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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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  • Honestly, does "market Capitalization" mean more than 700M in sales vs. 13B in sales?

    • Wrong. (Score:5, Informative)

      by AltGrendel (175092) <ag-slashdot @ e x i t0.us> on Thursday January 22, 2009 @12:16PM (#26561691) Homepage
      Definition - Market capitalization:
      an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share
      • Re:Wrong. (Score:5, Insightful)

        by QuantumRiff (120817) on Thursday January 22, 2009 @12:23PM (#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: (Score:2, Informative)

          by Facetious (710885)
          I believe what you are missing here is the cost side of things. Sun is a software AND a hardware vendor. Margins are much thinner on hardware, meaning that Sun's $13B - [large cost] produces profits on par with Red Hat's $700M - [small cost] equation.
        • [does] market capitalization really [say] 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?

          I think customers are a good way to predict what customers will do in the future, but sales volume is only a very small fraction of that equation. The people that really track customer behavior are investment analysts / non-technical financial people. And as far as stock traders being susceptible to hype, it isn't necessarily bad at all to "go with the flow", just be sure to jump ship in time if the only thing you are going on is hype.

          But in reality, for as much as traders may be unpredictable and suscepti

        • Re:Wrong. (Score:5, Informative)

          by ceoyoyo (59147) on Thursday January 22, 2009 @12:58PM (#26562383)

          It's almost as silly as judging a company by it's gross sales.

          What you're looking for is PROFIT. Sun's profit was 88 million, or 11 cents per share in the last quarter (down 73%) while Red Hat's profit was 24 million, or 12 cents per share, up about 7%. Sun is forecasting that they will lose money over the next year, while Red Hat is forecasting (and analysts agree) that they will continue making money.

          Sun still made more money than Red Hat, but even Sun agrees that's going to change.

        • Re: (Score:3, Informative)

          by jadavis (473492)

          I was asking if looking at the market capitalization really said more about how the company was doing than its sales numbers?

          It's easy to get high revenue -- just sell stuff at or below cost. You won't make a profit, but you'll have a lot of sales.

          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?

          There are many ways of evaluating a business as a whole, some are subjective, e.g. something "only a technical p

          • by jocknerd (29758)

            It's easy to get high revenue -- just sell stuff at or below cost. You won't make a profit, but you'll have a lot of sales.

            Dude, did you used to work for Dell?

          • Re: (Score:3, Informative)

            by tinkerghost (944862)

            And I also don't buy for one second this "very short term" mentality. Investors choose investments that have some intrinsic value that they believe will hold in the long term. If they don't, they know they might be caught holding the bag, and lose everything.

            I am going to point you to the current financial meltdown of some of the biggest banks & trading houses in the US(World) as proof that a large number of "Investors" are choosing investments that have intrinsic value. Most of these "commoditiezed mor

            • And they are always moving to maximize todays profit - even if that means destroying the long term sustainability of a company to do it.

              Shareholders have ousted several boards for favoring long term profit over the quarterly report, so it's not surprising that boards & CEO's are pushing more for the quick buck & less for the sustainability for that profit.


              This is one of the problems that I see with publicly-traded companies in a free market. John Deere is a perfect example of this.

              Deere use
          • by Znork (31774)

            Investors choose investments that have some intrinsic value that they believe will hold in the long term.

            As long as the currency, the fundamental measurement of value, is intrinsically unsound and the rules of the game are changed at whim there basically is no way to determine what investments have a long term profitability. Central banks inherently mismanage interest rates to generate demand that isn't real, leading to an eventual collapse of the kind we're currently seeing.

            they generally won't go to zero

        • by s4m7 (519684)

          Sun is still a power-player, there's no doubt about that, but looking the the business models of the two companies really makes me think.

          Sun has largely focused their revenue streams around two things that seem counterintuitive to me: Profiting from licensing of a (albeit very successful) programming language, and selling deployments that include software that they've developed or purchased, open-sourced, and then re-proprietized on their own hardware. In other words, SUN sells products, and makes some

      • Re: (Score:3, Informative)

        by Chris Burke (6130)

        Is there anyone who thinks that market cap is a good metric to judge a company's overall success by at this particular moment in time? Pretty much every stock has been hit and hit hard, and the degree to which the size of that hit has anything to do with the company itself is highly questionable. The relationship between stock price and a company's success is ephemeral in the best of times, but now?

