Jackbond is pretty much an imbecile. That said...
Sun's biggest problem is upper management. As this article points out, you've got one "chief" that wants Sun to give up and die... and the other that wants Sun to keep doing what it's been doing... which is dying. No one seems to understand the basic fatal flaw of Sun.
That flaw is... you can't make money selling a free product. Java is good. Solaris is good. And both are free. No matter what the idiots at the top think... Sun is not a software company. It's a hardware company. Sparq made Sun the powerhouse it was. Having the best and most reliable servers combined with the best, fastest, and more reliable field service is what has always separated Sun from the two-bit PC makers.
Even in this "new" era... customers don't have the money to buy throw-away systems. They can't afford down time. So, the server that never fails is still going to be King Of The Servers. That's what Sun used to be. But, with constant cuts to field and support services instead of cuts to administrative overhead, Sun has become and continues to worsen into a company that's far too top-heavy. Paperwork doesn't impress customers or many a profit.
It's time for both Johnny and Scotty to step out of the way. Time to stop trying to administrate out of slumping sales and let services and product superiority speak for themselves.
Otherwise... Johnathan's right. Sell while there's something left to sell.
IBM’s acquisition of Sun Microsystems was shot down as its board split into two camps—one for the deal led by CEO Jonathan Schwartz and one against led by Chairman Scott McNealy—and the consensus appears to be that McNealy has a bad case of Yahoo-itis. Meanwhile, McNealy is also bordering on delusional by thinking Sun can get a better deal.
Here’s a sampling of the feedback I’ve been getting about Sun’s decision to turn down IBM’s acquisition overtures (Techmeme):
- McNealy has Jerry Yang-itis.
- McNealy has always thought more highly about Sun than anyone else has.
- McNealy can’t let go of the company he founded.
- McNealy should stay on the golf course.
- McNealy has torpedoed the company and is becoming this year’s Yahoo in the stupid corporate move department.
And I thought it was just me. McNealy’s act got tired for me back in the last downturn. The quips got old. His keynotes got old. And the numbers stunk quarter after quarter from 2001 until Schwartz took over in April 2006.
Thus far, Schwartz has proven to be a better operator of Sun than McNealy was at the end of his tenure.
Here’s a look at the annual figures (click to enlarge):
And.
Now let’s get the caveats out of the way. McNealy was whacked by a terrible technology downturn and Schwartz is just getting his. Nevertheless, Schwartz was named CEO for a reason—McNealy had lost the confidence of Wall Street after five years of losses.
This IBM-Sun saga does raise one glaring question: What does it mean when the guy operating Sun day-to-day thinks the IBM deal is a good one but the founder/visionary type who is usually doing customer meet-and-greets doesn’t?
It means that there’s a disconnect going on that should be pretty worrisome to anyone in Sun’s circle. It also means that there’s a founder who has too much pride and can’t let go of his baby. And it means that Sun may have torpedoed a lot of shareholder value over that pride.
Also see: Sun following the IBM deal collapse: Customer confusion en route
A few McNealy comments I’ve received:
- You can never overestimate the role perceptions play even in the face of stark reality. JAVA has floundered for an entire IT cycle and yet I’m sure many influencers within the company are SURE it’s a $20 stock in waiting.
- You’ve probably seen it a million times in start ups (founders not being able to let go). From the outside, it looks so ridiculous, arrogant and selfish. However, I sometimes wonder how I would handle a similar situation.
- Scott thinks more of Scott McNealy than he does of his company. Scott puffs up like the GoodYear Blimp, when he’s really the Hindenburg.
What’s truly galling to folks flooding my inbox is that McNealy has enjoyed being out of the CEO chair. After all, he had a top 10 list about how he liked being out of the CEO role.
Top 10 Best Things About Not Being CEO10. I don’t have to apologize for the stuff I say to Wall Street9. I’m no longer on the most overpaid CEO list8. I just say, “see Jonathan on that”7. I read Hockey News without guilt6. I shave even less often5. No more Sarbanes Oxley certification4. I have someone to blame3. I can sell my last business suit2. Jonathan doesn’t golf, so I guess I gotta do it1. My office is very close to the men’s room
And then there’s this McNealy quote:
“The best decision is the right decision. The next best is the wrong decision. The worst decision is no decision.”
It’s unclear how this deal gets resolved, but if IBM doesn’t acquire Sun it’s clear that the company is on the path to being this year’s Yahoo. And that would clearly be the wrong decision.
