Why Sun Microsystems Failed

IMHO from a large-enterprise perspective:

1) A failure to execute. They were increasingly unable to compete in the high-end UNIX server market against IBM. The Rock processor was constantly delayed. Their machines fell behind in performance, Solaris was harder to manage and less stable than AIX.

2) Inability to capitalize on their inventions. IBM used Java as a common language across all of their enterprise platforms, they sold Websphere as a common application platform. NetApp was able to build a large business off NFS.

3) Linux/Intel got a lot better on the low end, Sun could not give a good reason why their platform was worth the additional cost. Usually when you are disrupted on the low end, you move upmarket, but due to 1) they were unable to take this path.

4) Muddled strategy: they dabbled in a lot of things-storage, office suites, mysql, etc. It was hard to tell if they loved or hated open source at times. They spent years battling Microsoft in the press. They had 2-3 different virtualization technologies. Some of the best Fake Steve Jobs posts are when he ripped into Sun.

5) Even if they were able to execute, their niche was becoming less viable. A mid-tier hardware manufacturer using a proprietary operating system is not a good position to be in. They did not have the deep enterprise roots and consulting business that IBM has, nor a massive install base like Linux or Windows.

The featured comment is way more insightful than the actual article:

The NETWORK is the computer, remember? Sun lost track of this reality. They were a systems company, yes, with emphasis on the hardware devices business rather than software. Lack of focus on software was not the cause of Sun's downfall. It was that they lost the vision of systems evolution in the NETWORK. Systems are now on a chip, in a hand held smart device that is mobile with access to apps. in the data center or cloud over the NETWORK. Sun understood this in its early years, but lost track of the trend later on, lured into selling "big iron" and mired in the status quo. Furthermore, Sun was a bloated company that refused to make staffing cuts when necessary. Sun was blinded by Sun. [sseiden920]

When I tried to buy about a half-million dollars in gear from them one time (through suppliers, of course), rather than simply delivering it, they tracked their suppliers, put a hold on ALL suppliers doing business with us, had their internal sales guy call me directly, make me an offer higher than the others were offerring me, and hten kept trying to upsell me on more services. It took me a month to get a quote, 3 months to get an order, and by then the project was cancelled so we didn't buy.

I was astonished. Nothing wrong with upselling - but here I was, a guy who LIKED sun gear, with cash ready to go, and a product list, the easiest sale in the world - not that big, and for some reason sun had to get all involved and screw themselves out of the sale.

When someone comes to you knowing exactly what they want, ready to pay, SHIP IT TO THEM!

It's no surprise they failed.

"Used car salesmen, with their goods at least visible to the naked eye, are paragons of virtue compared to software salesmen."

I've known a few of both and have to say this really isn't true. Virtue pays off when there is a relationship and I can't imagine having a business relationship with a used car salesman.

"Different isn't always better, but better is always different." -- My roommate's Sun Microsystems coffee mug

I never noticed this before, but eclipse blocks out the sun.

I don't indulge in the SUNW autopsy parlor game often, but coincidentally, I've already played it twice today (for the first time in many months), and I'm waiting on a build -- so perhaps the third time's a charm...

Disclaimer: I was one of the ones who tried like hell to right the ship. So I am not only suffering from the same hindsight bias that everyone else will inevitably suffer from, I am further biased by the lens of my own actions and experience.

That said, I think Sun's problem was pretty simple: we thought we were a hardware company long after it should have been clear that we were a systems company. As a result, we made overpriced, underperforming (and, it kills me to say, unreliable) hardware. And because we were hardware-fixated, we did not understand the economic disruptive force of either Intel or open source until it was too late. (Believe me that some of us understood this: I worked extensively on both Solaris x86 and with the SPARC microprocessor teams -- and I never hesitated to tell anyone that was listening that our x86 boxes were starting to smoke the hell out of UltraSPARC.)

Now to be honest, I (and others on the software side) played a role in enabling bad hardware behavior: we spent too much time trying to help save microprocessor management from an unmitigated disaster of their own creation (UltraSPARC-III, cruelly code named "Cheetah") when we should have been more forcefully advocating cutting them off. Personally, I feel I only started to really help the company turnaround when I refused to continue to enable it: I (and we, really) stopped trying to save the hardware teams from themselves, and focussed on delivering innovative systems software. And indeed, the software that resulted from that focus bought the company time and (I believed) an opportunity for renaissance: when coupled with the return of Andy and the open sourcing of Solaris, there was reason for great optimism around 2005 or so...

Unfortunately, it wasn't enough. One could argue that our technological pivots were too late, and they may well have been, but I think that the urgency and focus that we felt in the engine room (aided by the bone-cold water that was at our knees and rising) was simply not felt or appreciated in the wheelhouse: I feel that we could have made it had there been more interest at the top of Sun in the mechanics of running and managing a multi-billion dollar business...

Or maybe it's not so unfortunate: thanks to the fact that we open sourced the system, I still get to work everyday on the technology that I devoted my career to -- and I'm loving it more than ever, and having more fun developing it than I have in a long, long time. (And, it must be said, I'm working with many of the same engineers that made working at Sun great.)

So when I look back on those years, I believe it will ultimately be with fondness, not regret; for me personally, Scott nailed it: "Kicked Butt, Had Fun, Didn’t Cheat, Loved Our Customers, Changed Computing Forever."

(This article reminds me of Nokia, whose software divisions must have suffered at the hands of hardware-dominated managers.)

Solaris x86 could have been a viable challenger to Red Hat had it been open sourced and free. Unfortunately, the presence of Linux-as-a-movement and IBM's backing meant that Solaris's success was far from assured. A movement is like an earthquake. By the time the earth is shaking it is already too late.

Java did well on the server-side, but Java on the client-side left a big vacuum which Adobe proceeded fill. I remembered the early days of AWT where the demos ran better on Microsoft's JVM than on Sun's JVM. Sun Java was far from performant then. Meanwhile, Swing was designed to look good on Solaris but is pretty much alien-looking on Windows. It was excruciatingly slow in the early days. I remembered how refreshingly fast SWT ran on Eclipse 1.0.

The only way any of the great Unix companies survived Linux was by massively pivoting away from the Big Iron. HP moved into PCs and printers and IBM into consulting. Sun was the last one really giving it a go, valiant effort, but they were never able to find a new market to move into.

In McNealy's admission, Sun underestimated 32 bit and thought everyone was moving to 64 bit. Maybe they under and over estimated the price/performance ratios of the two, and overlooked the importance of clustered server farms running Linux.

CPUs aren't like engines, and servers aren't like cars. Cars can't be tied together, and not everyone wants or needs a sports car.