    • by rbanffy (584143)

      You know... The relevant part is not about how much you sell, but how much of a profit you make from those sales.

      13B in sales won't help if you had 14B in expenditures over the same period.

  • by Facetious (710885) on Thursday January 22, 2009 @12:12PM (#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).
    • by thtrgremlin (1158085) on Thursday January 22, 2009 @12:21PM (#26561791) Homepage Journal
      ... then Linux market capitalization is how much software that previously cost money was made free, so if Linux can be considered directly responsible for killing Microsoft, which I think is some peoples objective, that puts their market capitalization at $400B - $153B = $247B. That means Linux has 1.6x the market capitalization of of Microsoft just in Operating Systems! That doesn't even begin to include all the other great FlOSS out there.

      Add to that the average wage of a software engineer times the number of man hours contributed to FlOSS, and you can quickly see how Microsoft is getting its butt kicked!

      I love the new math!
      • I love that this got modded Interesting.

      • by Otter (3800)

        so if Linux can be considered directly responsible for killing Microsoft, which I think is some peoples objective, that puts their market capitalization at $400B - $153B = $247B.

        I'm thinking there's more to the decline in Microsoft's market cap between the peak of the dot-com bubble and today's apocalypse than just Linux.

  • Thank you Sun (Score:5, Insightful)

    by rlp (11898) on Thursday January 22, 2009 @12:13PM (#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.

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

      by aliquis (678370) <dospam@gmail.com> on Thursday January 22, 2009 @12:16PM (#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: (Score:3, Insightful)

        by aliquis (678370)

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

        • Re: (Score:3, Insightful)

          by tnk1 (899206)

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

          Corrected that for you.

          • by aliquis (678370)

            Or rather, how the stock market believes the rest of the stock markets sees the stocks potential to raise regardless of the companies ability to generate revenue, their knowledge, experience, code or products :D

            Fixed that for us.

            • Which is basically redundant considering the market's assessment of an organization's value at any given point in time is mankind's most reliable assessment of its future value. Your first post was fine as is.

              • Which is basically redundant considering the market's assessment of an organization's value at any given point in time is mankind's most influential determinant of its future value. Your first post was fine as is.

                Fixed that for you

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

            by ChienAndalu (1293930) on Thursday January 22, 2009 @03:02PM (#26564719)

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

        • by rbanffy (584143)

          This only shows how open-source is a better economic model. Red Hat profits from their own work, in addition to the work of many others like IBM, SGI, HP, Oracle and Sun.

          Sun, on the other hand, also has to develop hardware (curring edge hardware, BTW). Their operation is far more costly.

          • Of course you didn't mention the key players - the early implementors of Linux. How many billions have they made?

            I guess this "better economic model" doesn't apply to the risk-takers, just to the opportunists that feed on them.

            • Re: (Score:3, Informative)

              by rbanffy (584143)

              If you refuse to make a profit, you can't blame those who don't when they make one by offering useful services to a large community.

              • I'm not blaming anyone. I'm simply saying whatever benefit there may be for that economic model it doesn't really apply to starting a project. Of course, I doubt that all the early implementors of Linux refused to make a profit.

    • by Anonymous Coward

      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

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

      by InlawBiker (1124825) on Thursday January 22, 2009 @12:29PM (#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.

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

        by DesScorp (410532) <<DesScorp> <at> <Gmail.com>> on Thursday January 22, 2009 @03:24PM (#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.

        • Re: (Score:2, Insightful)

          by Anonymous Coward

          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 runn

      • by sqldr (838964)

        It's not just price that puts people off sun, it's difficulty of use. There's all sorts of silly pointless things like why you have to put a 01 in front of mac addresses when configuring their ldap client to jumpstart stuff (apparently the 01 means "ipv4" or something, but after learning what it was, i figured it was too irrelevant to bother remembering what it was for), or how when you configure ldapclient it defaults to trying to do name lookups over ldap to look up the name of the ldap server (come on g

    • Re: (Score:3, Funny)

      I for one welcome our new Linux Overlords

    • Bad marketing (Score:5, Insightful)

      by Jim Hall (2985) on Thursday January 22, 2009 @01:38PM (#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.

