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Red Hat Set To Surpass Sun In Market Capitalization

CmdrTaco posted more than 5 years ago | from the now-that's-a-milestone dept.

Red Hat Software 221

mytrip writes "In what may come to be seen as a deeply symbolic moment in the history of operating systems, Red Hat is on the verge of surpassing Sun Microsystems' market capitalization for the first time. Sun, perhaps unfairly, represents a fading Unix market. Red Hat, for its part, represents the rising Linux market. Given enough time for its open-source strategy to play out, Sun's market capitalization will likely recover and outpace Red Hat's."

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221 comments

frist psot (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#26561563)

Frist PSOT! or not

Re:frist psot (5, Funny)

Hognoxious (631665) | more than 5 years ago | (#26561661)

A thousand and one posts saying that it's illegal/immoral/impossible to make money from open source software will be along soon.

They'll be followed shortly after by sevaral thousand more complaining that all corporations are evil and should be banned.

In turn those will be followed by several million arguing that google are/aren't evil, or disputing the subtle nuances between doing evil and being evil.

In other words: normal service will be resumed as soon as possible. The tuna salad is off, by the way.

Re:frist psot (2, Funny)

Anonymous Coward | more than 5 years ago | (#26562265)

Did You Know? After maintaining a vow of silence for almost 7 years, Red Hat Linux founder Marc Ewing now freely admits that he named Red Hat Linux after Limp Bizkit frontman Fred Durst's trademark red New York Yankees baseball cap.
Durst and Ewing met in Ewing's hometown of Raleigh, North Carolina (Durst was raised in Gastonia, NC), where they became fast friends, sharing the same passion for low-level system programming.
Durst collaborated with Ewing on the first preview beta of Red Hat Linux before the demands of his rocketing stardom forced him to abandon his hobby and tour with his band.
Durst's position on the development team was filled by Damien Neil, and not many know of his contribution to the popular Linux distribution; however, a google search through the source code on Redhat.com (http://www.google.com/search?q=wfd+site:redhat.com) reveals many snippets of code authored by 'wfd', Durst's initials (William Frederick Durst).
Durst asked Ewing to keep his 'geeky' roots a secret as it would not lend itself to Durst's bad boy image, but as Ewing points out, it was "only a matter of time" before the origins of his NASDAQ-100 company's name were uncovered.
--mfh

Re:frist psot (1)

The End Of Days (1243248) | more than 5 years ago | (#26562497)

Durst and Ewing met in Ewing's hometown of Raleigh, North Carolina (Durst was raised in Gastonia, NC), where they became fast friends, sharing the same passion for low-level system programming.

That made me laugh deeply. Kudos.

Re:frist psot (4, Funny)

Z34107 (925136) | more than 5 years ago | (#26563247)

A thousand and one posts saying that it's illegal/immoral/impossible to make money from open source software will be along soon. They'll be followed shortly after by sevaral thousand more complaining that all corporations are evil and should be banned. In turn those will be followed by several million arguing that google are/aren't evil, or disputing the subtle nuances between doing evil and being evil. In other words: normal service will be resumed as soon as possible. The tuna salad is off, by the way.

Wow! The Readers Digest version of Slashdot!

frist psot (-1, Offtopic)

Anonymous Coward | more than 5 years ago | (#26561581)

w00t!!!1!

So what? (1)

QuantumRiff (120817) | more than 5 years ago | (#26561627)

Honestly, does "market Capitalization" mean more than 700M in sales vs. 13B in sales?

Wrong. (4, Informative)

AltGrendel (175092) | more than 5 years ago | (#26561691)

Definition - Market capitalization:
an estimation of the value of a business that is obtained by multiplying the number of shares outstanding by the current price of a share

Re:Wrong. (5, Insightful)

QuantumRiff (120817) | more than 5 years ago | (#26561817)

I understand that. I was asking if looking at the market capitalization really said more about how the company was doing than its sales numbers? Do we now judge the success of tech companies by looking at what non-technical financial people think the company might be worth in the very short term?

Really, I think it says more of the "investors" that they think a company with sales of 700M a year should be worth (in market capitalization terms) the same or more than a company with sales of 13Billion a year.

Re:Wrong. (1, Informative)

Facetious (710885) | more than 5 years ago | (#26561947)

I believe what you are missing here is the cost side of things. Sun is a software AND a hardware vendor. Margins are much thinner on hardware, meaning that Sun's $13B - [large cost] produces profits on par with Red Hat's $700M - [small cost] equation.

Re:Wrong. (5, Informative)

Estanislao Martnez (203477) | more than 5 years ago | (#26562215)

That is largely right, except for one detail: Red Hat is producing profits, but Sun recently posted a big loss, mostly due to a 1.45B impairment of goodwill charge. (In English: they revised their estimate of the value of some of the companies they've purchased, down 1.45B).

To answer the original thread poster's question: it's not how much you sell, it's how much your keep.

Re:Wrong. (1)

thtrgremlin (1158085) | more than 5 years ago | (#26562319)

[does] market capitalization really [say] more about how the company was doing than its sales numbers? Do we now judge the success of tech companies by looking at what non-technical financial people think the company might be worth?

I think customers are a good way to predict what customers will do in the future, but sales volume is only a very small fraction of that equation. The people that really track customer behavior are investment analysts / non-technical financial people. And as far as stock traders being susceptible to hype, it isn't necessarily bad at all to "go with the flow", just be sure to jump ship in time if the only thing you are going on is hype.

But in reality, for as much as traders may be unpredictable and susceptible to hype, you got to admit that customers are MUCH worse.

