ascension, but the company has real value.

  • by Anonymous Coward on Thursday January 22, 2009 @01:28PM (#26561909)

    It's not that Sun would have done the wrong things. Their problem for the last 15 years has been that they have been over-careful of commitment into their own business. From business perspective they have been apathic at best, and I iterate the same I said in 90s already: I would not invest a penny into them.

    They have not taken any steps to fix their real problems so far, so likely they will just keep sinking slowly until the company will be bought by someone who knows how to actually run companies. Perhaps even by Microsoft, who knows :)

  • Re:Thank you Sun (Score:5, Insightful)

    by InlawBiker (1124825) on Thursday January 22, 2009 @01:29PM (#26561925)

    Sun has been a great innovator, but when they were the only game in town they charged obscene prices for their products and services. It helped open the door for Linux and Sun has only itself to blame.

    When you walked into a data center ten years ago all you saw were Sun servers. Where I work now I'm hard pressed to find a single Sun box anywhere.

  • Good enough? (Score:1, Insightful)

    by Samschnooks (1415697) on Thursday January 22, 2009 @02:00PM (#26562421)

    Standard PC hardware has been getting to the Good enough category, and replaceing the need for the high end stuff.

    It is as good as SUN and cheaper. Otherwise, folks would still be buying SUN's products. Say what you will about MS, but they have a good product and the most applications that run on it. Consumers are not stupid as many folks here believe; especially, business consumers.

    No, I don't work for Microsoft. I'm just expressing my opinion.

  • by asv108 (141455) <(gro.oiduatahp) (ta) (xela)> on Thursday January 22, 2009 @02:11PM (#26562595) Homepage Journal
    Its not just marketing, it being able to purchase products online at the actual price. You can't just login to sun.com and buy servers via a online portal with a corporate discount like Dell or HP. You have to talk with a rep to get the actual real price, not the phony MSRP price.
  • by Anonymous Coward on Thursday January 22, 2009 @02:12PM (#26562617)

    Discolsure - I work for a Sun Reseller.

    "Now their new stuff is either to much for what people need to too expensive for what you get."

      I have to disagree with this statement. Sure, Sun is not in the business of selling personal computers. And an individual is not going to be buying Sun equipment. But businesses sure are. Sun Servers these days can be SPARC, AMD, or Intel. They can run whatever OS you want.

    We have had great success in replacing Dell in data centers with Sun. All you need to to is show the customer processing power, rack unit, cooling requirements, and energy usage vs. Dell.

    Yeah, 1 Sun server costs more than 1 Dell server. But you need 10 Dell servers to do the job of one Sun server. The Dells will use 50x power and cooling, require 10x rack space, etc for an equivalent amount of work.

    Virtualization is the key in todays datacenter, and Sun has the servers to host it.

    All that said, the Sun PR machine is utter crap. They do a terrible job of getting the word out on this stuff.

  • by thtrgremlin (1158085) on Thursday January 22, 2009 @02:20PM (#26562789) Homepage Journal
    No product can make money if you can't sell it. Doesn't matter how good it is. Call it marketing hype, but how is anyone going to know that your systems are superior if you don't say as much. That seems like such a screw up that the sales rep couldn't explain the whole "end-to-end" solution issue. Personally, I don't think that wasn't a gotcha question at all, that should have been prompted as a great opportunity for the rep to explain what kind of business Sun is really in.

    But if Sun doesn't even know what kind of business they are in... one really needs to wonder how much longer they are going to last. I am sure any sales rep at Red Hat would drool at the opportunity to answer a question like that from a real customer in front of a crowd that would have influence over possible huge sales. Hell, even I live to hopefully answer questions like that! Shortly after Vista came out, I was at a Fry's Electronics, and a sales associate was telling this guy looking to buy a bunch of machines that Vista was the hot new thing and that he needed it for his business because everyone was going to be using it in the next 6 months when XP died. I bust up laughing and warned the customer that was likely the worst advice you could get to drive a business, let alone a speculation I agreed with. From what he talked about needing for his business, I did my little Linux/FlOSS speech, but really recommended Red Hat, and explained a bit about their free product with full end-to-end support, and that they could likely best advice him on what would work best for HIS business needs. I am fairly sure I sold the guy on it. The Fry's sales rep was upset and just kept saying I was wrong and that everyone was going to use Vista. I humored him and asked "So what's Vista got that XP doesn't?". He started explaining the higher system requirements (as if it was a selling point), and went on to show me Aero. I gave a long *sigh*, and walked away. I should hang out there more often :)
  • by C_Kode (102755) on Thursday January 22, 2009 @02:32PM (#26562993) Journal