      • Re: (Score:2, Interesting)

        by alexborges (313924)

        Thing is, they shouldve killed solaris and become a full fledged Linux or BSD shop with enormous expertiese on Unix and great services built on open source java. I think they probably could still pull it of, albeit with an enormous ammount of pain.

        They misread the game and didnt wanna get their feet cold: this is what happened to them.

        Kind of whats going to happen to microsoft and what is happening to music and movie distributors.

        • Re: (Score:2, Insightful)

          by ToasterMonkey (467067)

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

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

        by An dochasac (591582) on Thursday January 22, 2009 @06:52PM (#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!

    • by HardCase (14757)

      I agree. Anyway, it's been quite a while since market capitalization has been a good comparison of companies, particularly in the tech sector and especially with the current chaotic market. I guess that market cap is good for bragging rights, you know, "Ha, ha, we're bigger than you," otherwise, it's a minor component of many others that we use to compare companies.

  • by fishwallop (792972) on Thursday January 22, 2009 @12:14PM (#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.
    • ...but it is also about opportunity. It may hinge on the whims of hype, but it is very similar to a credit score. There are many factors that go into convincing someone to give you money, and of course only a part of that is going to be the technology, just like ideas are only part of an equation.

      Ever known a person with a good idea that didn't follow through on making it into something?

      It all comes down to predicting what customers are going to do. Unfortunately good talent, technology, and the drive to
    • You are correct about it not necessarily being about technical advances, but who cares? Why are technical advances so important? Did Ubuntu have some great technical advances that caused it to gain in popularity? Perhaps... but I don't think that's why most people like it, or at the very last, many of the people who use it probably can't point to any technical advance as a reason for why they use it. Market cap is a measure of the company's perceived worth, and in that sense, surpassing Sun is significant i

    • by fm6 (162816) on Thursday January 22, 2009 @03:02PM (#26564721) Homepage Journal

      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).

      It's symbolic because Sun was one of the leaders of the big change that occurred at the beginning of the microcomputer era, when Unix started to replace the old mainframe OSs. And it's symbolic because Sun is the last major player to consider Unix part of its core strategy. Other Unix vendors have become insignificant (SGI, SCO), disappeared, or changed their emphasis to Linux and Windows (IBM, HP).

      Also, if you want to run a supported, commercial Unix on commodity hardware, Solaris is really your only option. Which is why both HP and Dell offer Solaris preinstalled. Though I don't suppose they sell a lot of those systems.

      As a benchmark of the rise of Linux and the fall of Unix, yeah, it's not that big a deal. But symbols and benchmarks are different things.

      This may all be a big yawn to somebody whose career started after Linux began to take over. But to those of us who spent most of our professional lives working with Unix (I started in the early 70s, before Unix was even available commercially; I've worked for 5 different Unix vendors, including Sun) it's as big a symbol as the takeoff of a certain helicopter on Tuesday.

  • by AKAImBatman (238306) * <.akaimbatman. .at. .gmail.com.> on Thursday January 22, 2009 @12:17PM (#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.

    • by eln (21727) on Thursday January 22, 2009 @12:51PM (#26562277) Homepage

      I agree, but it's not only marketing. Sun has apparently decided to go into the support and commodity hardware market. In commodity hardware, margins are razor thin, so they really have to distinguish themselves. In my recent experiences with Sun x86 systems, quality has been something of a problem. They say it was a temporary issue with one of their plants in Mexico, but when we ordered a ton of x86 boxes about a year ago, it took much longer than it should have to get to us, and the failure rate was unusually high.

      Also, when they released the x4100 Mk2, they claimed it was virtually identical to the Mk1, and there would be no issues. However, it turns out they made some fairly significant changes such as changing the vendor of the on-board network cards to one that the OS image we were using at the time had no support for. It also had a different type of PCI port (PCIe versus PCIx, IIRC), which meant all of the extra NICs we had lying around were suddenly useless. Had they told us of these changes, it would have been no problem. Instead, they just told us our order was being changed to the "virtually identical" Mk2, and we had to scramble when we got them. Not great customer support there. After that incident, we actually stopped using Sun for x86 hardware entirely.

