Sun's struggle for traction

Is its plan to buy Novell the desperate move of a company fighting to escape irrelevancy?
Written by Fran Foo, Contributor

Has the sun prematurely set on Sun Microsystems?

The company's desperate attempt to regain its footing has reached new heights. Jonathan Schwartz, Sun's chief operating officer, has gone public with his latest idea -- to buy Novell for its Linux business.

The justification? If Sun acquires Novell, IBM's Linux strategy would be in disarray.

Last year, Novell outbid Sun to purchase SuSE Linux for $210m (£115m) with IBM making a $50m investment in Novell.

Schwartz believes that IBM will increasingly push SuSE as the preferred Linux platform at the expense of its partner, Red Hat.

In a blog posting, he said IBM "is in a real pickle". To him, Red Hat's dominance "leaves IBM almost entirely dependent upon SuSE/Novell" and "whoever owns Novell controls the OS on which IBM's future depends."

Sun could have bought SuSE last November but was outmanoeuvred by Novell, which has a current market capitalisation of $2.6bn. Is Sun now compensating for its folly?

"If you're an IBM customer, you've probably received (or should prepare to receive) the pitch from IBM incenting you to move off Red Hat to SuSE -- it's clear they're worried that Red Hat's lock on customers is divorcing IBM from their customer relationships," Schwartz said.

His entire thought process is pretty myopic.

IBM is simply doing what every big business does -- executing what I define as a "promiscuous plot". Get into bed with as many partners as you can, keep them happy and reap the rewards. Doesn't Schwartz see it?

Big Blue long realised that in order to win the mindshare of the open source community, it has to play with everyone and play nice. Well, maybe not everyone but you know what I mean.

Sun is trying very hard to diversify and shed its "pure Unix shop" image. Buying a Linux company might improve matters but instead of Novell, perhaps a more viable option would be Mandrakesoft.

Mandrakesoft, which survived bankruptcy, shares one thing in common with Sun -- it hopes to see Linux-based computers in the mainstream. In France, a month-long project is underway with retail giant Carrefour to sell computers equipped with the Mandrakelinux operating system. In the US, Wal-Mart sells computers running on Linux, including Sun's version.

And so the struggle to re-invent itself continues. Sun's share price hovers around the $3.80 mark, thousands of employees have been laid off over the last few years, and its market share is dwindling.

To Microsoft, Linux has become more of a threat than Unix. And this is bad news to Sun -- when you become irrelevant to your competitor, you're virtually doomed.

Sun has an excellent research, development and engineering history, and the gift of Java has had an immeasurable impact on the computing industry. But as it attempts to confront its demons, Schwartz's impetuous announcement will surely ruffle some feathers within the company.

Well, empty vessels do make the loudest noise. Maybe it's time for Sun to take a step back and develop a proper vision and strategy instead of shooting from the hip.

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