No Quick Fix for Sun's Malaise
Conclusion: The last 3 months have seen two significant announcements from Sun. Firstly the resignation of iconic CEO Scott McNealy in favour of Jonathan Schwartz, followed by an announcement of a planned 10%-13% reduction in workforce. Unfortunately Sun’s malaise has no quick fix and like notable IT giants before it (e.g., Digital Equipment, IBM) its problems are due to the commoditisation of its core value propositions, SPARC and Solaris.
As customers have increasingly adopted “good enough” Wintel/Lintel systems, Sun’s revenues have remained flat for the last 3 years and Sun has consistently posted losses since 2002. Sun has not yet established new value propositions that will return it to its former glory and the most likely outcome is a continued slide into irrelevance.