As Sun unravels, it's time for a new suit
Update: Sun says not so
Opinion With IBM reportedly breaking off the engagement, Sun must reinvent itself if it is to go it alone. That means bringing in a Joe Tucci lookalike to reform and restructure the business.
This is a highly personal opinion about how and why it should undertake that process. First of all, Sun's board and senior management need to recognise a few things that have become blindingly obvious to a lot of outside observers.
First of all, Sun cannot meaningfully monetise its massive developer download base. Those tens of millions of copies of Solaris, Java and other pieces of Sun software are bringing in diddly-squat revenues set against Sun's overall business and what it should be capable of doing.
Next, Sun cannot profitably survive in any sizeable way as a me-too x86 server vendor. It cannot prosper in any meaningfully-sized way as an open source software supplier and services vendor either, despite MySQL, Java and Open Solaris.
The Sun AMD play has run out of steam. Sun's hybrid server/storage play - the X4500 and similar products - is a limited niche offering that won't go very far. Sun's proprietary SPARC microprocessor architecture and the hardware built using it is severely threatened by Nehalem. Sun's mainframe tape storage business is a niche and always will be. Its mainstream disk drive arrays are me-too and going nowhere.
Their development has been crippled by Sun's focus on its Open Storage systems. This Open Storage effort, despite its coming in layered or tiered flash cache editions, with system software tweaked to use it, will not revolutionise the storage industry. Sun is wrong when it asserts that proprietary storage architectures will go the same way as proprietary server architectures and be washed away by commodity hardware and open source software, like Sun's Open Storage 7000 line. They won't.
Ditto Open Networking.
So, assuming these points are recognised, where does Sun go from here if it is not bought?
Continuing with its present strategy, which has been discredited by the company sale stories and by comprehensive business under-performance, should not be an option. Continuing with the present senior management team is also not viable. The first order of business by the board should be to choose a new CEO.
This CEO should have a deep and comprehensive understanding of the existing server, storage and software industry and markets, and be young enough to lead the company for, say, ten years of energetic activity. He or she should have rock-solid technology business leadership and execution experience, and a proven ability to take a ramshackle collection of underperforming businesses and turn them into a coherent and sustainably profitable whole.
There should be a re-evaluation of and re-definition of Sun's core value proposition (CVP), which should not be a re-affirmation that the network is the computer. Yes it is, but so what? That's what got Sun into the state it's now in.
The existing Sun businesses should be divided into sustainable niches, potentially profitable and reinforceable products, and disposable dogs. Acquisitions should be pursued to reinforce the sustainable and reinforceable businesses in line with Sun's new CVP. In storage, a list of potential acquisitions might include 3PAR, Compellent and Xiotech. In servers, Sun should go full tilt into blades and might consider trying to buy Brocade, to position itself for the one-stop server, storage, and networking shop that looks to be developing.
Sun's new CEO needs to conduct a wholesale review of the executive team and reduce the ranks to people who understand and support a necessary new order, and suggest that ones supporting the older, failed strategies in their area need to leave the company.
Who might potential CEOs be? An obvious quality would be to be like the Joe Tucci of ten years ago, someone from outside the top of the server and storage and software mainstream, but who understands it and has the business and personal qualities needed to take a dejected, demoralised and defeated company forward.
Sun's board should consider people with qualities like Brocade's Michael Klayko, someone able to sustain and grow a company against competitors. Riverbed's Jerry Kennelly is possibly a little old. HDS' Jack Domme and Iomega's Jonathan Huberman might have some of the qualities needed. LSI's Abhi Talwarkar might have some of them too. Bill Watkins isn't doing a lot at the moment, by the way.
Whether Scott McNealy should come back like Michael Dell is, in my personal opinion, moot. After all he hired Jonathan Schwartz, promoted him into the CEO spot and has supported the Schwartz strategies that have placed Sun in the position it is in today. A new broom might be best.
Reuters report that Sun mailed it a statement late on Monday which said: "As a policy Sun does not comment on rumors or speculation. What we can say is that Sun is committed to its leadership team, growth strategy and building value for its shareholders." ®