    With the current way Sun does business hardware wise it cannot compete with Dell directly. Sun sells higher end hardware and Dell sells lower end servers very cheap. You can buy two Dell servers loaded with the same memory and SCSI drives instead of SATA drives, with 3 years support for what a single Sun server would cost you. I have several JBoss clusters and I just throw Dell PE1950s at them. If one crators, the rest of the cluster just hums along. Sun competes with HP, IBM, and the like. They DO NOT compete with Dell. Although, Dell can definitely compete (and steal market share) from Sun. Especially now with the current state of economy and everyone being so cost conscious.

  • Bad marketing (Score:5, Insightful)

    by Jim Hall (2985) on Thursday January 22, 2009 @02:38PM (#26563127) Homepage

    I for one hope that Sun not only survives, but prospers. Sun has greatly contributed over the years to the development community, particularly FOSS developers.

    Sun has certainly contributed many highly-visible projects that we just take for granted these days: NFS, OpenOffice, Java, GNOME, etc. And ZFS is very powerful, but hasn't really made it to other places yet. However, it just seems Sun doesn't know what to do with it, or how to market it.

    A few years back, I got to visit Sun for an executive briefing. We met with a lot of higher-ups at Sun (including Scott McNealy.) I repeated to whoever would listen that Sun needed to get their act together: Figure out an (easily-understood) strategy for Sun and FOSS, and move with it. Separate the hardware and software marketing; and at the same time, let me choose systems "menu-style" just like buying a Dell. Simplify your product lines and marketing. Release a consumer-based UNIX distro for commodity PC systems that has the polish of Linux (the apps are there - Firefox, OpenOffice, etc. - so for 99% of the population that's the "compatibility" they need.)

    Yes, Sun has done some of these things, but not in a coherent way, and certainly not in a simple way. Things are just too hard to go through Sun.

    Sun needs to get organized if they want to remain competitive.

  • by AKAImBatman (238306) * <akaimbatman@gmai[ ]om ['l.c' in gap]> on Thursday January 22, 2009 @02:39PM (#26563149) Homepage Journal

    For quite some time, Sun was undercutting Dell on AMD64 servers. I have been told that you can still get the servers cheaper if you have a rep. The problem is that Sun gave up on the rest of the market after only a short push. (You might remember the "rhymes with hell" ads here on Slashdot.) And dealing with a central sales rep is a pain and a half when any segment of a large company can order a server through Dell.com.

    So I'm not surprised that you think Sun doesn't compete with Dell. As I said, they have a massive failure in their marketing department and no real commitment to expanding their business.

  • Re:Good enough? (Score:3, Insightful)

    by rbanffy (584143) on Thursday January 22, 2009 @02:40PM (#26563159) Homepage Journal

    It really depends on your workloads. I see SPARC boxes running rings around x86 boxes the same price range on highly parallel workloads.

  • by jotaeleemeese (303437) on Thursday January 22, 2009 @03:36PM (#26564197) Homepage Journal

    Can any MS based servers be configured to divide resources on "virtual" machines before the operating system is booted?

    And then each one of those virtual machines can run a couple of dozen instances of a operating system?

    And then can you assign on the fly CPUs, memory or I/O cards to any of your initial virtual machines?

    Can actually any Linux machines do this?

    You guys talk about desktops like if getting the latest version of Gnome working was the coolest thing regarding technology. That is not Sun's beef, Sun's realm is completely different, but clearly its main clients (specially banks) are being hit specially badly, but the stuff Sun does is tremendously cool, if you are technically skilled to understand what it is.

  • Re:Thank you Sun (Score:4, Insightful)

    by ChienAndalu (1293930) on Thursday January 22, 2009 @04:02PM (#26564719)

    If you think the stock market is wrong, you can earn money.