      Going back to marketing though, they are really pushing this "Open Systems" thing, which is nice and all, but their salespeople don;t know how to sell it. At a recent presentation, the Sun sales guy was talking up Open Systems, and a member of the audience asked, "If everything is open and interchangeable, why shouldn't I just use your free open source software and go buy a cheaper system from Dell? What is the advantage of your box, if it's commodity like the rest? Why should I buy from you?", and the sales guy had no answer for him! He actually stumbled over his words for about 30 seconds, at one point actually saying there was "no reason" before one of his colleagues finally pipes up with something about "end to end support".

      Maybe they need to be touting the end to end support first, and the open systems stuff second. Suits tend to like open source because it's a lot cheaper, not because they're big on the philosophy, so stop pushing the "open source" thing so hard when the open source bit is the part you're giving away for free. Market the entire platform as an end-to-end solution, and throw in the open source part as an aside. Sun's marketing team doesn't seem to get that.

      Anyway, that was a bit long-winded, but the point is that Open Source isn't going to save Sun by itself. They have more problems, and I see them surviving as a much smaller and less interesting company than they are today if they stick to the path they're currently on.

      • 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 wha
    • That's what happens when you manage from an engineering mind set. When SUN started, they were leaders in technology: no one was doing what they were doing and there was a need for that technology that they developed. The market only rewards better engineering when it satisfies their needs. Now, computing power is a commodity and generic software is a commodity.

      The market that is left in SAP type of stuff. Software that allows a company to become more competitive. There's more new markets, but I'm too old t

      • IBM was another player that tried to take advantage of their strong market dominance to control things. It didn't work out for them in the long run, and they had to adapt to an F/OSS world. This happened to sun just a bit later. Is the unmentionable company another software giant with strong market control that you predict has forgotten how they got to where they are today such that soon you will see them going on to the back burner? Big nameless company is nearing about the same amount of time IBM and Sun
    • Re: (Score:3, Insightful)

      by asv108 (141455)
      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.
      • That's not true. For example, when I go to Sun's URL for the Sun Fire T5240 [sun.com] and click through to the section to purchase a server, you first see the MSRP. However, after I login on the account window to the right, the price of the server now shows my corporate discount. Of course, this assumes you have an account that is linked with a corporate discount in the first place, but that seems like a fairly obvious assumption to me.

    • Re: (Score:3, Insightful)

      by C_Kode (102755)

      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

      • Re: (Score:3, Insightful)

        by AKAImBatman (238306) *

        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

    • by DesScorp (410532) <<DesScorp> <at> <Gmail.com>> on Thursday January 22, 2009 @03:30PM (#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.

  • by jellomizer (103300) on Thursday January 22, 2009 @12:24PM (#26561837)

    SUN's market was traditionally on High End equipment. Standard PC hardware has been getting to the Good enough category, and replaceing the need for the high end stuff. Even if the high end stuff today is that much more high end, we are reaching a point where we need less high end equipment.
    the 80's almost every major university had its own super computer. 90's they had a mainframe, 2000's they have high end microcomputer based servers.
    SUN product line has been between mainframe and microcomputers. Now their new stuff is either to much for what people need to too expensive for what you get.

    Linux growth has always been fasted with the Unix Corps who are upgrading to a new network, and it is way cheaper for a Unix corporation to switch to Linux (or Old Unix to New Unix) then to Windows. (Windows to Linux costs a lot more).

    • we are reaching a point where we need less high end equipment

      I think it is more like people / businesses no longer need so much specialized equipment as your average cheap PC can do almost anything, and what was once very specialized hardware is very efficient software that runs on consumer grade hardware. Wasn't sure if that is what you meant, but that is the impression I have gotten also.

  • ..if Redhat sold netbooks, laptops and desktops and servers pre loaded with linux that "just worked", all of it, no hardware gotchas anyplace.

    • Dell has really revolutionized direct PC sales. They are very aggressive and good at making up extremely slim margins with high volume and strong attention to supply line management. While it may all look like "computers", Dell and Red Hat are not even remotely in the same business after that. There is a good reason why IBM got out of the game. As it is, Canonical has a deal with Dell for Ubuntu (albeit one that lacks selection for my taste), and Red Hat has a deal with IBM for their high end machines if I
      • Well, ya (Score:2, Insightful)

        by zogger (617870)

        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

  • by blind biker (1066130) on Thursday January 22, 2009 @12:48PM (#26562233) Journal

    Anyone with a brain (ok, it takes perhaps a bit more than just half) knows that the stock market, as an entity, is an idiot.