Re:Wrong. (4, Informative)

ceoyoyo (59147) | more than 5 years ago | (#26562383)

It's almost as silly as judging a company by it's gross sales.

What you're looking for is PROFIT. Sun's profit was 88 million, or 11 cents per share in the last quarter (down 73%) while Red Hat's profit was 24 million, or 12 cents per share, up about 7%. Sun is forecasting that they will lose money over the next year, while Red Hat is forecasting (and analysts agree) that they will continue making money.

Sun still made more money than Red Hat, but even Sun agrees that's going to change.

Re:Wrong. (0, Redundant)

Forge (2456) | more than 5 years ago | (#26563713)

According to Yahoo Finance (and I may be misreading stuff, being a novice investor and amateur trader), Sun lost money last year.

So Which business would you rather own: One that makes $24 or one that looses $1400?

Since both are expected to continue in the same direction (RHT posting greater profits while JAVA posts greater losses) The Market caps continue to trend in opposite directions.

At some point Sun will reverse that trend or it's parts will end up being worth more than the whole.

Re:Wrong. (2, Informative)

jadavis (473492) | more than 5 years ago | (#26562437)

I was asking if looking at the market capitalization really said more about how the company was doing than its sales numbers?

It's easy to get high revenue -- just sell stuff at or below cost. You won't make a profit, but you'll have a lot of sales.

Do we now judge the success of tech companies by looking at what non-technical financial people think the company might be worth in the very short term?

There are many ways of evaluating a business as a whole, some are subjective, e.g. something "only a technical person can understand why this is good", and some are objective, e.g. something that any financial expert can understand.

You may like to think that you have a lot of insight about the value of a company because you know something about the technologies they use or produce. And that's true, to some degree.

But your ignoring the numbers outright. And the numbers mean a lot. If Sun continues to lose money, and never turns a profit, then its value is precisely the liquidation value of its assets. I'm not saying that's what will happen, but profit is clearly important to the value of a business.

And you're also ignoring all the subjective aspects that you have no ability to evaluate. How well are they targeting their value proposition in the latest advertising campaign? How competent are the executives? Are they using the right pricing model?

I don't buy for one second the idea that non-technical people are clueless about the technology business.

And I also don't buy for one second this "very short term" mentality. Investors choose investments that have some intrinsic value that they believe will hold in the long term. If they don't, they know they might be caught holding the bag, and lose everything.

There are exceptions, "irrational exuberance", etc. But most money is tied up in things with intrinsic value. Those investments may go up or down, but they generally won't go to zero.

Re:Wrong. (1)

jocknerd (29758) | more than 5 years ago | (#26562827)

It's easy to get high revenue -- just sell stuff at or below cost. You won't make a profit, but you'll have a lot of sales.

Dude, did you used to work for Dell?

Re:Wrong. (2, Informative)

tinkerghost (944862) | more than 5 years ago | (#26563747)

And I also don't buy for one second this "very short term" mentality. Investors choose investments that have some intrinsic value that they believe will hold in the long term. If they don't, they know they might be caught holding the bag, and lose everything.

I am going to point you to the current financial meltdown of some of the biggest banks & trading houses in the US(World) as proof that a large number of "Investors" are choosing investments that have intrinsic value. Most of these "commoditiezed mortgages" were junk, that's why they were being sold. However "investors" saw a chance at a quick buck & bought them up like a 3 year old buying penny candy.

I use "investor" loosely here as they aren't investors, they are speculators. The majority of the money being moved around on any given day isn't about long term investment. It's about short term speculation - hoping to grab a 1-3% growth in 14 days or less, followed by bailing & reinvesting hoping for an annual return of 20% or more.

Investors buy for the long haul. IBM stock isn't a huge mover & isn't likely to make you rich. But it usually shows steady growth and has a dividend.

The majority of the money in the stock market may in fact be invested in long term stocks and bonds, but what people see on the news at the end of the day is how the day traders and speculators are moving. And they are always moving to maximize todays profit - even if that means destroying the long term sustainability of a company to do it.

Shareholders have ousted several boards for favoring long term profit over the quarterly report, so it's not surprising that boards & CEO's are pushing more for the quick buck & less for the sustainability for that profit.

Re:Wrong. (1)

s4m7 (519684) | more than 5 years ago | (#26562775)

Sun is still a power-player, there's no doubt about that, but looking the the business models of the two companies really makes me think.

Sun has largely focused their revenue streams around two things that seem counterintuitive to me: Profiting from licensing of a (albeit very successful) programming language, and selling deployments that include software that they've developed or purchased, open-sourced, and then re-proprietized on their own hardware. In other words, SUN sells products, and makes some money selling support contracts for these products.

Red Hat, on the other hand, primarily sells a service. Their products, including an extended open-source operating system that they didn't spend that much on development for (relatively), are really just vehicles to get support contracts.

Now I agree that this market-cap milestone is an investor's assessment, but bear in mind that investors in tech companies generally know what the companies they're investing in are up to. That said, I think it's obvious to most people that the service market has much more potential as a growth market than the products market does, especially in light of current economic conditions.

Re:Wrong. (0)

Anonymous Coward | more than 5 years ago | (#26563515)

Market capitalization doesn't mean shit. Nobody will admit this. What matters is the following:
- making a profit
- number of people's income you sustain (# of employees)

Anyone who thinks trading company stock on an open stock market is a good idea is fucking retard. That is only suited for setting the price of bars of gold and truckloads of corn.

