I think it is very safe to say their failures had little to do with not appreciating the Internet or not understanding distributed computing. You might note that a LOT of companies that didn't survive that era actually understood both very well, and yet failed nonetheless. In a lot of cases you can point to startups these days that essentially retrieved those ideas from that era and reintroduced them to a world that had caught up with where they were at.

Sun moved in to this stuff. They understood it. They just weren't successful at figuring out how to run a business with it.