  • Relative to what? (Score:5, Insightful)

    by DesScorp (410532) <DesScorp@NOsPam.Gmail.com> on Thursday January 22, 2009 @04:24PM (#26565083) Homepage Journal

    Sun has been a great innovator, but when they were the only game in town they charged obscene prices for their products and services. It helped open the door for Linux and Sun has only itself to blame.

    When you walked into a data center ten years ago all you saw were Sun servers. Where I work now I'm hard pressed to find a single Sun box anywhere.

    Sun was expensive compared to what? Windows boxes? Linux boxes that came later? Sun became the huge company it was because they were far more affordable than what IBM and Digital was charging in the 80s, and everyone ran to them. It's kind of hard to blame Sun because some guy in Finland came up with an alternative that ran on El Cheapo X86 hardware, and then gave it away to the whole world.

  • by DesScorp (410532) <DesScorp@NOsPam.Gmail.com> on Thursday January 22, 2009 @04:30PM (#26565157) Homepage Journal

    "Dear Mr. Schwartz: Please hire a real marketing department and see to it that your product line makes sense to the average consumer. KTHXBYE."

    Schwartz is part of the problem at Sun. When McNealy named Schwartz as his successor, a collective "huh?" was heard all over the tech world.

    Schwartz's gamble seems to be "give every piece of software away, and sell commodity hardware".

    This is, in a word, foolish. IBM doesn't give everything away. Nor does HP, or Apple. They carefully balance their open source obligations against the need for exclusivity in some areas. Sun should be trying to emulate Apple in many ways (and IBM in some others), but instead, is trying to remake itself into a Red Hat that sells cheap X86 hardware, and this is a recipe for doom.

  • Well, ya (Score:2, Insightful)

    by zogger (617870) on Thursday January 22, 2009 @04:36PM (#26565253) Homepage Journal

    Umm,. I know Dell and Redhat aren't in the same business. The article was more about Sun and Redhat. Sun sells software, services and hardware. Redhat only sells two of those things so far. That's why I thought it might be interesting if they took a crack at opening up the last leg of that tripod. I *do* know I would be more inclined to get hardware from Redhat knowing it just worked with Linux than getting a similar situation from Dell or Sun. Any place that advertises that they recommend Vista on the top of the "linux pre installed" hardware pages (that would be Dell) in their online catalog isn't really all that serious about it. They offer a few models, but that's about it, sort of a generic minimal effort sop to that market. Whereas if Redhat did it, they would most likely take it *very* seriously. Would it be worth say a 50 buck premium over a similar specced Dell offering (and just about anyone could beat sun on hardware prices)? I think so, especially if they shipped with the real long term supported redhat and not perpetual betaware Fedora. I use Fedora now but it is always a crapshoot every release, it is a fine line between brilliant and a steaming pile, because that is what it is, experimental, it's never stable. If I could get a decent specced machine from Redhat with a solid multi year supported distro on it and it all "just worked" out of the box..that would be quite tempting.

  • by Anonymous Coward on Thursday January 22, 2009 @05:20PM (#26565931)

    When Linux became viable, Sun was among the first to become aware that big apps like Oracle were being ported. It was a golden opportunity to come out with a Sun Linux and support it along with Solaris. It would have let them tap into smaller markets and crush Red Hat.

    Instead they tried like hell to prop up their massively profitable Sparc platform. For smaller projects everybody went straight to Linux, or even Windows. Now... who in their right mind would buy Sparc hardware over HP or Dell servers running Red Hat?

    There are of course cases where Sun is the clear favorite and worth the expense, but before too long Linux will catch up.

  • Great Joke (Score:4, Insightful)

    by afabbro (33948) on Thursday January 22, 2009 @05:45PM (#26566309) Homepage

    Given enough time for its open-source strategy to play out, Sun's market capitalization will likely recover and outpace Red Hat's.

    Bwwwwwwahahahahahahaha. "Likely" if you are a Jonathan Schwartz sock puppet account. Unlikely if you've followed Sun's dismal performance [yahoo.com] for any length of time.