Re:So what? (1)

rbanffy (584143) | more than 5 years ago | (#26562799)

You know... The relevant part is not about how much you sell, but how much of a profit you make from those sales.

13B in sales won't help if you had 14B in expenditures over the same period.

Re:So what? (0)

Anonymous Coward | more than 5 years ago | (#26563529)

I think what they are trying to say is that Red Hat's share price is nonzero.

Re:So what? (0)

Anonymous Coward | more than 5 years ago | (#26564013)

Honestly, does "market Capitalization" mean more than 700M in sales vs. 13B in sales?

Well I think if they'd meant "sales", they'd have put "sales", and not "market Capitalisation".

The sum of Linux vendor capitalization (4, Insightful)

Facetious (710885) | more than 5 years ago | (#26561631)

The makes me curious. If all Linux vendors had an equivalent of publicly traded market capitalization, what would their sum total be? Naturally it would be lower than Microsoft's $153B (as of this morning), but that isn't bad considering Linux can be had for free. (BTW, I remember back when msft's market cap was over $400B).

If Linux is how much can be made free... (4, Interesting)

thtrgremlin (1158085) | more than 5 years ago | (#26561791)

... then Linux market capitalization is how much software that previously cost money was made free, so if Linux can be considered directly responsible for killing Microsoft, which I think is some peoples objective, that puts their market capitalization at $400B - $153B = $247B. That means Linux has 1.6x the market capitalization of of Microsoft just in Operating Systems! That doesn't even begin to include all the other great FlOSS out there.

Add to that the average wage of a software engineer times the number of man hours contributed to FlOSS, and you can quickly see how Microsoft is getting its butt kicked!

I love the new math!

Re:If Linux is how much can be made free... (1)

Otter (3800) | more than 5 years ago | (#26562219)

so if Linux can be considered directly responsible for killing Microsoft, which I think is some peoples objective, that puts their market capitalization at $400B - $153B = $247B.

I'm thinking there's more to the decline in Microsoft's market cap between the peak of the dot-com bubble and today's apocalypse than just Linux.

Re:If Linux is how much can be made free... (1)

maxume (22995) | more than 5 years ago | (#26563191)

Yes. In terms of absolute revenues and profits (rather than percent increase), Microsoft has been growing faster than Google for the entire time that Google has been a company. Also, Microsoft increases their revenues and profits by more than the entirety of Redhat's annual revenues and profits on a monthly basis.

Re:If Linux is how much can be made free... (0)

Anonymous Coward | more than 5 years ago | (#26562883)

You are a fool. What about Apple? They contribute far more to Microsoft's supposed decline than Linux does.

Re:If Linux is how much can be made free... (1)

thtrgremlin (1158085) | more than 5 years ago | (#26563973)

Personally, I think Microsoft is the greatest contributor to Microsoft's decline. Apple is picking up a lot of the slack on the innovation, and I think Linux sets a hard standard with what everything needs to be better than (or appear better than) in order to be profitable. Windows 98 was great, as was NT4. Windows XP was the best of both worlds... but after that they do not have a lot to offer than the promise of native support for DirectX, .NET and Silverlight which work just fine on XP? This is not meant of a ridicule of anyone that fancies Vista or looking forward to Windows 7, is just that for me, if you are looking for something more from your computing experience, Microsoft hadn't introduced competitively more for a long time, and after several years, I don't see a reason, for me, to try it again. Windows 7 has caught my attention and running the Beta 1 in a VM. I am impressed, but nothing that makes my wallet itch.

Thank you Sun (5, Insightful)

rlp (11898) | more than 5 years ago | (#26561651)

I for one hope that Sun not only survives, but prospers. Sun has greatly contributed over the years to the development community, particularly FOSS developers.

Re:Thank you Sun (4, Insightful)

aliquis (678370) | more than 5 years ago | (#26561705)

Personally if I got to choose one of either all of Suns knowledge, experience, code and products or Redhats I'd for sure go with Sun.

Obviously the market works differently =P

Re:Thank you Sun (2, Insightful)

aliquis (678370) | more than 5 years ago | (#26561725)

(differently = who is more likely to make money of their knowledge, experience, code and products :D)

Re:Thank you Sun (3, Insightful)

tnk1 (899206) | more than 5 years ago | (#26561795)

(differently = who the stock market thinks is more likely to make money of their knowledge, experience, code and products :D)

Corrected that for you.

Re:Thank you Sun (1)

aliquis (678370) | more than 5 years ago | (#26562105)

Or rather, how the stock market believes the rest of the stock markets sees the stocks potential to raise regardless of the companies ability to generate revenue, their knowledge, experience, code or products :D

Fixed that for us.

Re:Thank you Sun (1)

SavvyPlayer (774432) | more than 5 years ago | (#26562487)

Which is basically redundant considering the market's assessment of an organization's value at any given point in time is mankind's most reliable assessment of its future value. Your first post was fine as is.

Re:Thank you Sun (1)

rbanffy (584143) | more than 5 years ago | (#26563081)

This only shows how open-source is a better economic model. Red Hat profits from their own work, in addition to the work of many others like IBM, SGI, HP, Oracle and Sun.

Sun, on the other hand, also has to develop hardware (curring edge hardware, BTW). Their operation is far more costly.

Re:Thank you Sun (1)

ClosedSource (238333) | more than 5 years ago | (#26563229)

Of course you didn't mention the key players - the early implementors of Linux. How many billions have they made?

I guess this "better economic model" doesn't apply to the risk-takers, just to the opportunists that feed on them.

