Sun: Meet the New Boss, Same as the Old Boss

It seems like only last week that Scott McNealy was dismissing rumors that he was going to step down as Sun’s CEO. Wait a minute, it was last week!

The technology world is all atwitter with the news that McNealy did in fact turn over his job to Jonathan Schwartz yesterday. My local paper, the San Francisco Chronicle, covered it extensively this morning. 

Frankly, I don’t think this change makes much difference. I experienced an epiphany regarding Sun about six months ago. For a long time, I hadn’t been able to figure out what Sun was doing — high price boxes, aimless software initiatives, pointless acquisitions, and the like, but I just figured I wasn’t smart enough to understand the big picture.

But one day, I obtained enlightenment. I was delivering a day-long open source program to a local venture capital firm, helping them understand what open source is going to mean to their investment strategy (hint: at the end of the day, one partner looked to another and said “So, we’re never going to invest in another enterprise software company”). The firm had invited a colleague — one of the senior partners from a top five firm — to sit in on the program.

In one section of the program I was discussing open source licenses and their strategy implications. I noted that, in addition to the common licenses like GPL and Apache, their were many other licenses; for example, Sun’s SISSL. The visiting partner stopped me and plaintively asked “Can you explain Sun’s business strategy?”

That’s when it hit me. If a partner at the center of one of the top VC firms located at the center of Silicon Valley, which is the center of the world’s IT industry, can’t figure out Sun’s strategy, no one can.

In thinking over that moment in the intervening months, I’ve come to a conclusion. Sun is in a race between their business model and Moore’s Law. And, to quote Damon Runyon, “The race is not always to the swift, nor the battle to the strong, but that’s the way to bet.” Nobody, including Sun, is going to outrun Moore’s Law.

I’ve seen Jonathan Schwartz speak several times on open source. He very eloquently points toward the global spread of open source as a great thing and notes that incredible business opportunities will result from it (I refer to this future as the world of a Ubiquitous Software Infrastructure and believe that its potential is incredible — but more on that in a future post).

In these presentations, Schwartz then goes on and describes this world of widespread software as the bright future for Sun.

For me, this is like hearing a doctor brilliantly diagnose a patient, and then prescribe bleeding as the treatment. I completely agree with Schwartz’s analysis of the future of open source, but can’t see how Sun’s  lineup of expensive machines, huge headcount, and disorganized portfolio of products makes Sun a player in it. Sun is a high-margin player in a low-margin world and needs to find a way to live in it. Until it does, Schwartz will just be a new actor delivering the same tired lines.