  • Re:Bad marketing (Score:2, Insightful)

    by ToasterMonkey (467067) on Thursday January 22, 2009 @06:11PM (#26566653) Homepage

    I think you're seriously undervaluing Solaris. Killing it wouldn't be doing anyone any favors.

  • Re:Riiiight . . . (Score:3, Insightful)

    by BitZtream (692029) on Thursday January 22, 2009 @06:29PM (#26566987)

    Then you're blind on many levels, companies like Sun have enough technology that you've never even heard of (because they aren't selling it for various reasons) that they would get picked apart by various organizations taking the pieces they want. Then there is all the known technology they have produced and value in their products. If you think their products don't have any value, you A) Haven't been in the business of dealing with servers very long and also B) are blind, but I already said that.

    Layoffs now days are hardly an indicator of economic conditions. You hire 10k employees, keep them around long enough to figure out which ones are worth keeping, and layoff the worst 9,550 that you have, rinse, repeat next year, you keep getting fresh good employees at the cost of paying a bunch of useless ones. But heres the kicker, you were going to pay them anyway, there were only so many good ones to start with, the mass of your employees are generally inept overall and can only do very specific tasks.

    Several companies have announced layoffs in the last few days, its great to blame it on the economy rather than saying 'we had this planned all along', don't you think?

    No financing? Are you serious? Stop watching the scary news and believing all the hype you hear. People are still getting financing JUST FINE, I recently refinanced my house to get a better rate, and my old rate wasn't bad! The company I work for just recently was going to aquire another business that was going under just for the hardware, and out of no where a venture capital firm jumped in and dumped them a good years worth of capital.

    The economy isn't nearly as bad as you think it is, its just a great excuse to tell people rather than the truth. Those layoffs were likely to have happened regardless of the economic conditions, but its WAY easier to say 'we can't afford you' than to say 'your a twit and waste of resources on our planet' don't you think? Sure good people get caught in the collateral damage, but thats just life.

  • Re:Bad marketing (Score:4, Insightful)

    by An dochasac (591582) on Thursday January 22, 2009 @07:52PM (#26568153)

    And ZFS is very powerful, but hasn't really made it to other places yet. However, it just seems Sun doesn't know what to do with it, or how to market it.

    Read only ZFS has been in OSX since 10.5, full blown ZFS is in OSX Snow Leopard as well as various flavors of FreeBSD. It will go into Linux if/when the kernel licensing issues can be overcome, it's already available via FUSE. ZFS is also used in several storage appliances by Sun and others.

    A few years back, I got to visit Sun for an executive briefing. We met with a lot of higher-ups at Sun (including Scott McNealy.) I repeated to whoever would listen that Sun needed to get their act together: Figure out an (easily-understood) strategy for Sun and FOSS, and move with it.

    What is so difficult to understand? Sun divisions have contributed more than 1/2 of the OpenSource code out there (OpenOffice, Java, VirtualBox, MySQL, OpenSolaris...) Sun is a systems company. That code is out there so the world doesn't end up locked into systems built around Microsoft and Wintel fat clients. Where I think Sun could improve is in selling support and integration services for RedHat, OSX other *nixes. Sun definitely has the expertise and some Sun employees have expertise in enough *nix variants that they won't paint you into a corner. In fact, anyone who has ever been involved with porting from Linux to Solaris will tell you that step #1 is improve the quality of the code, Solaris/Forte doesn't let coders get away with the kind of sloppiness that gcc/Linux does.

    Separate the hardware and software marketing; and at the same time, let me choose systems "menu-style" just like buying a Dell. Simplify your product lines and marketing. Release a consumer-based UNIX distro for commodity PC systems that has the polish of Linux (the apps are there - Firefox, OpenOffice, etc. - so for 99% of the population that's the "compatibility" they need.)

    Have you been watching Nexenta or OpenSolaris 2008.11? This X86/desktop "usability" gap has closed significantly and if you're using Linux for a server, you really need to look at OpenSolaris, ZFS admin is far easier than anything you'll find on RHEL, svcadm takes the randomness out of system services and dtrace is awesome for diagnosing issues in production systems.

    Sun needs to get organized if they want to remain competitive.

    I agree wholeheartedly!