Re:Thank you Sun (2, Informative)

rbanffy (584143) | more than 5 years ago | (#26563937)

If you refuse to make a profit, you can't blame those who don't when they make one by offering useful services to a large community.

Re:Thank you Sun (1)

crowne (1375197) | more than 5 years ago | (#26563023)

I think the market pricing is more concerned with operating costs and customerbase rather than knowledgebase.

Sun has always been very bad in business (2, Insightful)

Anonymous Coward | more than 5 years ago | (#26561909)

It's not that Sun would have done the wrong things. Their problem for the last 15 years has been that they have been over-careful of commitment into their own business. From business perspective they have been apathic at best, and I iterate the same I said in 90s already: I would not invest a penny into them.

They have not taken any steps to fix their real problems so far, so likely they will just keep sinking slowly until the company will be bought by someone who knows how to actually run companies. Perhaps even by Microsoft, who knows :)

Re:Thank you Sun (4, Insightful)

InlawBiker (1124825) | more than 5 years ago | (#26561925)

Sun has been a great innovator, but when they were the only game in town they charged obscene prices for their products and services. It helped open the door for Linux and Sun has only itself to blame.

When you walked into a data center ten years ago all you saw were Sun servers. Where I work now I'm hard pressed to find a single Sun box anywhere.

Bad marketing (4, Insightful)

Jim Hall (2985) | more than 5 years ago | (#26563127)

I for one hope that Sun not only survives, but prospers. Sun has greatly contributed over the years to the development community, particularly FOSS developers.

Sun has certainly contributed many highly-visible projects that we just take for granted these days: NFS, OpenOffice, Java, GNOME, etc. And ZFS is very powerful, but hasn't really made it to other places yet. However, it just seems Sun doesn't know what to do with it, or how to market it.

A few years back, I got to visit Sun for an executive briefing. We met with a lot of higher-ups at Sun (including Scott McNealy.) I repeated to whoever would listen that Sun needed to get their act together: Figure out an (easily-understood) strategy for Sun and FOSS, and move with it. Separate the hardware and software marketing; and at the same time, let me choose systems "menu-style" just like buying a Dell. Simplify your product lines and marketing. Release a consumer-based UNIX distro for commodity PC systems that has the polish of Linux (the apps are there - Firefox, OpenOffice, etc. - so for 99% of the population that's the "compatibility" they need.)

Yes, Sun has done some of these things, but not in a coherent way, and certainly not in a simple way. Things are just too hard to go through Sun.

Sun needs to get organized if they want to remain competitive.

A relatively unimportant event (4, Insightful)

fishwallop (792972) | more than 5 years ago | (#26561669)

I fail to see why this is a "deeply symbolic moment in the history of operating systems" and not merely a moderately interesting moment in the corporate history of the respective companies (or, more specifically, in Red Hat's corporate history). Red Hat may represent Linux, but it's not Linux, and market capitalization, being a function of share price, is a less interesting metric then any measurement of the actual use of the operating systems these companies produce. Anyone who remembers the Red Hat IPO will know that share price is more closely tied to hype than to particularly signficant tecnical advances.

its all about speculation... (1)

thtrgremlin (1158085) | more than 5 years ago | (#26562103)

...but it is also about opportunity. It may hinge on the whims of hype, but it is very similar to a credit score. There are many factors that go into convincing someone to give you money, and of course only a part of that is going to be the technology, just like ideas are only part of an equation.

Ever known a person with a good idea that didn't follow through on making it into something?

It all comes down to predicting what customers are going to do. Unfortunately good talent, technology, and the drive to succeed is not enough. You need capital. Add customers whims into the whole equation and it is just one big mess where many people are trying to profit (including the customer that wants the best value product for their money).

So is it a big deal when investor confidence + actual investors + talent + drive + technology = a number nearly bigger than Sun Microsystems? ABSOLUTELY! It is good for Red Hat, Linux Community, and even customers. It boosts everyones confidence to see the most intelligent and greedy people saying "This is where I am going to keep my money". This in turn becomes better for everyone. Also, I don't think it is so much "better than Sun" that is the issue, but the fact that they have hit the mark to definitively say that they are in the same league.

It makes me as happy as something like this can when nobody is writing me the check.

Re:A relatively unimportant event (0, Offtopic)

period3 (94751) | more than 5 years ago | (#26563671)

I fail to see why this is a "deeply symbolic moment in the history of operating systems" and not merely a moderately interesting moment in the corporate history of the respective companies (or, more specifically, in Red Hat's corporate history). Red Hat may represent Linux, but it's not Linux, and market capitalization, being a function of share price, is a less interesting metric then any measurement of the actual use of the operating systems these companies produce. Anyone who remembers the Red Hat IPO will know that share price is more closely tied to hype than to particularly signficant tecnical advances.

I fail to see why people insist on saying "fail to see" instead of "don't see". It doesn't make you sound intelligent, it makes you sound pompous.

Re:A relatively unimportant event (1)

dollargonzo (519030) | more than 5 years ago | (#26563829)

You are correct about it not necessarily being about technical advances, but who cares? Why are technical advances so important? Did Ubuntu have some great technical advances that caused it to gain in popularity? Perhaps... but I don't think that's why most people like it, or at the very last, many of the people who use it probably can't point to any technical advance as a reason for why they use it. Market cap is a measure of the company's perceived worth, and in that sense, surpassing Sun is significant in that it suggests that Sun's business model is not in line with its revenue stream.

