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In 1997, which is when I started following Sun, the business, and not just its hardware and operating systems, it was a hardware company. Oh, Sun would talk about Solaris, and it would promote Java, but Sun really made its money from hardware.
Specifically, Sun filled its piggy bank from servers and workstations built around the first UltraSPARC chips, which in turn were built around the 64-bit SPARC Version 9 architecture.
It was natural then that Suns stock symbol, SUNW stood for its first, circa mid-80s, “Stanford University Network Workstation.”
That worked great for Sun for awhile. In fact, I think Sun had too much success as a hardware company. Linux was starting to get traction in the business market for the first time, and Linux could do some of the things that high-priced SPARC systems could do on low-end x86 systems.
At first, Sun ignored Linux. Sure, Linux could do some little network jobs —low usage Web and file servers —but serious network serving? Workstation work? You had to be joking, was the common attitude at Sun.
But to show it was willing, Sun bought a Linux appliance company, Cobalt, in late 2000. But by 2003, Sun killed off its $2-billion Linux purchase. Why? Because, Suns high-profit margin SPARC camp had no use for Linux-based systems.
You could see Suns love/hate affair with Linux clearly by 2002. Customers wanted low-cost Linux so Sun, begrudgingly started to offer Linux solutions. When asked if Sun would ever run Linux on high-end SPARC systems, Jonathan Schwartz, now Suns CEO but then the executive VP of Suns software group, replied, “Why would we? Thats not what customers want.”
But while the pro-open-source/software forces inside Sun were fighting, and generally losing, to the SPARC crew, the world was leaving behind proprietary Unixes and the high-end and high-priced systems that they ran on.
Slowly, but surely, IDC and Gartners server shipment reports were showing that Sun was dropping further and further behind companies like Hewlett-Packard, IBM and Dell, which had embraced low-cost x86 systems running Linux.
According to Gartners latest report, Suns server shipments dropped by 11.4 percent in 2006s same quarter. IDC showed Sun doing better. But, IDC also reported that the revenue of non-x86 servers, such as SPARC-based systems, fell 2.3 percent while revenues from the sales of both Linux- and Windows-based systems increased.
The market has noticed. When Sun split it stock in December of 2000, its price was still over $20 a share. For the last five years though, the stock has stumbled around the $5 per share range.
So, Sun finally started changing. Slowly and painfully, it gave up on the idea that Sun could make money as a hardware company. Instead it began focusing on monetizing its software offerings.
Sun changes ticker symbol to JAVA. Click here to read more.
It had also learned, thanks to Linux, that turning software into profit was going to work the way it did in the 80s and 90s when Microsoft perfected its proprietary, lock customers in monopoly ways. Customers wouldnt stick with SPARC if there was a cheaper alternative, and there was no reason to think that theyd stick with Solaris on x86 if Linux was cheaper.
So carefully, Sun began moving toward open source. With leaders like Chief Open-Source Officer Simon Phipps, and, more recently, former Debian Linux leader Ian Murdock becoming Suns chief operating platforms officer, Sun began transforming itself from a hardware company to open-source software business.
In the summer of 2005, Sun open-sourced its primary operating system, OpenSolaris. In November 2006, Sun finally open-sourced Java, its home-grown and very popular development language. Sun didnt stop with just open-sourcing pure software though. With its recent Niagara chip set, Sun hopes to breath new life into its SPARC line by open-sourcing its architecture and its virtualization hypervisor APIs.
Its not just the headliners that Sun is open-sourcing. Sun has a small mobile phone division. In April 2007, Sun bought SavaJe Technologies with its Java-based embedded operating system. In small ways and in large, Sun continues to transform itself.
Schwartz, in his blog, announced the stock exchange ticker change by writing, “The number of people who know Java swamps the number of people who know Sun. Or SUNW, the symbol under which Sun Microsystems, Inc. equity is traded on the NASDAQ stock exchange … But SUNW represents the past, and its not without a nostalgic nod that weve decided to look ahead.”
While Javas brand is certainly part of the picture, and Sun as a hardware company is certainly history, I think Suns name change is more than just playing up Suns best-known brand. I think its symbolic of the companys complete transformation from server and workstation OEM to open-source software vendor.
Its a gutsy move, but the real work has been happening for years. Today, the only question that remains is will this public acknowledgement of Suns metamorphosis be enough to re-establish Sun as one of the leading technology companies rather than a close, but note quite top, IT enterprise?
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