The Sun sets for Open Systems stalwart

The turn of the century was a bad omen for computing industry stalwart Sun Microsystems. Once seen as leading the pack in the Unix server market, its decline in fortune may have stemmed from its refusal to accept early on the potential of the Intel x86 platform as a viable, computing workhorse for all but the most demanding of applications.

As far back as 2002, Sun faced quarter-upon-quarter of revenue decline even as analysts estimate the market was actually picking up steam with rising server revenues by most vendors (except Sun).  And so it was that nearly 8 years later, Sun finally conceded defeat accepting an offer by database giant, Oracle, to be acquired for US$7.4 billion at 2009 levels.

Should the industry mourn the death of Sun? I don’t quite revenue the atmosphere during the days when Digital Equipment closed it’s doors following the completion of its acquisition by Compaq (itself eventually gobbled up by HP).

Will the sunset for a veteran hardware vendor mark the official beginnings of the dawn of the software age? It can be argued that for many years most industry observers swooned to the music of hardware vendors. Even today we applaud with each new processor by Intel, or the new lineup of Thinkpad laptops, and tomorrow – January 27, 2010 – the much anticipated Apple tablet device (or whatchamacallit). Sure, we turn our heads when Microsoft launched the latest incarnation of its much despised yet very popular Windows operating system. Yes, enterprises raised their hands to view the latest SAP ERP software. And definitely, businesses are listening more intently on how Software-as-a-Service will reduce their CAPEX cost considerably and make them look better on the accounting books because OPEX doesn’t hurt their market positioning as much as CAPEX.

Its hard to figure out when the software revolution started. But you can bet that just as Apple revolutionized the MP3 market not with a neat, flashy, fancy music player (on the contrary it defined convention by being overly simple) but with software, so too will we finally see the years ahead as the period when software defined how consumers and enterprises will use technology.

For the moment, we bid fond adieu to one of the pioneers of hardware-based computing solutions – Mr Scott McNealy. He is, by many reckoning one of the more colorful characters of Silicon Valley. Hopefully his legacy will somehow survive under the watch of Oracle CEO, Mr Larry Ellison – another industry stalwart.

CEO farewells are fun to read because they are often drafted by wordsmiths who don’t fully understand the emotional turmoil that accompanies an executive’s departure. I am not sure if Mr McNealy hired a professional writer for his farewell but it certainly paints a sad story of the rise and fall of an icon. So before you take out that tissue to wipe away the sadness in his farewell message, watch this video to take the bite out of Mr McNealy’s bittersweet farewell.

Click more for the memo.

 

Consolidation will come with more M&As in 2010

Streetinsider.com recently posted its commentary following IDC’s 2010 prediction that IBM would acquire Juniper Network. This may be a response to HP’s ongoing acquisition of 3Com and the continuing speculation of a potential Cisco-EMC merger.

The much delayed completion of the acquisiton of Sun Microsystems by Oracle will likely come to conclusion during the first of 2010.

Seeing itself more a bridesmaid than a bride is Brocade, which has put up its “For Sale” sign and seen no real suitor moving to take the offer. As far back as October 2009, Gigaom analysts pointed to Juniper as a potential buyer for Brocade. IBM would have also been a good suitor but the overlap is in the Foundry products (assuming Big Blue does acquire Juniper).

I still think Brocade would made a fine addition to HP. Of course Brocade may need to get rid of its Foundry portfolio to minimize overlap with HP’s Procurve offerring.

Assuming that Cisco and EMC do combine, that would leave NetApp and HDS as the lone pure play storage vendors. Can these two survive in an environment where customers want true ease of use, best possible integration, and one throat-to-choke accountability from their vendors?

If you look back at all this a proliferation of vendors came about because customers clamored for more choice. But while enterprises say they like choice because it allows them to haggle on the price, in reality, they will turn to one vendor who has everything because its simply easier to deal with one supplier than a multitude of vendors.

Having a choice of sources is great only in as much as it gives you the perception of freedom to pick what you want. But choice brings chaos to the equation. This goes agaiinst the grain of businesses that must operate in an orderly fashion so that processes can be streamlined resulting in greater efficiency, higher productivity and lower total cost of doing business. Which if my math is correct will mean greater profits and better shareholder value.

So the old adage of vendor lock-in doesn’t hold sway in today’s highly competitive world. As one CEO told me recently, “At the end of the day, its really not a matter of giving customers a wide array of choices to choose from. It is giving each customer the product that he or she will want to buy. And that could be just one product it just so happens to look a little different to the individual customer.”

Smoke and mirrors!