Further evidence... (5, Insightful)

AKAImBatman (238306) | more than 5 years ago | (#26561727)

...that marketing trumps technology. Sun has some incredible tech and even delivers x86 servers at highly competitive prices. Yet because Sun's marketing sucks worse than a black hole, generating new customers is a huge issue for them. As far as I can tell, the vast majority of their business is still through customer reps with little attention paid to the market as a whole.

I personally think that Sun could be successful in quite a few areas of the market. Not the least of which is as a serious competitor to Dell's server business. But first, Sun has to figure out how to communicate with the average customer. Giving their software complex prefixes like "Sun Java System", branding everything with "SPARC" even when it isn't SPARC, changing their market ticker to JAVA, and giving up on new markets before they've made inroads aren't exactly painting Sun in a positive light.

Dear Mr. Schwartz: Please hire a real marketing department and see to it that your product line makes sense to the average consumer. KTHXBYE.

Re:Further evidence... (4, Interesting)

eln (21727) | more than 5 years ago | (#26562277)

I agree, but it's not only marketing. Sun has apparently decided to go into the support and commodity hardware market. In commodity hardware, margins are razor thin, so they really have to distinguish themselves. In my recent experiences with Sun x86 systems, quality has been something of a problem. They say it was a temporary issue with one of their plants in Mexico, but when we ordered a ton of x86 boxes about a year ago, it took much longer than it should have to get to us, and the failure rate was unusually high.

Also, when they released the x4100 Mk2, they claimed it was virtually identical to the Mk1, and there would be no issues. However, it turns out they made some fairly significant changes such as changing the vendor of the on-board network cards to one that the OS image we were using at the time had no support for. It also had a different type of PCI port (PCIe versus PCIx, IIRC), which meant all of the extra NICs we had lying around were suddenly useless. Had they told us of these changes, it would have been no problem. Instead, they just told us our order was being changed to the "virtually identical" Mk2, and we had to scramble when we got them. Not great customer support there. After that incident, we actually stopped using Sun for x86 hardware entirely.

Going back to marketing though, they are really pushing this "Open Systems" thing, which is nice and all, but their salespeople don;t know how to sell it. At a recent presentation, the Sun sales guy was talking up Open Systems, and a member of the audience asked, "If everything is open and interchangeable, why shouldn't I just use your free open source software and go buy a cheaper system from Dell? What is the advantage of your box, if it's commodity like the rest? Why should I buy from you?", and the sales guy had no answer for him! He actually stumbled over his words for about 30 seconds, at one point actually saying there was "no reason" before one of his colleagues finally pipes up with something about "end to end support".

Maybe they need to be touting the end to end support first, and the open systems stuff second. Suits tend to like open source because it's a lot cheaper, not because they're big on the philosophy, so stop pushing the "open source" thing so hard when the open source bit is the part you're giving away for free. Market the entire platform as an end-to-end solution, and throw in the open source part as an aside. Sun's marketing team doesn't seem to get that.

Anyway, that was a bit long-winded, but the point is that Open Source isn't going to save Sun by itself. They have more problems, and I see them surviving as a much smaller and less interesting company than they are today if they stick to the path they're currently on.

End-to-End solutions are Sun's real selling points (2, Insightful)

thtrgremlin (1158085) | more than 5 years ago | (#26562789)

No product can make money if you can't sell it. Doesn't matter how good it is. Call it marketing hype, but how is anyone going to know that your systems are superior if you don't say as much. That seems like such a screw up that the sales rep couldn't explain the whole "end-to-end" solution issue. Personally, I don't think that wasn't a gotcha question at all, that should have been prompted as a great opportunity for the rep to explain what kind of business Sun is really in.

But if Sun doesn't even know what kind of business they are in... one really needs to wonder how much longer they are going to last. I am sure any sales rep at Red Hat would drool at the opportunity to answer a question like that from a real customer in front of a crowd that would have influence over possible huge sales. Hell, even I live to hopefully answer questions like that! Shortly after Vista came out, I was at a Fry's Electronics, and a sales associate was telling this guy looking to buy a bunch of machines that Vista was the hot new thing and that he needed it for his business because everyone was going to be using it in the next 6 months when XP died. I bust up laughing and warned the customer that was likely the worst advice you could get to drive a business, let alone a speculation I agreed with. From what he talked about needing for his business, I did my little Linux/FlOSS speech, but really recommended Red Hat, and explained a bit about their free product with full end-to-end support, and that they could likely best advice him on what would work best for HIS business needs. I am fairly sure I sold the guy on it. The Fry's sales rep was upset and just kept saying I was wrong and that everyone was going to use Vista. I humored him and asked "So what's Vista got that XP doesn't?". He started explaining the higher system requirements (as if it was a selling point), and went on to show me Aero. I gave a long *sigh*, and walked away. I should hang out there more often :)

Re:End-to-End solutions are Sun's real selling poi (0)

Anonymous Coward | more than 5 years ago | (#26563981)

He started explaining the higher system requirements (as if it was a selling point), and went on to show me Aero. I gave a long *sigh*, and walked away. I should hang out there more often :)

Get a life, loser!

Re:Further evidence... (2)

Samschnooks (1415697) | more than 5 years ago | (#26562307)

That's what happens when you manage from an engineering mind set. When SUN started, they were leaders in technology: no one was doing what they were doing and there was a need for that technology that they developed. The market only rewards better engineering when it satisfies their needs. Now, computing power is a commodity and generic software is a commodity.