  • yep (Score:2, Insightful)

    by zogger (617870) on Thursday January 22, 2009 @07:58PM (#26568233) Homepage Journal

    Yes, I think they could do the assembly and shipping in house, at least for desktops and servers, notebooks and netbooks would come just premade, nothing much there to it, they will of necessity all be coming intact from Asia someplace. They just need guys onsite to insure quality and to have that quality warranted with whatever manufacturer they pick.

        The economy in the US is awash in reasonably technical people who need a job now. They need a few people to really make intelligent decisions on the hardware, and to coordinate that with the software devs they already have to get to the "just freeking works, guaranteed" stage. Building computers is just a factory job after all, it's not that hard,and if you studiously avoid the typical east coast and west coast uber and oh so trendy high rent districts and have your assembly plant in the rust belt some place, you get cheap rent and reasonable labor and you can be picky on the labor quality as well. You aren't making any of the components, just assembling them. As to shipping, Fed Ex and UPS go everywhere, that is a non issue really.

    As to sending people- joe six pack or joe business- out to do their own research on hardware, still too many horror stories about what allegedly works and doesn't with linux, its a moving target all the time. Check *any* distro's forums there. You basically *have* to follow the Apple-type model to insure the best quality control and to guarantee it "just works" with the software you install.

    The whole idea of a big linux company like Redhat selling computers is they *would* be a better over all experience than getting some random production run from acme computer and trying to shoehorn something in. And again, Apple has proven that people will pay a reasonable premium over the lowest common denominator for that experience.

  • by metamatic (202216) on Thursday January 22, 2009 @07:59PM (#26568237) Homepage Journal

    OpenSolaris is already Free Software. I see no reason to believe that such a license change would attract more developers.

    The CDDL is incompatible with the GPL, which means that lots of free software code can't be used to improve OpenSolaris.

  • by hairyfeet (841228) <bassbeast1968@@@gmail...com> on Thursday January 22, 2009 @11:39PM (#26570053) Journal

    I think it is more that they forgot where their bread was buttered. I mean, there is a REASON why you see websites all over the place showing you how to turn Win2K3 and 2K8 server into a desktop OS. That is because the business user, MSFT's bread and butter, has been ignored while they got into this multimedia pissing contest with Apple.

    It is like all the business guys at MSFT was replaced by a marketing drone screeching "We can be as hip as Apple and as cool as Google! Really, we can! Stop laughing at me!" and the worst part is they STILL don't get it. Folks got used to using MSFT Operating Systems because that is what they used at work. Businesses like boring as shit, simple low resource OSes so they don't need to buy a gamer rig for their secretaries. Before it was all good- You had Win9X for home and WinNT/Win2K for business. But now they are determined to stuff us all in this multimedia bloated nightmare of an OS instead of giving business users a simple boring bloat free work environment.

    So I have no doubt that MSFT will continue to decline. That is what happens when you ignore a large chunk of your customers. And I am sure that there will be many Linux distros willing to try their hand at the business market, just as Apple is wedging their foot slowly but surely into the home market. Maybe if Win7 turns into another Vista failure(which I personally predict it will) then they will listen to their customers. Until then I see good things for companies like Red Hat that focus on the needs of business, instead of trying to go with a "one size fits all" approach to every PC market.

  • Re:Thank you Sun (Score:1, Insightful)

    by Anonymous Coward on Friday January 23, 2009 @12:10AM (#26570327)

    Sun has never found its FOSS feet - the company was founded on completely open software, but took it all proprietary (even if they did hand some back later). McNealy's ranting in the earlier days of Linux, funding SCO... etc etc... none of it has been forgotten. Even today, with OpenSolaris, they still haven't managed to get the same momentum as Linux, because they keep the development closed. Look at Linux kernel development - riotous, noisy, structured only to the degree necessary to get the job done... and yet the kernel development rips along adapting to the changing tech environment in a way that no other kernel has while still providing user land stability and security.

    I don't have any ill will to Sun, but they are struggling to adapt in a world that the Linux industry turned upside down by breaking all the established rules of commercial software development (thanks, in large part, to the FSF). Microsoft has survived so far because they have their own monopoly world (but poss not for long).

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