    There, I said it. I expect to be modded down by Linux fanboys (which is NOT the same as intelligent Linux users, mind you. I like to think I belong to the latter).

  • Wasn't Sun in trouble a few months ago, where their market cap was less than book value? I.e. the market was sure Sun was going to waste whatever resources they had.

  • Now if we can only get Red Hat to support FS other than ext3. That snafu on their parts is causing us all kinds of angst at our shop.

    In fact, my biggest grip with RedHat is that they always seem 2-3 revisions behind everyone else. I mean, come on! I wonder exactly what it is they are doing with all that money?

  • Finally (Score:3, Funny)

    by pha3r0 (1210530) on Thursday January 22, 2009 @01:14PM (#26562655)

    2009, the year of the linux desktop!

  • Sun, perhaps unfairly, represents a fading Unix market. Red Hat, for its part, represents the rising Linux market.

    According to whom? FUD!!!

    • How is that spreading fear, uncertainty, and doubt? Sun has made a lot of money on Unix, and that market is declining. As many other comments have pointed out, in many ways Sun is not being innovative while I think much of the praise and speculation of Red Hat comes from a perspective of Red Hat being very forward looking, even if a reasonably new player in the game. Can you explain?
  • The realms of each company are not comparable.

    Sun's bread and butter has been with the sector of the economy that has being hit the worst by the financial meltdown: banks.

    If Sun can hang on long enough for the Financial industry to be sorted out, they will be back because they have technical offerings that cheap hardware manufacturers and Linux providers can only dream about (ZFS, dtrace, SMF, self healing, M series, honestly, this is cool stuff that actually have the potential to save tons of money to big

  • Great Joke (Score:4, Insightful)

    by afabbro (33948) on Thursday January 22, 2009 @04:45PM (#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.

  • by br00tus (528477) on Thursday January 22, 2009 @10:54PM (#26570191)

    First - Sun had a UNIX for x86 in 1992-1993 which was superior to Linux at the time. This is not hindsight being 20-20, my manager complained to me in 1997 (we had Solaris x86 dekstops) how Sun was screwing up Solaris x86. Red Hat only got things like a decent kernel crash dump put in recently - Sun really messed this up.

    Secondly - too slow to embrace "open source". Red Hat did and now their market cap is about to surpass the company that did not (soon enough anyhow).

    Thirdly - how necessary was dumping the Berkeley-like SunOS for the System V-like Solaris? I personally think they put too much of an effort into this, although opinions may vary.

    I watched SGI get killed in the mid-1990s. People began doing low-end graphics stuff on Macs or even Windows, and suddenly SGI only became a company for the high-end. It was easy to see that this was the future for Sun. Now Wall Street has collapsed, and the big market Sun had has dried up. And Wall Street has gone from an environment where in 2001 Linux was just a test project, to where some companies are now almost all Linux on the UNIX front, and are looking to dump their "legacy" Sun stuff. It didn't have to be this way.

    I first encountered Sun in the late 1980s and until recently I still had a lot of love for them. Red Hat's lack of things like a decent kernel crash dump bugged me. But now Red Hat really does have almost all of the stuff that a critical production server needs. Windows-heavy shops like Suse a lot. I know a lot of UNIX admins and shops that develop for UNIX, including in the traditional financial companies - everywhere the new machines coming in are Linux, and a lot of places are trying to phase their Suns out. I think metaphors of a Sun set are becoming appropriate. Sun screwed up x86 and they screwed up "open source" and now Solaris is going to be relegated to the dustbin that Ultrix and HP-UX are in. If you search for admin jobs on Craigslist, Solaris doesn't even have much of a lead on AIX. With Red Hat now having journaling filing systems, virtualization, decent kernel crash dumps, production Oracle instances that run as well (or better) than on Solaris, high availability and so on and so forth, I can think of very little that Sparc's running Solaris have that a cheaper x86-64 running Red Hat doesn't have.

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