The market that is left in SAP type of stuff. Software that allows a company to become more competitive. There's more new markets, but I'm too old to know where it is - and I'm ten years younger than the senior management of SUN. The next software big thing is going to come from an 18 year old in his parent's basement and I don't think it's going to be PC based. It's going to be some device (I don't know, a toaster that takes a whole loaf of bread, slices it, toasts the bread, and cooks the bacon) and it'll become "necessary".

Either SUN gets some young blood or they will turn into - I don't want to say it. They have MANY patents and they invented MANY of the things that run the internet (thanks Joy!) and I'm sure there are folks violating those patents. Just saying....

Re:Further evidence... (1)

thtrgremlin (1158085) | more than 5 years ago | (#26562931)

IBM was another player that tried to take advantage of their strong market dominance to control things. It didn't work out for them in the long run, and they had to adapt to an F/OSS world. This happened to sun just a bit later. Is the unmentionable company another software giant with strong market control that you predict has forgotten how they got to where they are today such that soon you will see them going on to the back burner? Big nameless company is nearing about the same amount of time IBM and Sun had before their ship set sail into the past as a market leader, and they are following many of the same trends each followed.

Oracle, right? (j/k)

Re:Further evidence... (2, Insightful)

asv108 (141455) | more than 5 years ago | (#26562595)

Its not just marketing, it being able to purchase products online at the actual price. You can't just login to sun.com and buy servers via a online portal with a corporate discount like Dell or HP. You have to talk with a rep to get the actual real price, not the phony MSRP price.

Re:Further evidence... (2, Insightful)

C_Kode (102755) | more than 5 years ago | (#26562993)

With the current way Sun does business hardware wise it cannot compete with Dell directly. Sun sells higher end hardware and Dell sells lower end servers very cheap. You can buy two Dell servers loaded with the same memory and SCSI drives instead of SATA drives, with 3 years support for what a single Sun server would cost you. I have several JBoss clusters and I just throw Dell PE1950s at them. If one crators, the rest of the cluster just hums along. Sun competes with HP, IBM, and the like. They DO NOT compete with Dell. Although, Dell can definitely compete (and steal market share) from Sun. Especially now with the current state of economy and everyone being so cost conscious.

Re:Further evidence... (2, Insightful)

AKAImBatman (238306) | more than 5 years ago | (#26563149)

For quite some time, Sun was undercutting Dell on AMD64 servers. I have been told that you can still get the servers cheaper if you have a rep. The problem is that Sun gave up on the rest of the market after only a short push. (You might remember the "rhymes with hell" ads here on Slashdot.) And dealing with a central sales rep is a pain and a half when any segment of a large company can order a server through Dell.com.

So I'm not surprised that you think Sun doesn't compete with Dell. As I said, they have a massive failure in their marketing department and no real commitment to expanding their business.

Riiiight . . . (1, Flamebait)

Ammin (1012579) | more than 5 years ago | (#26561731)

A company whose sliding revenues continued to based primarily on overpriced Solaris workstations and servers that no one is buying is somehow going to magically "recover" by giving away Java or MySQL?

There isn't enough time in eternity for that to happen. What will happen is that Sun will declare bankruptcy in the next year, liquidate everything related to Sparcs/Solaris/etc. and its MySQL and Java "businesses" spun off into something that will take years to reach Red Hat size.

Re:Riiiight . . . (4, Insightful)

tnk1 (899206) | more than 5 years ago | (#26561869)

Thoroughly unlikely. Sun would be bought out long before they needed to declare bankruptcy. Their star may not be in ascension, but the company has real value.

Re:Riiiight . . . (1)

Ammin (1012579) | more than 5 years ago | (#26562047)

I find that somewhat unlikely. I have family members who work at Sun (various layoffs are being announced today) and I get no sense that Sun has anything of value. Also, there's just no financing (unless you're a bank using taxpayer bailout money) for acquisitions of that type.

Re:Riiiight . . . (1)

BBandCMKRNL (1061768) | more than 5 years ago | (#26562933)

Thoroughly unlikely. Sun would be bought out long before they needed to declare bankruptcy. Their star may not be in ascension, but the company has real value.

Your post and the parent post sound an awful lot like DEC in its last few years.

I've forgotten who he was, but there was a guy whose posts in the DIGITAL notes conference were titled, "And the death spiral continues". Unfortunately, he was correct. I believe you are correct in the outcome for SUN.

Re:Riiiight . . . (1)

UnknowingFool (672806) | more than 5 years ago | (#26562223)

Sun is failing because they didn't adjust their business model. Linux is cheaper because its run lots of hardware including commodity hardware. While Sun sells both hardware and software, they predominantly make money on hardware. Personally I would argue that Sun hardware is better than commodity, however given the cost, commodity hardware is good enough in most situations. IBM and Apple are both Unix vendors that will likely to survive because they specialized. IBM does big iron which commodity hardware right now isn't good enough to get the high reliability and availability that is required. Apple survived because they sell to consumers with some sales to enterprises.

Re:Riiiight . . . (1)

Samschnooks (1415697) | more than 5 years ago | (#26562539)

OK. Explain to us why SUN's hardware is better than what is out there? I mean, explain it in terms that a business guy would understand; meaning, not saying something like, (I'm making this up) "the bus speed is faster" or "the memory access is faster" etc...

Why would someone go out and spend the extra money for a SUN workstation? I don't see it.

Re:Riiiight . . . (1)

crowne (1375197) | more than 5 years ago | (#26563369)

I haven't had much joy from sun hardware. We had a project that needed to process large amounts of data.

A fairly expensive sun server with CoolThreads technology was procured. The application was deployed and the processing time was so bad that we started blaming it on the "CrawlThreads".

We redeployed the app onto a commodity HP server with CEntOS installed and the processing time dropped from 8 hours to 2 hours.

I dont actually think that CoolThreads was a bad technology, unfortunately the application was very limited to what it could do in terms of parallel processing. Most of the processing was linear, so the majority of the massive number of threads that were available from CoolThreads were sitting idle, and the trade-off for the great number of threads available was less processing power for each individual thread.

Re:Riiiight . . . (0)

Anonymous Coward | more than 5 years ago | (#26563783)

Sun is failing because they didn't adjust their business model. Linux is cheaper because its run lots of hardware including commodity hardware.

'Sfunny. I must be delusional. I'm sure I'm running Solaris on my cheap little Acer right now. Lemme see, yes... yes, I am. It's how I'm replying to this post.

This is the year! (0)

Anonymous Coward | more than 5 years ago | (#26561753)

Of the Linux deskto

Sun deserves to die (-1, Flamebait)

Anonymous Coward | more than 5 years ago | (#26561797)

it was involved in the barratry involving SCO. It tried to FUD Linux for years. It is unethical and contributes nothing to IT. Oh, and their technology is about 15 years out of date. Java sucks too, ask any system administrator (and when will you programmers learn to consider the resource requirements of your app before you choose a platform? FFS.)

Re:Sun deserves to die (0)

Anonymous Coward | more than 5 years ago | (#26561857)

Wow, you sound like a pro.

Re:Sun deserves to die (0)

Anonymous Coward | more than 5 years ago | (#26562951)

sounds like every system admin i've ever talked to, so i assume you aren't being sarcastic.

what is it about that profession that makes those little script monkeys think they're actually the important people in the mix? reality check, monkeys - you are the technological equivalent of janitors. keep those toilets clean, please, and stop stealing supplies.

Don't give that much credit. (4, Interesting)

jellomizer (103300) | more than 5 years ago | (#26561837)

SUN's market was traditionally on High End equipment. Standard PC hardware has been getting to the Good enough category, and replaceing the need for the high end stuff. Even if the high end stuff today is that much more high end, we are reaching a point where we need less high end equipment.
the 80's almost every major university had its own super computer. 90's they had a mainframe, 2000's they have high end microcomputer based servers.
SUN product line has been between mainframe and microcomputers. Now their new stuff is either to much for what people need to too expensive for what you get.

Linux growth has always been fasted with the Unix Corps who are upgrading to a new network, and it is way cheaper for a Unix corporation to switch to Linux (or Old Unix to New Unix) then to Windows. (Windows to Linux costs a lot more).

Good enough? (1, Insightful)

Samschnooks (1415697) | more than 5 years ago | (#26562421)

Standard PC hardware has been getting to the Good enough category, and replaceing the need for the high end stuff.

It is as good as SUN and cheaper. Otherwise, folks would still be buying SUN's products. Say what you will about MS, but they have a good product and the most applications that run on it. Consumers are not stupid as many folks here believe; especially, business consumers.

No, I don't work for Microsoft. I'm just expressing my opinion.

Re:Good enough? (1)

jellomizer (103300) | more than 5 years ago | (#26563009)

I would stand by good enough. SUN hardware does have some really nice high end features that standard PC hardware doesn't have and massive scalability too. However these are features that people don't need anymore or the cost of implementing these features are much more expensive then dealing with a PC workaround.

Re:Good enough? (2, Insightful)

rbanffy (584143) | more than 5 years ago | (#26563159)

It really depends on your workloads. I see SPARC boxes running rings around x86 boxes the same price range on highly parallel workloads.

Re:Good enough? (0)

Anonymous Coward | more than 5 years ago | (#26563525)

Say what you will about MS, but they have a good product and the most applications that run on it.

Which would be great... if Microsoft made hardware.

Re:Don't give that much credit. (0)

Anonymous Coward | more than 5 years ago | (#26562499)

This is slightly off your point, but interestingly, "big iron" might be in for a bit of a comeback . I agree with you that the beige box looked poised to win out in the late 90s, but its rise was predicated on cheap energy to an extent most of us didn't appreciate back then. When energy prices double or triple over what they were last decade, suddenly consolidating all those generic, standalone x86 PCs into virtual instances living inside one, massive, efficient mainframe makes a lot more sense. Sun knows this and markets on it extensively [sun.com] . And companies who have opted for the thousands-of-PCs approach in their datacenter are doing everything [slashdot.org] they [google.com] can [greenbiz.com] to keep the price of electricity down--without it they're screwed.

Re:Don't give that much credit. (1, Insightful)

Anonymous Coward | more than 5 years ago | (#26562617)

Discolsure - I work for a Sun Reseller.

"Now their new stuff is either to much for what people need to too expensive for what you get."

  I have to disagree with this statement. Sure, Sun is not in the business of selling personal computers. And an individual is not going to be buying Sun equipment. But businesses sure are. Sun Servers these days can be SPARC, AMD, or Intel. They can run whatever OS you want.

We have had great success in replacing Dell in data centers with Sun. All you need to to is show the customer processing power, rack unit, cooling requirements, and energy usage vs. Dell.

Yeah, 1 Sun server costs more than 1 Dell server. But you need 10 Dell servers to do the job of one Sun server. The Dells will use 50x power and cooling, require 10x rack space, etc for an equivalent amount of work.

Virtualization is the key in todays datacenter, and Sun has the servers to host it.

All that said, the Sun PR machine is utter crap. They do a terrible job of getting the word out on this stuff.

Re:Don't give that much credit. (1)

captrb (1298149) | more than 5 years ago | (#26562667)

I don't think this is true any longer, at least not for their entire line. I just bought an Intel server from them that gave amazing bang for the buck. I'm very pleased with it and plan on buying a few more.

8 cpu's, 32gb memory, and LOM in 1U for $8k?

That's a pretty cheap server.

I wish they hadn't decided to shun the fastest growing unix community in the world by reinventing the wheel with OpenSolaris. They should have followed Nexenta's lead and buddied up with Debian & Ubuntu. As it stands, I'm destined to be in "hand rolled hell" in order to continue using SUNW Solaris.

Re:Don't give that much credit. (1)

thtrgremlin (1158085) | more than 5 years ago | (#26563359)

we are reaching a point where we need less high end equipment

I think it is more like people / businesses no longer need so much specialized equipment as your average cheap PC can do almost anything, and what was once very specialized hardware is very efficient software that runs on consumer grade hardware. Wasn't sure if that is what you meant, but that is the impression I have gotten also.

It might be interesting... (2, Interesting)

zogger (617870) | more than 5 years ago | (#26561845)

..if Redhat sold netbooks, laptops and desktops and servers pre loaded with linux that "just worked", all of it, no hardware gotchas anyplace.

Re:It might be interesting... (1)

thtrgremlin (1158085) | more than 5 years ago | (#26563553)

Dell has really revolutionized direct PC sales. They are very aggressive and good at making up extremely slim margins with high volume and strong attention to supply line management. While it may all look like "computers", Dell and Red Hat are not even remotely in the same business after that. There is a good reason why IBM got out of the game. As it is, Canonical has a deal with Dell for Ubuntu (albeit one that lacks selection for my taste), and Red Hat has a deal with IBM for their high end machines if I remember correctly. Each working to do what they do best, and pairing themselves up with the appropriate company that can help promote them.

Market cap is speculative bullshit (2, Informative)

blind biker (1066130) | more than 5 years ago | (#26562233)

Anyone with a brain (ok, it takes perhaps a bit more than just half) knows that the stock market, as an entity, is an idiot.

There, I said it. I expect to be modded down by Linux fanboys (which is NOT the same as intelligent Linux users, mind you. I like to think I belong to the latter).

Capitalizatio? (0)

Anonymous Coward | more than 5 years ago | (#26562243)

Ah, yes, I understand, it must be Latin.

Capitalisatio mercati RubiGaleri majoris capitalisatio mercati Solis est...

Wait wait (1)

xenocide2 (231786) | more than 5 years ago | (#26562323)

Wasn't Sun in trouble a few months ago, where their market cap was less than book value? I.e. the market was sure Sun was going to waste whatever resources they had.

Market capitalizatio? Oh noes! (0)

Anonymous Coward | more than 5 years ago | (#26562407)

Phew, for a second there I was worried that they meant *Market Capitalization*.

Wonderful.... (1)

flajann (658201) | more than 5 years ago | (#26562475)

Now if we can only get Red Hat to support FS other than ext3. That snafu on their parts is causing us all kinds of angst at our shop.

In fact, my biggest grip with RedHat is that they always seem 2-3 revisions behind everyone else. I mean, come on! I wonder exactly what it is they are doing with all that money?

kapardhi (0)

Anonymous Coward | more than 5 years ago | (#26562653)

Yaa, but after open solaris release !
things remain same.
Linux Guys are always Open minded ..
so Solaris or linux once it is open .. Thats it

So, how about GPL OpenSolaris now? (0, Flamebait)

metamatic (202216) | more than 5 years ago | (#26562749)

The market is clearly choosing Linux over OpenSolaris. One way to combat that would be to make OpenSolaris GPL3. It would then attract open source developers, and have the bonus of ZFS support which Linux will continue to lack.

Re:So, how about GPL OpenSolaris now? (1, Interesting)

John Hasler (414242) | more than 5 years ago | (#26563533)

> The market is clearly choosing Linux over OpenSolaris. One way to combat that would be
> to make OpenSolaris GPL3. It would then attract open source developers...

OpenSolaris is already Free Software. I see no reason to believe that such a license change would attract more developers.

Those Who Forget The Past... (0)

Anonymous Coward | more than 5 years ago | (#26562903)

This SGI old-timer wishes Sun the very best, both as through solidarity and because he doesn't like to think of Linux as the kiss-of-death for an ex-UNIX hardware vendor.

SGI proved that great tech and once-profitable business itself is not enough; Open Source can save you, but only if you go all in. Try to exist between Open and Closed and you will get torn to pieces by their gravity.

silly (0)

Anonymous Coward | more than 5 years ago | (#26563209)

yeah, like SGI was about to outpace everybody.

Re:silly (0)

Anonymous Coward | more than 5 years ago | (#26563955)

In 1996, while you were fiddling with VESA drivers for l33t graphics on your 486, my 10 year old SGI IRIS 3130 had 3D accelerated graphics.

I call bullshit - at least in part! (1)

GuyverDH (232921) | more than 5 years ago | (#26563749)

Sun, perhaps unfairly, represents a fading Unix market. Red Hat, for its part, represents the rising Linux market.

According to whom? FUD!!!

What about SCO? (1)

G Morgan (979144) | more than 5 years ago | (#26563939)

When will SCO surpass Sun? Who else has the brilliant plan of charging $699 for something other people are giving away for free. Imagine it, SCO are making that much more for every copy of Linux they shift.

Surely this unique and exciting business plan of charging more than the opposition must eventually pay dividends.

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